Banks are intensively testing blockchain technology, but still haven’t settled on business cases for it.

That was the news from the panel of bankers discussing banks’ use of the blockchain last week at Consensus 2015, a cryptocurrency conference from CoinDesk.

Blockchains are transaction histories that use multiple parties for verification. “Databases deal in fact; networks deal in opinion,” said Simon Taylor of Barclays, quoting a conversation he had with Ethereum, a blockchain platform. “Blockchains help the two to interrelate.”

The panelists — Simon Taylor of Barclays, Morgan McKenney of Citigroup, Cheryl Gurz of Bank of New York Mellon, and Julio Faura of Santander — largely agreed that the reason for holding back on using blockchain technology is that banks need to make sure they have specific use cases in mind and are not innovating for innovation’s sake. This sounds suspiciously like one of the biggest no-nos that has bedeviled banking: demanding an ROI for every innovation idea. But this time it’s different.

The work with blockchain technology is taking place, but it remain experimental. That’s a far cry from shutting projects down, as was the case during various points of the post-credit crisis fintech innovation revolution. As to how much money is being spent to test blockchains, no one is talking.

Simon Taylor, VP of entrepreneurial partnerships at Barclays, said the inflection point for his bank’s interest in the blockchain was around last September. Faura, Santander’s head of R&D and innovation, gave the exact same date, tracing it even more specifically to the 2014 Sibos in Boston.

“There has been a great deal of experimentation and learning, but, most important, there has been a cultural shift,” Taylor said. “We have 45 [blockchain] experiments at Barclays.”

McKenney, global head of cross-border payments, treasury and trade solutions at Citigroup, noted that her concern with the blockchain was how it would work in the context of Citi’s systems. It is not necessarily a simple matter to port blockchains onto legacy platforms, such as those at Citi, she said. The blockchain software needs to be rigorously tested to ensure it is reliable, secure, and compliant, she said.

Bank of New York Mellon was looking at the blockchain with global payments in mind. Cheryl Gurz, emerging technology segment manager in treasury services at Bank of New York Mellon, said that her bank was initially interested in blockchains in the context of cross-border payments. Later, the bank developed BK Coins to test on internal blockchains. “My question is, What does it do for business strategy?” she said. “Where does it help?”

Santander’s Faura said that distributed-ledger technology interested him because his bank is highly distributed across the globe. First cross-border payments and later “smart contracts” were the primary areas of interest for the bank. Faura said a key to success with innovation projects was to get the business people involved early on, to keep the “visionaries and freaks” on the innovation team anchored in reality.

It is important to remember blockchains can’t do everything, Taylor said. “There’s a meme now, ‘Put a blockchain on it.’ We have to see what this stuff is actually good for, what it can do versus an SQL server, for example.” BONY’s Gurz agreed. “Make sure you solve a specific problem,” she said.

Startups that are focused on particular problems can help.

“We have to have startups, we have to have partnerships,” Taylor said, offering this further advice to emerging companies. “Don’t try to own the whole stack. Focus on one thing and be good at it.”

McKenney concurred, saying no one was settled on any one stack or piece of software. It is likely that everyone will end up using multiple solutions, McKenney said.

Blockchains may solve business problems, but they also can make life easier for regulators, who “feel the same pain” as bankers, Taylor said. “They want this, they want to legitimize it, they don’t want to regulate it out of existence. Dialogue will help. Now is the time to collaborate. When it is commercialized, banks and regulators can go back to duking it out.”

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