Traditional financial institutions such as banks run on IT systems built decades ago and as a result are inefficient, opaque, and cumbersome. Blockchain can potentially overcome many of these legacy issues.
Blockchain works as a vast, decentralized ledger, recording transactions then marking them down in a global network to guard against corruption. That’s attractive to a banking industry that looks to process transactions more securely without a third-party intermediary, with blockchain tech someday applied to derivatives and used to settle share trading.
The adoption of blockchain across capital markets is now seen as a matter of “when, and not if,” says Shagun Bali, a New York-based research analyst for the TABB Group, a research and consulting firm focused exclusively on capital markets.
A consortium of more than 20 banks is already building a framework to implement the technology. The TABB report predicts blockchain will be tracking syndicate loans by the second quarter of 2016 at latest.
From the report’s executive summary:
Over the next 12 to 24 months, we will see early