Survey: Blockchain Technology Utilized For Post-Trade Ops Within 5 Years

Feb 13 2017 | 6:47pm ET

Nearly half the membership of financial blockchain advocacy organization The Post Trade Distributed Ledger Group believes the new technology will underpin the financial post-trade environment within three to five years, according to a new survey.
 
The survey took place in October and November of last year and polled senior executives within member organizations responsible for developing blockchain strategies. 
 
Other highlights of the survey:
 
  • While 48% of respondents believe blockchain will become adopted in the financial post-trade area within three to five years, 29% expect this to happen within the next one to two years and 21% forecast it will take in excess of five years.
  • Half see it as an opportunity, while 10.5% view it as a threat.
  • Respondents cite the top three benefits of blockchain in the post trade area as operational cost savings (81%), reduced settlement cycles (67%) and transparency (43%).
  • 20% of respondents said that the strategic importance of blockchain was “very high” in their own organization, 34% said it was “high,” and 7% said it was “low”.
  • 78% said industry adoption remained the biggest obstacle to implementing blockchain in a wider post trade industry context. 56% cited regulation, 51% said concerns around confidentiality and 49% said a lack of standardization.
  • The survey of PTDL’s global membership found that the top three benefits of distributed ledger technology will be operational cost savings (cited by 81%), increased efficiency/ reduced settlement cycles (67%), and transparency (43%).
  • In a reflection of the significance of the new technology, a fifth (20%) of respondents said that the strategic importance of blockchain within their own organisation was ‘very high’, with an additional 34% saying it was ‘high’; only 7% said it was a ‘low’ priority. 
“The survey shows that blockchain could become mainstream in just a couple of years, with benefits such as better transparency, shorter settlement cycles and cost savings clearly identified by our members,” said Jörn Tobias, managing director at State Street and PTDL Group representative, in a statement. “The big barrier to growth, however, is seen as caution: fears over adoption and hesitation about embracing what remains cutting-edge technology.” 
 
Founded in 2015, PTDL Group members include nearly 40 post-trade financial institutions and market infrastructure companies, including global custodians, clearinghouses, exchanges, regulators, government agencies and central banks. Representatives from CME Group, Euroclear, HSBC, London Stock Exchange Group and State Street make up the group’s organizing committee, while its membership reportedly includes such firms as Unicredit, Société Générale, and UBS.

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