Marieke Saeij, CTO, Onguard
Blockchain, the name itself oozes robust, professional connotations. However, nothing about this technology has yet been truly defined. Finance professionals are either intrigued by its potential or somewhat hesitant to jump on board over fears that it poses more of a threat than a solution.
With the general lack of knowledge on the subject, it seems only few have an insight into the future potential of this technology and how exactly it can be fully utilised. Similar to the internet back in the 1970’s there were a group of people regarded as “in the know” who realised that the internet had great potential and was going to be huge in the future, they just didn’t know how. For instance, the original founders were unlikely to have thought that a little over three decades in the future that we would be able to use this internet in our daily lives, let alone for ordinary activities like ordering the weekly grocery shop.
It’s a huge testament to the industry that even in these early stages that few are ignoring Blockchain. Our own research has shown that 87% of CFO’s are looking into Blockchain however, on the other hand, 36% have admitted that they do not understand enough about it to act just yet. For the larger financial institutions of today, Blockchain is often described as more of a challenge than a potential opportunity. This is purely buoyed by the fear that the arrival of this new technology will render banks obsolete in the facilitation of secure document transfers. Instead, they will be left looking for new revenue streams to offset this loss of income.
In spite of this, there is evidence that some of the larger banks are collaborating on Blockchain applications, this is because of how closely tied Blockchain is to various crypto currencies. On the whole though, the development of Blockchain is very much a watch and wait to see what happens. Just like the CFOs in our survey and these financial institutions, here at OnGuard we are rolling out our own investigation, monitoring developments and watching to see how Blockchain can help businesses in the field of credit management.
It may seem like a waste of time, especially when currently the whole issue seems too ephemeral and uncertain however, we are certain that Blockchain will be a very important development, we have been following it in relation to Bitcoin, smart contracts and predictive analysis.We are also investigating in terms of efficiency benefits, such as fewer errors and reduced administration costs. The potential for removing the transactional element of a deal in favour of a simple exchange across distributed general ledgers has great promise.
We also believe that Blockchain will be extremely interesting in the order-to-cash market. Yet we first need to ascertain, whether it is secure. Do we understand the legislation and laws around it? These are crucial elements to tackle before we can recommend this solution to our list of global clients.We have a vibrant group of developers and architects looking into what is happening and feeding it back into the organisation to enhance our own knowledge.
The consensus is that there are still several known obstacles to overcome, and possibly more unknown issues, before the Blockchain vision becomes a reality. Service and solution providers will need to play their part in the future of this disruptive technology with special attention when developing expertise, taking the time to explain the technology in detail and in helping to reassure customers about issues around security or regulation, for example.
It’s not just a case of nobody quite knowing how Blockchain will impact the market. It’s also an extremely complex technology, with many definitions floating around the industry. It’s no wonder that 62% of businesses we polled currently have open vacancies for Blockchain experts.
Our advice then? Definitely speak to the experts, those that have been observing and researching Blockchain before making any changes to your current infrastructure. Blockchain will happen and it will bring benefits, but those businesses that are properly prepared and willing to make changes will reap most of the rewards.