Corporates are now in a race to develop and deploy blockchain tools — and sure, part of the momentum behind that effort is the recognition that blockchain technology can lead to greater efficiency and speed in an array of business processes. But much of that effort is also due to the heightened sense of competition and urgency: The ability to tell stakeholders and industry rivals that blockchain is, in some way, already in use within an organization can certainly provide a competitive edge.
But because blockchain is such a new technology, organizations quickly figured out that collaboration is quite beneficial to making any progress in pulling blockchain solutions from the whiteboard and into the real world.
Today’s blockchain market is in an era of what Ron Quaranta, Chairman of the Wall Street Blockhain Alliance (WSBA), describes as “coopetition” — a mix of cooperation and competition.
The most glaring example of this is the existence of organizations like the WSBA itself, one of dozens of alliances and consortia that have formed in recent years to encourage various industry players, from companies to financial service providers to regulators, to come together and explore distributed ledger technology (DLT) and its implications for various markets. As this collaboration progresses, though, Quaranta told PYMNTS that it’s also becoming more clear that these conversations don’t exist in a vacuum.
“The Wall Street Blockchain Alliance is not only a Wall Street conversation,” he said. “Financial markets are clearly at the cutting edge and are beginning to understand the implications of blockchain. But the conversations are global, sweeping conversations that are going to impact so many different parts of how we do what we do — impact how we engage with each other, with economic entities.”
Working groups are forming to understand how DLT will affect their own segments of the market, but increasingly, these groups are beginning to collaborate with each other too. The WSBA recently announced another alliance with yet another blockchain group — the Blockchain in Transport Alliance (BiTA) — with this concept in mind. While the WSBA was initially formed to explore blockchain’s implications for the financial markets, and while the BiTA was formed to understand blockchain’s role in transit and freight, the two markets are inevitably intertwined.
“When you look at transport markets globally and how they impact the supply chain, when you look at the financial implications of supply chain and transport markets, we are looking at a convergence of the two organizations that are focused on our perspective communities as they evolve in the blockchain world,” explained Quaranta. “It’s a way for us to pull our member constituents in banking and insurance and trade finance and more into a dialogue about the evolution of the transport markets.”
The two groups may exist in separate markets, but, the executive added, both are exploring global implications of distributed ledgers.
“We often talk about this ‘coopetition’ model,” Quaranta said, “when we talk about WSBA members: major banks, brokers, dealers, hedge funds, investors, technology companies, insurance companies.”
The nonprofit trade association model allows organizations to come together and collaborate without pushing a product onto market.
“We don’t generate or develop software,” he noted. “We want to be an advocate for different banks that might ordinarily be competing with each other to protect proprietary information, but experiment and talk about things like best practices. You’re not being sold software. You’re being sold the idea that you can participate in policy and advocacy and collaboration.”
Corporate skepticism remains a hurdle, however, and Quaranta said he encounters it on a weekly basis. That largely stems from the struggle of tech-savvy professionals to convince their organizations’ executives to invest resources in exploring blockchain, though increasingly, Quaranta said he sees executives accepting the need to at least consider the technology.
“More and more, executives have moved beyond broad skepticism into the knowledge … that it might be strategic in the long-term,” he explained. “The argument to have them engage becomes easier over time.”
According to recent data from the Association for Financial Professionals (AFP), corporates still have a long way to go: Just 1 percent of corporate treasurers surveyed for the AFP MindShift survey, released last November, said they already have a blockchain tool implemented in their systems. Most (51 percent) actually have no plans to do such a thing.
The largest barrier to blockchain adoption could be education: 58 percent of treasurers told the AFP that a lack of basic awareness of new technologies like blockchain is holding them back from implementing those tools.
Quaranta seemed to agree. When it comes to getting corporates ready for the disruption of blockchain — in the treasury department and beyond — the executive said, “first and foremost,” there must be education.
“There is still so much education that needs to happen,” he said. “Most people are aware of blockchain, but there is still so much noise.”
He added that part of the education process is letting innovators within the enterprise have a bit of free reign when it comes to this tool and its potential.
“Give your firms and technologists and product folks and thought leaders and managers the ability to get their hands dirty,” said Quaranta. “There are so many implementations of blockchain. Give someone the power to explore that within a particular firm. See what happens. Let them play with a use case. That’s where you see best practices start to evolve.”
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