More and more banks are trying to explore the potential applications of blockchain technology in their operations. Some say that this could reduce clearing times and costs for trades while also providing a more secure approach to record-keeping.
However, most banks are traditional in their approach and have a lot of homework to do when it comes to updating their systems, let alone understanding the complex blockchain technology. For Deutsche Bank Research analyst Thomas Dapp, banks need to first solve their legacy problems before adapting to new systems.
Blockchain and Legacy Problems
“I think that what traditional banks should do, and I emphasize this, they should experiment with all these new kinds of technology without prejudice,” Dapp points out. “But on the other side I see huge legacy problems because traditional banks have such old systems and procedures in the back end of their infrastructure. Traditional banks cannot offer an API to implement new technologies very fast.
“They have to solve their legacy problem, and we are talking here about a process that could last maybe five years, ten years, I don’t know. It’s a huge hindrance at