The banking industry is not being slow to adopt blockchain, but rather it is being thorough in its approach. Major banks are all working on developing blockchain technology for various aspects of their businesses, but combining the necessary regulations of the banking industry with an emerging technology means it will be a longer process than many would like.
Designing new systems for trading and payments requires a long road of pilot programs, cybersecurity checks and data-privacy assurances. It also involves a nearly constant race to keep up with a rapidly evolving field.
In other words, getting the blockchain into production will not involve flipping a switch. Instead, developing systems that will protect client funds and stand the test of time involves a constant state of development and production in innovation labs across the industry.
“Given that the technology is nascent, it will have to rely for the foreseeable future on a legacy infrastructure,” Bose said.
In the months and years ahead, banks will face challenges as they get closer to putting blockchain technology to use on a large, marketwide scale.
Baldet warned that bankers should not expect a flashy rollout any time soon.
“We also have offices of technology risk that we have to report to,” she said, noting that the company has service provider agreements to adhere to, not to mention client guarantees. “You have to meet these preexisting benchmarks, as opposed to ‘Hey let’s try it — and if it doesn’t work, sorry, we’ll try again.’”
That legacy companies are making such a concerted effort to adopt blockchain technology says a lot about the growing ubiquity of the technology. Naturally, it will take longer for them to get to the point where many consumers will expect them to be, but with large companies propelling the evolution of the technology, blockchain will undoubtedly grow and improve rapidly in the coming years.
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