Over three quarters of banks are experimenting with blockchain technology but still believe that wide scale implementation is many years away, according to SIX Securities Services.
Research carried out by SIX revealed that 76% of surveyed banks are experimenting with the technology but suggest that regulatory uncertainty and a lack of internal expertise is acting as a barrier to entry.
Participants also estimated that it would take an average of six years before blockchain is widely implemented despite one in five participants piloting a specific blockchain service.
“A lot of the conversations we are seeing around blockchain are on the technical level, looking at what is feasible with blockchain rather than what is desirable from a business standpoint,” said Thomas Zeeb, CEO of SIX Securities Services.
“Blockchain has the potential to make a number of business models and intermediaries obsolete, which isn’t necessarily a bad thing but until the industry has clear indications on sustainable use cases it will be difficult to convince top managers to bring their trusted systems into these new domains.”
Other results from the research show that 38% of respondents believe that blockchain will have the biggest impact on settlement with 34% of participants considering that clearing will be most impacted.
Only 20% of respondents agreed that the technology will make the clearing process completely redundant.
Blockchain technology has been hailed by custodians as being the future of the industry with potential to streamline processes such as settlement, clearing and corporate actions.
Earlier this month the World Trade Board blockchain working group revealed they were aiming to ‘define’ the technology in its applications in the trading world.
Banks still prioritising blockchain despite doubts
A majority of banks are actively engaging with blockchain technology despite uncertainty over its wider implementation.