Blockchain may transform banking, says CBA CEO Ian Narev
CoinDesk, an online news publication covering bitcoin and its underlying technology, published a feature article last week with the headline: “Have we reached peak blockchain hype?”
That’s a fair question, given the extensive global attention the blockchain, or distributed ledger technology, has been receiving of late. Diverse applications are being touted, traversing banking, law, conveyancing and logistics to overturning corrupt governments in developing countries.
With banks around the world rushing to join projects to build “permissioned ledgers” (blockchains with a restricted membership), proponents in the financial services sector are growing acutely aware that hype can turn into a noose. And so blockchain expectations management is in full swing: technologists inside the banks are keen to avoid over-promising and under-delivering.
ASX chief Elmer Funke Kupper says blockchain could replace CHESS and move settlement to real time.
Nevertheless, Commonwealth Bank of Australia chief executive Ian Narev says Australia’s biggest and most technologically savvy bank intends to stay very close to blockchain developments this year, because of the potential for distributor ledger technology to radically change the cost structure for the banking industry.
“The normal development of these things is everyone talks about them like they are the next big thing early, then they trail off for a while. But then they come back, and are more significant than anyone even thought they were. That is something we would expect to pan out over the next couple of years [for distributed ledger technology],” he says.
“Our intention is to be right in the middle of the early stage R&D, because it has the potential to be that transformational for the business – both for customer benefits and for processes and costs.”