BANKING ON BLOCKCHAIN 8 THE BLOCKCHAIN GENIE IS OUT OF THE BOTTLE There is undoubtedly good reason for all the excitement around blockchain in Financial Services and particularly in capital markets. While we don’t believe it will completely disintermediate or replace the current ecosystem players, we do think its impact will be transformational. A common analogy is the rise of the Internet: those who embraced change created entirely new products and business models – and reaped the rewards. Of course there were many business models that resulted in costly failures too. In a similar way, blockchain is challenging industry players to fundamentally reimagine their data sharing processes. There is no turning back, especially considering the pronounced impact it will have in prompting investment banks to re-architect current business models, operational functions and profitability profiles – in both the short and the long term. However, C-suite managers should consider making controlled and well-hedged bets to avoid expensive mistakes while being well positioned to reap benefits of the new model. But to fulfil the promise, investment banks must rethink their strategies and approaches to workforce optimization, data center requirements, storage, networking and security. As with the Internet, the early adopters will be best placed to optimize costs, drive entirely new revenues and benefit from all that blockchain can deliver. Learning from past “Blockchain is experiences with transformative technologies, investment banks have adopted the strategy of setting up in-house labs, challenging industry joining industry consortiums and funding or forming joint- ventures with firms fully invested in blockchain. players to fundamentally With this tantalizing prospect attracting reimagine their data so much interest, innovation and sharing processes. investment, are you ready to seize the opportunity? There is no turning back.”