Banks continue to invest time and money in Blockchain projects and trust still remains so important
Germany’s Deutsche Bank is rumored to have disbanded its team, in London UK, which was itself researching how Blockchain could help the bank and then, in time, offer its clients low cost and more efficient products and services. However, it has not stopped Deutsche Bank from joining the JPMorgan project, which uses Blockchain technology — this being recently reported by the FT. Deutsche bank will join 320 banks and is by far the largest to sign up to the interbank Information Network (IIN). The INN aims to cut the cost and reduce the time it takes to carry out cross-border payments, which is attractive for Deutsche bank as it processes more euro-denominated payments than any bank worldwide.
According to JP Morgan Payments Head, the IIN provides solutions that would previously have taken up to “16 days” to resolve just “hours”.Ole Matthiessen, at Deutsche’s cash management division, said “The IIN would allow his bank to offer better services to their clients, and would lower the cost of processing difficult payments. Our competitors are not just the other banks, it’s also new players in the market, we need to become efficient enough to provide seamless real-time and digital process”.
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This is yet more evidence of how institutions are adopting Blockchain technology as they realize the efficiency and cost-saving that can be generated in a highly secure environment, despite the naysayers who are always present when changes are prevalent!
One of key factors that institutions and private clients constantly question is ‘trust’. For Blockchain technology and, indeed, Digital currencies, users are going to have to trust before they engage or, at least, trust those organizations which are involved. The basic concept of moving from a system where there was a third party that one could go to in the event of a problem to a system that is decentralized, one has to, in effect, trust the digital code. It is something that users and regulators will need to frankly ‘get their heads around’. This very topic was recently discussed at an American Chamber of Commerce meeting by the Singapore Minister for Communications and Information, as Singapore, according to The Strait Times, is becoming “a Smart Nation and Asian digital capital”. Banks are grappling with the challenge of how to update their legacy systems by exploring how technologies like Blockchain can help, which is why the Fin Tech and Reg tech-sectors are so active. However, trust remains a vital part of any innovation, especially in a highly regulated sector such as financial services.