This story was delivered to BI Intelligence " Fintech Briefing " subscribers. To learn more and subscribe, please click here . Oliver Bussman, ex-CIO of UBS and vocal advocate of blockchain, believes it will be some time before we see widespread adoption of the technology by banks, according to an article published by the Financial Times . Here are the key points from his argument: Successful live implementations involve only a handful of banks. Bushman points to the example of Ripple, which has a market-ready, blockchain-based platform that banks can use to conduct cross-border transactions. It enables transfers to be processed in hours, rather than the days legacy systems take — but so far only 12 of the top 50 global banks have signed up to join Ripple’s network. As Bussman points out, that’s a long way off the 8000+ financial institutions that use SWIFT’s electronic messaging system to carry out transactions. Blockchain-related regulation is still in its infancy. Many regulators, including the UK’s FCA and Singapore’s MAS, have set up sandboxes that enable banks to experiment with blockchain-based products without fear that they might break the rules. But these are test environments, and the regulation that would likely be required before banks could handle customer data or money using blockchain-based systems still seems a long way off, according to Bussman. This is because of the rigorous testing needed to inform such regulation. The battle for security isn’t yet won. Banks will want to know their blockchain-based platforms are secure before they even consider rolling them out to customers. This will take time, as in-depth testing will have to take place. Banks will then have to get approval from involved departments including legal, risk and compliance, and bank management, likely causing further delays, according to Bussman. And being able […]
