Blockchain ‘impeded by lack of collaboration’
Written by Peter Walker
New research has found that 83 per cent of European business decision makers expect blockchain to have an important or very important impact on their industry, but only two per cent of businesses are interested in collaborating with other firms for wider industry advancements as part of their blockchain strategy.
Technology consultancy firm Cognizant surveyed over 1,500 senior executives across banking and financial services, manufacturing, retail, healthcare and insurance, finding that Europe is potentially quite conservative when assessing the significance of blockchain.
Although 47 per cent stated their blockchain strategy is either already defined or is in process, the report suggests its potential is not yet being fully recognised.
For most European businesses, blockchain is being used as a new way of carrying out existing tasks rather than to innovate. Nearly half of respondents (49 per cent) said that blockchain would add to current operating models, without drastically change them.
The majority of respondents (70 per cent) considered competitive advantage to be a top benefit of blockchain, with business opportunities including addressing process inefficiencies (94 per cent) or even the creation of new service lines (62 per cent).
However, the research revealed several internal barriers stopping it from becoming impactful. These include truly understanding use cases and assessing their costs and benefits (51 per cent). Many businesses are still working on evaluating the technology’s feasibility, or comparing different blockchains, instead of focusing on actually developing practical ways it could be put in practice to improve business operations, noted Cognizant.
The study also showed that more respondents are experimenting with private, or permissioned blockchain models (40 per cent) rather than open, or public blockchains (39 per cent), mostly due to public blockchains being seen as a bigger data security risk.
Lata Varghese, blockchain consulting practice lead at Cognizant, explained that in a very short time, blockchain has grown from a technology with narrow applications related to payments and cryptocurrencies, to one meriting attention from many business leaders.
“The challenge for business across Europe is that blockchain does not fit into current operating models,” she commented. “This way of working will mean that the full potential of blockchain may not be realised quickly enough across the region.
“Blockchain needs to be approached as an open, collaborative and disruptive power that can be used for institutional innovation, not merely as a way for conducting business as usual,” she concluded.
During a panel at London FinTech Week this summer, experts agreed that financial services firms must have a strong collaboration programme to stay ahead
“Financial services companies must incorporate the test and learn environment, learn from their failures and bring in expertise to navigate the unfamiliar waters,” added Sharon Henley, communications director for the British Blockchain Association.
She described the “Wild West” environment in which blockchain has grown as an example of this, with many companies exploring use cases for where the technology does not fit – until there is a set environment for it to thrive.