October 13, 2017 | Written by: Ram Komarraju
Categorized: Institute for Business Value
The beauty of blockchain stems from its direct transformative impact on a company’s capability to manage risk. Uncertainty is a powerful factor in a business environment, and the ability to properly balance it is paramount to success.
Leading financial institutions understand that taking calculated gambles is a necessary part of doing business. Modernization, innovation, growth, and even survival, are dependent upon proactive deliberation of risk and a delicate approach to uncertainty. Being a successful bank in 2017 doesn’t mean taking on more unpredictability; it means understanding that staying the same is not an option when a firm is engaged in a constantly evolving industry climate.
Globally, companies have realized that blockchain has the makings for something great, but not all at once. Even internally at financial firms, those engaged with deciding strategic vision and guiding investment have already embarked on the journey to realize the transformative potential of blockchain. However, the business side of these firms focused more on the day-to-day are slower to adapt because the consistent uptime of their work and the certainty of processes is imperative to the business, and something new can challenge stability. What both parties need to realize is that their success lies in working together cohesively, and that blockchain will amplify business velocity rather than block it.
Firms must align their attitudes on innovation and change so they can address risk in the short term, and implement successful blockchain solutions. Rather than trying to overhaul everything at once, they must be strategic and thoughtful about how they incorporate the technology and how fast they should move. It’s just that simple.
The financial industry faces high levels of regulation, redundant processes and operational inefficiencies that are a byproduct of the competitive rush toward computerizing the industry through the 1990s. These hurdles are unlikely to loosen anytime soon. The industry needs to realize that the network effect is key to the successful adoption of technologies such as the blockchain. Taking risks to remove risk isn’t about deciding on whether to use new technologies like blockchain; it’s about deciding how best to implement it commercially, and to do so within the surrounding constraints. This requires all facets of the firm to be more aligned to a shared strategy and come to decisions jointly.
To learn more on gaining blockchain momentum within finance, please read our report. Additionally, if you happen to be at the Sibos 2017 conference from 16 October through 19 October at the Metro Toronto Convention Center, I invite you to find me at the CLS stand (Stand #M02) to continue a more in-depth dialogue on this topic. In addition, IBM representatives will be available at Stand #E08. To schedule a meeting with them, please go to ibm.com/sibos.
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