Ahead of the Blockchain World Congress on 13-14th September in New York, here are the five things you must know about blockchain in financial services.

1. What?

Blockchain can be thought of simply as a shared ledger, with the technology behind the scenes ensuring that it is secure, up-to-date and tamper-proof. Access to this ledger can either be public or private depending on the application.

2. Why?

Put simply, blockchain can increase the speed and decrease the cost of processing transactions. The technology uses a single, shared database, removing the need for complex message handling, translation and reconciliation. Transactions are therefore applied immediately, significantly reducing turnaround times and costs for (among several examples) trade settlements.

3. When?

Blockchain is now available as a development technology, and can be used by organisations to build applications that would benefit from shared, distributed and secure ledger functionality.  Beyond BitCoin however, there are few actual live applications, but there are key areas such as settlement and reconciliation where this is being worked on. The key is agreeing cross-industry standards and this is where a number of major banks, and organisations such as SWIFT, are working now.

4. Pitfalls?

There is a technological distinction between being a “consumer” of blockchain services and a “producer”. For the former, knowledge of blockchain APIs is essential. For the latter, developer-friendly technologies such as Ethereum can be utilised. However, this is still seen as a niche area for many financial services technology teams.

5. Competition?

The technologies that underpin blockchain (distributed data, cryptography, etc) have been available for a long time. It is the linking of them together into a single technology that provides the benefits - as such, there are no similar competitive offerings.

In summary, we have seen great progress in financial technology innovation, with blockchain likely to improve procedure and processes within financial services and the wealth management space. The potential for efficient and economical transactions provides an exciting prospect for the future of financial technology.

(Delegates to this year’s DataIQ Future can get an insight into the potential for blockchain within global data infrastructure. For more information, go here.)