Financial Services Has More Blockchain Projects Than Any Sector, PwC Says
When it comes to blockchain, the financial services sector has more distributed ledger projects than any other industry.
A new survey, released by accounting firm PricewaterhouseCoopers today, found that among all industries, including healthcare and energy, financial services stood out as the one with the most blockchain-based initiatives.
In all, 46% of FI executives polled said that blockchain technology will have a “significant impact” on the industry within the next three to five years.
Already many larger banks, like JPMorgan Chase, HSBC Bank and PNC are piloting blockchain projects in areas like trade finance and cross-border payments.
In today’s PwC report Steve Davies, blockchain leader at PwC, stated:
A well-designed blockchain doesn’t just cut out intermediaries, it reduces costs and increases speed, reach, transparency and traceability for many business processes. The benefits can be compelling, if organizations understand what their end game is in using the technology, and match that to their design.
Understanding that endgame has not been easy for FIs, and even though many banks have revealed numerous blockchain projects, none of them have yet figured out a wide-scale practical application. Even Bank of America, which has more blockchain patents than technology giant IBM with over 50 related patents, according to its CTO Cathy Besant, has yet to showcase even one practical implementation.
On this subject, Davies, in the report, states:
Creating and implementing blockchain to maximize its potential is not an IT project. It’s a transformation of business models, roles, and processes. It needs a clear business case and an ecosystem to support it; with rules, standards and flexibility to deal with regulatory change built in.
Last month, Bank Innovation conducted a survey on this topic and 30% of respondents in banking said their institution is not considering investing in blockchain at the moment, mainly because there are no proven practical applications for the technology. But, still, there are blockchain efforts underway. Bank Innovation‘s survey found that that 22% of respondents are currently working on blockchain pilots or POCs, while 18% said they have at least one blockchain-based initiative up and running.
One of the reasons for the wariness around blockchain adoption, according to PwC’s survey today, is regulatory uncertainty around the technology. The survey found that executives across various industries, including financial services, listed this as their top concern. Among the 600 executives interviewed for the report, 48% said that regulatory uncertainty was the main roadblock for blockchain implementation. Other reasons included lack of trust, inability to scale and intellectual property concerns.
But despite these concerns, the future looks bring for blockchain, at least according to PwC report, which found that 84% of executives across all industries currently have blockchain initiatives underway and 25% already run a live blockchain implementation or pilot.
When it comes to the leading blockchain market, U.S. is number one, with China next, followed by Australia and then Japan. The report predicts that by 2030, China will overtake the U.S. as the leading market for blockchain development.
