[ M A R K E T
tors on request. It is expected that more fund administration
providers are likely to follow suit in due course.
Is blockchain here to stay?
As a premise, blockchain still has a lot to offer although it is be-
ing inhibited by a number of external challenges, namely a lack
of interoperability and standardisation, the dominance of legacy
systems and an absence of regulatory clarity. Some experts have
even suggested it would be prudent to postpone blockchain initi-
atives until more is understood about the implications of quan-
tum computing, a mind-bending technology being developed
in physics laboratories and academia which could theoretically
decrypt DLT’s advanced cryptography.
Blockchain is not just vulnerable to hypothetical disruptors
like quantum computing. Providers also point out a number of
existing – and probably cheaper - technologies can be used to
solve long-standing industry problems. KYC and AML are excel-
lent examples. “People initially believed that KYC was a perfect
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test case for blockchain. However, experts
eventually concluded KYC inefficiencies
could be resolved simply by building a
centralised data warehouse, rather than
creating a blockchain infrastructure,”
comments Ruault.
Blockchain euphoria has clearly fizzled
out following a series of POC failures and
FinTech company closures. That said,
there was a chronic oversupply of DLT
start-ups meaning market consolidation
was somewhat inevitable. Having learned
from their mistakes, financial institutions
are also becoming more selective about us-
ing blockchain, conscious the technology is
not as universally applicable as they once
assumed. This would suggest that rather
than blockchain running out of steam, the
industry’s attitudes to it are maturing.
Which of the following best describes how your organisation
currently views the relevance of blockchain to your organisation?
Unsure/no conclusion
Will not be relevant 4%
Relevant, but not a
strategic priority
4%
4%
43%
21%
Important, but not in the
top 5 strategic priorities
Critical – in our top 5
strategic priorities
29%
Source: Deloitte
Spring 2019
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