Many business leaders, however, are still in the dark about blockchain, which some say has the potential to upend how companies do business—and not just in the financial services sector.
Blockchain’s mysteriousness for the uninitiated could have something to do with its current lack of widespread popularity. It’s also based on a concept that’s not always easy to picture and explain.
Initially associated with cryptocurrencies such as bitcoin, a block chain is a database that contains an ever-growing list of transaction records. Rather than existing in a single location, the database is shared among multiple computers, allowing anybody to do business with each other without having to go through a central intermediary, such as a corporation.
Today, an individual might tap their debit or credit card at a cash register to buy a coffee, but it could still takes days for the transaction to settle and the money to be deducted from their account. Blockchain eliminates the need for a settlement, saving companies time and money. By design, blockchains are also inherently resistant to modification, providing a secure and trustworthy record of transaction.
“Blockchain technology has the potential to re-invent the way we use money and contribute to a finance system that’s high-quality, low-cost, secure, fair and transparent,” Jenkins said this week after announcing he was joining the board of fast-growing startup Blockchain. Jenkins, who was Barclays CEO for three years through to 2015, has described blockchain as an “Uber moment” for banking.
JP Morgan’s Dimon, meanwhile, while skeptical of bitcoin’s potential, is more enthusiastic about blockchain. “Yes, it’s real. It can probably reduce the cost of doing business,” he said early this year. “If it proves to be cheap and secure, it would be adopted for a whole bunch of stuff.”
Indeed, plenty of other industries could be affected—even disruptors such as Uber. “You don’t need a $65 billion corporation to do what Uber does,” Tapscott CEO Don Tapscott recently told Fortune. “All the transactions are resolved not through a big corporation but through a consensus community that’s establishing every ten minutes a block of what has occurred.”
Blockchain technology deployment is actually occurring more aggressively in several industries other than in financial services, according to a new survey by Deloitte. After speaking to 308 senior executives at U.S.companies, the professional services firm found the technology, media, telecoms, consumer products and manufacturing sectors were in the lead. About 30% of respondents in those industries said their company had already brought blockchain into production, compared to 12% of financial services company executives.
However, overall, 39% of senior executives said they had little or no knowledge about blockchain technology.
“Most financial services companies have been involved in blockchain via their labs, investments, and pilots for a while now,” Deloitte principal Eric Piscini said. “Other industries are now starting to realize the potential for disruption, as well as the new opportunities that blockchain creates.”