First came banks, now IT companies, then comes widespread blockchain adoption
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A few months ago, the World Economic Forum claimed in a report that blockchain can become the future of FinTech. After a plethora of banks decided to give blockchain a chance, it’s IT companies’ turn to become blockchain believers.
Japanese IT company Fujitsu is experimenting with blockchain. After pinpointing one of the biggest downsides of this technology, namely the fact that “in financial trading applications, there are operational issues related to safely executing trades, such as key management,” as the official announcement points out, they decided to eliminate the problems and transform blockchain into a safe(r) choice for organizations.
Fujitsu Laboratories Ltd. and Fujitsu Laboratories of America, Inc. have developed two blockchain-based technologies to “safely and securely handle confidential data between multiple organizations:”
A transaction restriction technology based on pre-established policies to restrict trading, such as by restricting users, and a document encryption technology, which allows only relevant parties who hold multiple distributed keys to securely access the information recorded in the blockchain.
These two technologies are meant to prevent both the misuse and abuse of keys (thus making it safer to use blockchain) and to develop a workflow “where documents are acknowledged by collective decision-making or between specified organizations, or where they can be restored when keys are lost.”
No growing pains for Blockchain
The financial industry is experimenting heavily with blockchain; according to Spiros Margaris, the founder of Margaris Advisory, “once we overcome the challenges that accompany blockchain — which many banks and startups work hard on to do — it will change things for the better in our lives.”
Earlier this year, Jerry Cuomo, vice president of blockchain technology at IBM, told the President of the U.S. Commission on Enhancing National Cyber Security that blockchain may cause a “tectonic shift” in the way financial systems are secured. Cuomo encouraged government agencies to become early adopters of blockchain applications, but also included the government in this conversation, stating that it has an essential role to play in authorizing the identities of participants in systems that are blockchain-based.
A few months after Cuomo opined that blockchain is likely to change the way financial systems are secured, the World Economic Forum released a report titled The Future of financial infrastructure: An ambitious look at how blockchain can reshape financial services in which it claims that blockchain will play a central role in the global financial system.
Giancarlo Bruno, the head of financial services industries at the World Economic Forum, told The New York Times that the technology behind Bitcoin will become “the beating heart” of the finance industry. The report revealed that blockchain has the potential to “drive simplicity and efficiency by establishing new financial services infrastructure and processes” and is likely to “form the foundation of next generation financial services infrastructure in conjunction with other existing and emerging technologies.”
76 percent of financial organizations are experimenting with blockchain
According to a new research commissioned by SIX Securities Services, more than three quarters of financial organizations are experimenting with blockchain technologies. The study revealed that 32 percent of respondents have created “a proof of concept, while 1 in 5 are piloting a specific product or service. 14 percent of respondents said they have set up a Blockchain-focused innovation lab, while 12 percent have partnered with a blockchain company.”
Despite the encouraging results, the research points out that widespread adoption is at least six years away.