Institutional Investors Still Mixed On Blockchain

While the concept of incorporating blockchain’s tech into their own business models is gaining steam, institutional investors are still mixed on moving forward at full pace with exploring the full breadth of blockchain’s potential.

In fact, in new research from State Street Corporation on the subject of blockchain, the data shows that a majority of asset owners/managers (57 percent) expect blockchain to be a widely accepted norm in the investment industry within five years — only 7 percent of those have actual programs in place to support that concept.

“A majority of institutional investors are well-aware that blockchain, an ‘emerging technology,’ could become an everyday application in the near future,” said Antoine Shagoury, global chief information officer at State Street. “What’s clear from our research is a lack of readiness and uncertainty for how to best plan for this disruption and a need for more education.”

The survey also found that 74 percent of asset owners say they believe blockchain will achieve the scale needed for adoption, while only 42 percent of asset managers said the same. Moreover, only 48 percent of asset owners said they don’t know enough about it; 78 percent of asset managers said they needed more education on the technology.

Other findings of the survey suggest the following:

• IT and investment teams will be most affected: 80 percent say blockchain will have the greatest impact on IT departments, and 81 percent of asset managers agree that the adoption of blockchain will equally disrupt their own jobs on investments teams.
• Security is the biggest concern: Nine out of 10 respondents said they worry about how security implementation in blockchain will address existing and future requirements.
• The private use will trump public adoption: 55 percent of both groups said blockchain is most likely to be used privately by companies with their clients. Just 13 percent believe blockchain will be used broadly by the public.

“We’re excited by the opportunity blockchain presents and are working to make it a tangible reality for our businesses, partners and clients,” said Hu Liang, senior managing director and head of State Street’s Emerging Technologies Center. “We are actively supporting several blockchain and blockchain-inspired initiatives, both internally and as part of a handful of consortia of the world’s biggest banks and technology companies.”