Impact Of Block Chain On Financial Industry

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Competitive pressures is one of the biggest accelerators to digital transformation, it is found that people are feeling the effect and more intense competition from companies that have transformed themselves digitally so when you think about the drivers behind the disruption really a lot of it comes down to technology when you think about mobility when you think about cloud services when you think about consumers who have grown up in the digital age this is forcing a change, actually an entire change of business models, technology has been at the core of a number of disruptive trends and financial services and it’s really been the driver around three key themes.

The convergence of other industries into financial services and frankly financial services leveraging data and technology that now exists in other industries the second really is a wholesale sort of interruption or disruption of business models and new entrants entering into the competitive landscape and certainly last could be a much more transformative journey and that could be the leveraging of things like blockchain technology that will completely change the financial services ecosystem and marketplace. when we think about the impacts of the blockchain it’s useful to think of it with reference to trust every transaction fundamentally requires an element of trust whether it’s buying a book online or buying or selling the property the blockchain has the power to do two things I think essentially.

One is to increase the size of many existing markets by reducing the transaction cost and to create many new markets and opportunities around those markets
when you think about the Internet of Things whether it’s washing machines, a lot seeing a user that they’re about to run out of detergent, or an air conditioning unit predicting an email function at its core all of these require some central control and command power well the blockchain can do is create the building blocks that can accelerate this and encourage people to develop these applications in the same way that certain internet protocols increase the size and take up of the Internet some time ago all of these make the financial services industry very ripe from blockchain adoption
so I think the Internet of Things has been an incredible contributor to convergence in the sector, financial services don’t always have the reputation of being tip of the spear in the innovation curve that it really has embraced this digital journey and really has embraced disruptive technology and creative thinking of their business models and in their evolution you know that’s been a huge impact in the wealth and asset management space .

When we think about the rise of Robo advisors and sort of taking things that were sort analytical and human processes and making them algorithmic processes so if we think about what financial technology or FinTech really is its transformational and new business models combined with technology to evolve and to grow and change and disrupt financial services and so I think what you’ve seen is lower barriers to entry so we have new organizations that didn’t necessarily grow up with the legacy complex systems that the sort of incumbent financial institutions have, and so they’re able to see the world and write a world that’s different; helping executives with their digital transformation building away that could be in the form of an acquisition, it could be in the form of a partnership in some sort of JP mergers and acquisitions and alliances and joint ventures. They are absolutely an accelerant to technology, and particularly as they build time cycles they are not competing with by timescales and answer to speed the market. So we’re seeing increasing investment certainly internally but more importantly, we’re seeing joint ventures and alliances in the market places. People try to access new technologies and they’re doing that through corporate venture capital funds, they’re doing that for partnerships, they’re trying to understand how others have technology that can be leveraged into their businesses.

So I would say collaboration models are increasingly thinking about the digital journey in making investments into Financial Sector, they’re also starting to look at their existing businesses how to reshape their portfolio whether it’s business units that need to be invested or business units that actually need to fund them into operational change. All of that is part of this digital journey.