New research has found that over half of financial service lenders have introduced the blockchain technology to aid transactions, cut down on costs and improve speed.
According to Robert Half Financial Services, 52 percent have invested in the distributed ledger already, 30 percent are planning on implementing blockchain in the future while 14 percent have indicated that they may consider introducing it, but have nothing in motion at the present moment.
However, as demand for the technology increases, so too do is the demand for the right people to fill the roles. Based on interviews from 100 financial services directors and companies in the U.K., the research discovered that several skills ranked in demand for blockchain. These included trading technology at 51 percent, programming at 47 percent and analytics at 44 percent.
Favourably, the findings found that 85 percent of financial services executives think that the blockchain will have a positive impact on the sector by 2022.
To date, those that have implemented the technology have already seen positive improvements in their services such as empowered users, increased transparency and faster transactions at 54 percent, 54 percent and 42 percent, respectively.
Matt Weston, director at Robert Half Financial Services, said:
“Automation is changing the face of business, and particularly so within the skills and roles within the financial services industry. With financial crime and compliance high on the priority lists for many senior leaders in financial services, attracting skilled specialists to support the implementation is key. To keep up with the rapidly changing skill and role development, companies who adopt a flexible recruitment strategy will be best placed to adapt their resource requirements during this change.”
The Expansion of the Blockchain
Introduced in 2009 when bitcoin entered the market as the decentralised answer to a centralised financial market, the blockchain has quickly gained prominence. Nowadays, it may seem that the blockchain is taking on its own life away from that of bitcoin.
Primarily used within the financial services sector, the distributed ledger is being touted as the solution to reshaping the financial services industry. Aimed at speeding up transactions, reducing costs and aiding transactions, the blockchain has the potential to change how we conduct our day-to-day finances.
However, while it was used first within finance, the technology is also being introduced in other areas too. These include energy, healthcare, fashion, humanitarian aid, real estate and land ownership. Due to its immutability and transparency, it is gaining prominence in a variety of fields.
Because of this, the Minneapolis Federal Reserve Bank President Neel Kashkari has said in the past that the blockchain has more potential of being adopted in the future compared to bitcoin.
Keeping Up with Technology
Interestingly, the advancements that the blockchain is delivering is producing an effect on banks. In a bid to maintain the pace at which the technology is moving, it was reported in March that a consortium of 47 banks had conducted a blockchain pilot that is set to move to production by the end of 2017.
Whereas last November, Swedish bank SEB revealed that it had signed an agreement with Ripple to use their blockchain technology solution as a basis for payment transactions. By doing so, this would permit customers to make real-time transfers between SEB accounts in Stockholm and New York.
The European Parliament released a report earlier this year that highlighted how the blockchain could change the lives of people. It stated that the technology was very suited to many situations such as currency transactions and supply chains. However, while it indicated that there were plenty of opportunities for it to improve services, the report stated that it was unlikely to produce a revolution any time soon.
“Indeed, the governments and industry giants heavily invested in blockchain research and development are not trying to make themselves obsolete, but to enhance their services.”
Additionally, the former chief of Barclays said recently at a conference in Copenhagen that banks needed to embrace fintech if they wanted to remain relevant. Speaking at the Money 20/20 Europe fintech conference Anthony Jenkins said that banks who failed to maintain pace with the advancements of the blockchain and fintech could find themselves becoming obsolete in the future.
“We’re really at the end of the beginning of what we see as a revolution driven by technology with financial services and fintech is really a too narrow categorisation of what’s going on here. As the technologies develop and season, they’re going to create a totally different way of doing banking and financial services.”
According to Jenkins, the distributed ledger could save the banking world between $80-$110 billion a year. However, this isn’t the first time that he has come out and spoken about the impact the technology will produce.
Back in 2015, Jenkins is reported as stating that the fintech sector could produce an ‘Uber-like’ disruption within the financial world. As a consequence, he believes that within 10 years, the number of people employed in the traditional financial services market could decline by 20 percent, with worst case scenarios seeing a reduction of up to 50 percent.
During that time, that could see between 26,000 and 66,000 jobs cut worldwide with as many as 280-700 branches shut in the U.K.
Work Still in Progress
Even though plenty of work has been undertaken to discover the impact that the blockchain has the potential of delivering, the financial services market is still in the early stages of progress.
While the banking sector has plenty of work to undertake, it looks as though the blockchain is set on changing the financial market whether banks are ready for it or not. As a result, the banking world needs to work hard at making the industry an exciting place to work at the forefront of technology if it wants to remain attractive to new employees.
Barclays is one bank that is already taking proactive steps to being more technologically-minded. So much so, that it was reported that the bank had spoken with the U.K.’s Financial Conduct Authority (FCA) to determine how it could bring ‘into play‘ digital currencies such as bitcoin.
The bank understands the importance of remaining at the front of technology and sees keen on exploring how it can make digital currencies safe to stay ahead of the game.
Featured image from Flickr via Mike Cofrancesco.