Faster transactions and faster reconciliation; that’s what blockchain can bring to the banking industry. In a Pricewaterhouse Coopers survey 56% of respondents recognized the importance of blockchain in the financial services, however only 83% were somewhat familiar with the technology.
A blockchain the process behind bitcoin and is basically how money is exchanged, verified, time stamped and recorded from one party to another often using cryptocurrency or secure digital currency.
Currently JP Morgan (US) and UBS (Switzerland) are among the few banks globally who are beginning to experiment with blockchain hoping to speed transactions and save infrastructure costs. The blockchain works as a ledger where the computer verifies and reconciles transactions eliminating the need for a clearinghouse. This has great implications for Wall Street, and other exchanges, because the transaction will be nearly instantaneous, processed in minutes rather than days.
The issue in adaptation is moving from centralization to decentralization and in that aspect question applicability, since it is decentralized, or open source, they have to combine all the players with different functionalities into one code and that code is dependent upon who manages it. Also to be truly impactful all players need to play; this can be a global system.
A handful of major banks have been experimenting with blockchain since 2015 and have found blockchain applications to be effective at reducing cost and were developing applications to continue using blockchain into the future. The CEO of Spanish Banco Santander said “… the technology is a powerful one and I think we will see adoption of that technology much sooner.”