Misys Identifies Real Use Cases Where Blockchain Will Have An Impact

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Misys is cutting through the Blockchain hype. An in-depth look at distributed ledger technology (DLT) use cases across capital markets and corporate banking reveals multiple initiatives across the industry at proof of concept stage, with mass adoption anything up to a decade away.

New research by Misys and Celent – Blockchain Beyond the Buzz – identifies DLT use cases that move beyond bitcoin and cryptocurrency. It unveils how Blockchain technology could benefit the wider financial services industry in the long term and highlights constraints which are preventing speedier progression and adoption.

“With some reports suggesting we’ll be backseat drivers by 2020, the race is on to see which will come first – semi-autonomous vehicles on our roads in numbers or mass adoption of Blockchain,” said Boris Lipiainen, Global Head of Product Management at Misys. “Bitcoin and cryptocurrency was a strong use case for DLT and maximised the hype but moving it into other areas of financial services is extremely complex. We are on the precipice of an exciting technology-led transformation but it is early days and it isn’t yet clear how quickly Blockchain will become mainstream.”

“With unprecedented collaboration between financial institutions and technology providers, DLT has the potential to optimise business processes and eliminate inefficiencies between organisations”, said Patricia Hines, Senior Analyst with Celent’s Banking Group. “But a broad lens is required to maintain a true perspective on who the winners will be as the DLT ecosystem matures.”

Corporate banking use cases include cross border payments, KYC and trade finance, while capital markets sees a focus around improving post trade processing and inefficiencies across various asset classes, notably syndicated lending. With the exception of cross border payments, none have moved beyond simple proof of concept and into pilot stage to date.

“Whilst investment in bitcoin-related ventures seems to have reduced over the past six months, investment in Blockchain technology unrelated to bitcoin has increased sharply,” said Alex Wolff, Head of Product Strategy at Misys. “It is an area that is set to transform the market and deliver significant benefits, including the ability to disintermediate central parties, eliminate reconciliation processes and reduce cost and lead time. However, there are formidable questions yet to be answered before Blockchain will be able to take hold.”

Mass adoption relies on stable network infrastructure and trust that it works. Even once the technology is developed, take-up may be slow whilst DLT earns its credibility outside of bitcoin. Adoption is likely to come from concerted efforts of consortia, rather than dominant single players.

“All parts of the financial services ecosystem are collaborating and competing in distributed ledger technology as we speak. Leading global financial institutions, FinTech start-ups, BigTech and regulators all recognise the transformational potential of this technology,” said John Dwyer, Senior Analyst with Celent’s Securities & Investments practice. “As we transition from proofs of concept to implementation, financial services will be entering an important inflection point.”

With over 2,000 financial services customers worldwide, Misys is keeping a close eye on the evolving DLT landscape and is already looking at how Blockchain could transform the syndicated lending and trade finance space. It forms part of the company’s wider initiative to drive greater collaboration and connectivity in trade and supply chain finance, policy, FinTech and investment, through the World Trade Board. The goal is to help further stimulate financial inclusion and sustainability in global trade.

The Misys portfolio of technology solutions are well placed to support network integration and help banks take advantage of the Blockchain movement when the market develops.

About Richard Kastelein

Founder of industry publication Blockchain News, partner at ICO services collective CryptoAsset Design Group (helped raise over $200m+), director of education company Blockchain Partners (Oracle Partner) and ICO event organiser at leading industry event  CryptoFinancing (first ICO event in Europe) - Richard Kastelein is an award-winning publisher, innovation executive and entrepreneur. He sits on the advisory boards of half a dozen Blockchain startups and has written over 1200 articles on Blockchain technology and startups at Blockchain News and has also published pioneering articles on ICOs in Harvard Business Review and Venturebeat.
 
Kastelein has spoken (keynotes & panels) on Blockchain technology in Amsterdam, Antwerp, Barcelona, Beijing, Brussels, Bucharest, Dubai, Eindhoven, Gdansk, Groningen, the Hague, Helsinki, London, Manchester, Minsk, Nairobi, Nanchang, San Mateo, Shanghai,Tel Aviv and Venice. His network is global and extensive.
 
He is a Canadian (Dutch/Irish/English/Métis) whose writing career has ranged from the Canadian Native Press (Arctic) to the Caribbean & Europe. He's written occasionally for Harvard Business Review, Wired, Venturebeat, The Guardian and Virgin.com and his work and ideas have been translated into Dutch, Greek, Polish, German and French.
 
A journalist by trade, an entrepreneur and adventurer at heart, Kastelein's professional career has ranged from political publishing to TV technology, boatbuilding to judging startups, skippering yachts to marketing and more as he's travelled for nearly 30 years as a Canadian expatriate living around the world.
 
In his 20s, he sailed around the world on small yachts and wrote a series of travel articles called, "The Hitchhiker's Guide to the Seas' travelling by hitching rides on yachts (1989) in major travel and yachting publications. He currently lives in Groningen, Netherlands where he's raising three teenage daughters with his wife and sailing partner, Wieke Beenen.

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