Blockchain is going to have a profound impact not just on financial services, but on the world of business and society as a whole,” says Alex Tapscott, CEO of consultancy Northwest Passage Ventures and co-author of the book Blockchain Revolution.
It’s hard to overemphasize the importance Tapscott places on this rapidly emerging technology: “Blockchain technology represents nothing less than the second generation of the internet,” he says. In the future, “every single company is going to need a blockchain strategy.”
Little wonder then that many firms in the finance and audit sectors have already invested money, time and energy in assessing how it will disrupt their established business models.
Enabling digital trust
To verify transactions and provide trust, banks currently use intermediaries such as settlement and clearing houses to deal with each other. Core to the blockchain concept is that “For the first time in history, two or more parties need not know or trust each other to transact or do business,” Tapscott explains.
This means blockchain provides the opportunity to transfer funds without intermediaries, which could significantly cut costs.
It also enables decentralized groups to work together, from anywhere in the world, in a secure, trusted and verifiable way – with as much security as if they were working side-by-side. This could significantly reduce office and staffing costs by taking the work to the people, rather than the people to the work, cutting overheads.
With digital trust and security comes the potential to automate many more processes. Algorithmic systems can verify and automate payments, foreign exchange trades, tax return filing – almost any task that involves clear results and repetitive tasks.