{"id":14044,"date":"2019-09-17T00:05:51","date_gmt":"2019-09-16T18:35:51","guid":{"rendered":"https:\/\/www.technologyforyou.org\/?p=14044"},"modified":"2019-09-17T00:05:51","modified_gmt":"2019-09-16T18:35:51","slug":"blockchain-standards-for-financial-services-are-currently-fragmented-and-immature","status":"publish","type":"post","link":"https:\/\/www.technologyforyou.org\/blockchain-standards-for-financial-services-are-currently-fragmented-and-immature\/","title":{"rendered":"Blockchain standards for financial services are currently fragmented and immature"},"content":{"rendered":"
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\u2022 Gartner Says Blockchain Deployments Across Financial Services Ecosystems Are At Least Three Years Away<\/strong><\/span><\/p>\n<\/div>\n

\u2022 Blockchain Standards Are Highly Fragmented; No More Than Four Standards Will Dominate the Market<\/strong><\/span><\/h4>\n
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Lack of interoperability standards will prevent pervasive\u00a0blockchain deployment across financial services ecosystems for at least three years, according to Gartner, Inc.\u00a0<\/strong><\/span>\u201cBlockchain standards for financial services companies are currently fragmented and immature,\u201d said\u00a0Fabio Chesini, senior research director at Gartner.<\/strong> \u201cWe are three to five years until standards mature and settle.\u201d<\/span>Standards\u00a0<\/strong>are critical for financial services entities because they are constantly moving assets between clients, partners and other institutions. Today, bank CIOs can choose from numerous blockchains, available from either enterprise-grade approaches such as Corda, Hyperledger, and Digital Asset, or the many public blockchain standards like Bitcoin, Ethereum, Cardano, EOS, and Tezos.<\/strong> They are all trying to become the de facto state machine for value exchange and digital asset representation, smart contracts and decentralized applications. This indicates the fragmentation of the various standards.<\/span><\/p>\n

\u201cBank CIOs must be mindful of this nascent and fragmented state of blockchain standards,\u201d said Mr. Chesini. \u201cIt is unlikely there will be a single de facto standard like in the Open Systems Interconnection (OSI) model, at all levels. Given how new and fragmented the state of blockchain standards is, we expect no more than four standards to lead the market in the next three to five years.\u201d<\/span><\/p>\n

In addition to standards, Mr. Chesini warned financial services CIOs of three additional impediments when deploying blockchain projects : governance, integration and interoperability.<\/span><\/p>\n

During\u00a0Gartner IT Symposium\/Xpo<\/a>, which is taking place in Cape Town through Wednesday, Gartner analysts have been discussing how business and IT leaders can create value from blockchain.<\/span><\/p>\n

Governance<\/strong><\/span><\/p>\n

Blockchain governance\u00a0is important because it regulates activities occurring across the ecosystem and provides legal assurances that there arbitrary decisions will not be made as an abuse of power against other participants.<\/span><\/p>\n

\u201cGovernance specifies how value is exchanged, but also how those data exchanges are recognized and recorded, as well as who has access to them and who can exchange value with whom,\u201d said Mr. Chesini.<\/span><\/p>\n

\u201cGovernance and management of private and permissioned blockchains in any form, including consortia, will remain centralized and hierarchical during the next three to five years, making blockchain governance in financial services a key impediment for the same period,\u201d said Mr. Chesini.<\/span><\/p>\n

Integration<\/strong><\/span><\/p>\n

To achieve the true potential of blockchain, implementations must be seamlessly integrated with already installed software solutions. However, major software and SaaS providers aren\u2019t offering blockchain solutions as add-on features to their enterprise solutions. As a result, financial services organizations are paying a high cost for continuously maintaining and \u201creintegrating\u201d blockchain implementations into their new and existing enterprise software solutions.<\/span><\/p>\n

In the next two to three years, Gartner analysts expect all major ERP and CRM players to offer blockchain capabilities as an add-on feature for their software and SaaS products. Software suppliers, meanwhile, will integrate and upgrade their chosen blockchain versions and ensure compatibility with their own new software releases.<\/span><\/p>\n

\u201cThese efforts will dramatically reduce the cost of deploying blockchain projects across the financial services organizations and their supply chains,\u201d said Mr. Chesini. \u201cIn the meantime, the full-lifetime costs of integrating a blockchain solution in an organization will be millions of dollars in consulting fees, reengineering, development and upgrades. These high costs drastically slow the widespread integration of blockchain initiatives.\u201d<\/span><\/p>\n

Interoperability<\/strong><\/span><\/p>\n

Bitcoin, R3, Ethereum, Hyperledger and others often use differing implementations, data formats, data interchange and directories makinginteroperability among different blockchains difficult across organizations.<\/span><\/p>\n

\u201cAs financial services companies constantly move financial instruments and assets to other financial services companies and partners, cross-industry interoperability standards are, and will be, critical,\u201d said Mr. Chesini. \u201cToday, they are looking to replace current banking vehicles for payments like Western Union, or international money transfers like SWIFT, with blockchain-based platforms.\u201d<\/span><\/p>\n

Fixing these types of data exchange standards will enable numerous blockchains to coexist and to share their ledgers, as necessary. However, as blockchains are a moving target and keep evolving, interoperability solutions are still three to five years away.<\/span><\/p>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

\u2022 Gartner Says Blockchain Deployments Across Financial Services Ecosystems Are At Least Three Years Away \u2022 Blockchain Standards Are Highly Fragmented; No More Than Four Standards Will Dominate the Market Lack of interoperability standards will prevent pervasive\u00a0blockchain deployment across financial services ecosystems for at least three years, according to Gartner, Inc.\u00a0\u201cBlockchain standards for financial services […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[7801,7802,6561],"class_list":{"0":"post-14044","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-technology","7":"tag-blockchain-deployments-across-financial-services-ecosystems","8":"tag-deploying-blockchain-projects","9":"tag-gartner-it-symposium-xpo-2019"},"_links":{"self":[{"href":"https:\/\/www.technologyforyou.org\/wp-json\/wp\/v2\/posts\/14044","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.technologyforyou.org\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.technologyforyou.org\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.technologyforyou.org\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.technologyforyou.org\/wp-json\/wp\/v2\/comments?post=14044"}],"version-history":[{"count":0,"href":"https:\/\/www.technologyforyou.org\/wp-json\/wp\/v2\/posts\/14044\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.technologyforyou.org\/wp-json\/wp\/v2\/media?parent=14044"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.technologyforyou.org\/wp-json\/wp\/v2\/categories?post=14044"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.technologyforyou.org\/wp-json\/wp\/v2\/tags?post=14044"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}