The McKinsey & Co study showed that the retail banking services ecosystem rather slowly integrates blockchain technology, in particular because of problems with regulation.
While distributed registry technology (DLT) is rapidly gaining momentum in several sectors of the global economy, including investment banking, remittances and payments, the banking sector is not in a hurry to implement the blockchain.
According to a study conducted by McKinsey & Co, many retail banks fear integrating blockchain into their operations, despite the potential that technology offers. The current regulatory uncertainties that poison the blockchain ecosystem, as well as the high volatility of the cryptocurrency, have forced the retail banking sector to exercise caution.
However, governments, investment banks, and infrastructure providers are exploring blockchain technology, and are seeking to identify new ways to cut costs, while ensuring transparency and operational efficiency.
“For example, investment banks want transaction execution, post-trade processing and settlement to occur instantly, cutting off many redundant processes. They also focus on enabling smart contracts to increase automation, ”the researchers note.
According to the report, financial regulators around the world, including the US Securities and Exchange Commission (SEC) and the UK Financial Supervision Authority (FCA), have not yet formulated acceptable rules for the industry.
Despite regulatory uncertainty, large firms and venture capitalists continue to invest huge amounts in the development of the blockchain. In particular, in 2017, when the price of Bitcoin reached a record level of $ 20,000, venture capital firms invested $ 1 billion in the DLT sector.
In addition, some forward-thinking retail banks have formed alliances with blockchain projects, seeking to exploit the potential of technology. For example, at the beginning of this year, Santander Bank and IBM signed a five-year agreement on the use of the blockchain-based platform.