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Blockchain: The Challenge of Fashioning Hope into Reality

Ç Cognizant BLOCKCHAIN: FASHIONING HOPE INTO REALITY B. IN THE FINANCIAL SERVICES INDUSTRY Our 2017 global survey of 1,520 senior banking and finance executives indicates that the big players are moving beyond pilots to deployment. However, this disruptive technology is far from achieving the scale that will allow it to deliver on its promise. A lack of awareness about what blockchain can achieve remains an implementation hurdle. 44% Nearly half of the BFS firms we surveyed believe blockchain is critical to their organization's future. Almost as many rated it important. 47% A majority believe their organizations need to alter their business models to accommodate blockchain. BANK 31% 48% say blockchain will be added to existing operating models. expect new models to replace existing ones. Consensus is lacking on which type of blockchain ecosystem will eventually emerge. 37% are focusing on private blockchains. 34% are embracing open blockchains. expect hybrid private and consortium blockchains, partially connected to a public blockchain, to emerge. 15% Not surprisingly, scalability was rated as one of the top two roadblocks (69%). Interoperability among various blockchains is close behind (59%) as another major concern. External roadblocks 69% Privacy and security 69% Scalabality and latency 59% Interoperability between various blockchains 58% Creating standards 56% Legal and regulatory issues (Multiple responses allowed.) Opinions vary on how blockchain networks will form and be managed. Who do you think will govern the blockchain network in your industry? 8% A consortium will form and successfully govern the network. 19% 47% A third-party (e.g., a start-up) will emerge to govern the network, and participants will join. 27% An organization within my industry will develop the platform that everyone will join. It will likely be established around a public network like Ethereum or Bitcoin. (Responses do not add to 100% due to rounding.) Financial firms are feeling their way through blockchain uncertainty, encountering obstacles along the way. INTERNAL BARRIERS Understanding blockchain and use cases 53% Communicating blockchain to key decision makers 50% Evaluating cost-benefits of use cases 50% Uncertainty around time needed to start reaping benefits 43% Other technology investments taking priority 43% (Multiple responses allowed.) Integrating blockchain with existing enterprise systems is proving to be tricky. Only 24% rated their organization's ability to integrate blockchain with existing enterprise processes and systems as "high", and another 24% rated it as "medium". WHICH OF THE FOLLOWING BEST DESCRIBES YOUR PLANS FOR INTEGRATING BLOCKCHAIN TECHNOLOGY WITH LEGACY SYSTEMS? We plan to replace some parts of the legacy system to enable blockchain adoption. 41% We have identified core legacy solutions that can be enabled or even replaced by blockchain solutions. 26% We are looking for a hybrid solution that allows us to keep the legacy system as is, but also deploy blockchain. 23% We plan to keep our blockchain solutions isolated from other applications. 8% We have identified new solutions for unaddressed problems or opportunities to apply blockchain solutions. 3% (Percentages do not add to 100% due to rounding.) Attracting and retaining blockchain talent is a challenge across the board. Firms are dealing with it in a variety of ways. HOW IS YOUR ORGANIZATION ADDRESSING THE POTENTIAL SKILLSET GAP CREATED BY BLOCKCHAIN? Innovation labs 62% Training 57% Partnering with blockchain technology companies 53% Investing in startups (incubation) 45% Hiring 41% Targeted acquisitions 40% Offering incentives to retain key employees 31% No plans as of now 4% We are not facing such issues 3% (Multiple responses permitted.) Developing an effective blockchain strategy. Develop a cross-functional team with a business sponsor to drive the strategy. Blockchain projects should be designed to address specific business problems or opportunities, and business stakeholders should be involved from the outset. Set clear goals. Assess whether blockchain is well suited to the business issue being addressed, and clearly specify the objectives that will be achieved. Don't wait until costs and benefits are clear. Learning will be iterative, and costs and benefits may only become defined more clearly as the project progresses. Also, many reasons to move forward are strategic in nature and cannot be quantified at the outset. Stay flexible. Recognize that blockchain is still in the early stages of development; innovation will continue, and the infrastructure will evolve. Explore a variety of platforms, including both permissioned and permissionless. For each use case, choose a platform based on how well it is tailored to the business need, not the one that's receiving the most market attention. Don't expect to retain as-is business processes and technology systems. Examine current processes and systems to determine if they need to be redesigned to fully leverage blockchain сapabilties. Gain experience collaborating with other financial institutions. Work with industry partners on blockchain projects and assess the obstacles in working successfully with external organizations. Focus on blockchain projects with real-world potential. For more on blockchain, read the full white paper, "Financial Services: Building Blockchain One Block at a Time" at http://cogniz.at/financialservicesblockchain, or visit https://www.cognizant.com/blockchain. © Copyright 2017, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is subject to change without notice. AIl other trademarks mentioned herein are the property of their respective owners. Codex 2812

Blockchain: The Challenge of Fashioning Hope into Reality

shared by cognizant on Jul 13
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The financial services industry was among the first to recognize blockchain’s potential and explore its use to cut costs, reduce fraud and manual errors, improve operational efficiency, etc. Our glo...

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