JPMorgan Chase and consultants Oliver Wyman have joined calls for traditional investment banking to “embrace the Blockchain” or be left disadvantaged.
JPMorgan: ‘Get Off the Sidelines’
In a joint report issued last week, the firms described the current industry mood as “a consensus… forming that [Blockchain] is the real deal.”
“Disregarding it is a risk,” they write.
Wyman and JPMorgan, the latter already heavily invested in ‘testing the water’ regarding Blockchain particularly for payments, highlight what they see as a lack of activity on the part of asset managers. They argue in the report:
The blockchain journey is likely to be long and the outcome is uncertain […] asset managers need to get off the sidelines and take the initiative to understand and embrace blockchain.
Last week similarly saw a report by consultancy firm Bain & Company which criticized banks for adopting a “wait and see” approach to growing innovation, something which could leave them “flat-footed” and vulnerable to competition and revenue collapses of up to $150 billion.
JPMorgan and Wyman however adopt a more measured tone.
“Initially, we expect the first two waves to be focused on sharing and using data, before expanding to critical infrastructure once confidence in distributed ledger technology grows,” the partners state. “The final wave, in which a truly decentralized financial ecosystem arises, is perhaps the most ambitious and the most uncertain.”
The full benefits to asset managers of a blockchain takeover would be felt only around 2030, they add.
A Long Journey Indeed
JPMorgan meanwhile is seeing a shakeup of its own path to direct Blockchain involvement. Its dedicated project, Juno, which the bank intends to use as a test for international Blockchain payments, lost its executive director in June.
The bank was also pipped to the post by a Ripple-AFB Financial partnership, which sent the first international interbank Blockchain payment last week.
Nonetheless, testing of the Ethereum-esque Juno is due to involve 2,200 clients in the UK and Japan, showing the scale of JPMorgan’s ambitions.
“Just as it was impossible to predict the impact the internet would have on financial services, it is impossible to know with certainty how markets will look or operate when distributed ledgers and cryptographically secured digital assets are the norm,” the report adds.
However, recognizing the impact that FinTech innovation continues to have on the industry, it is pragmatic to be well-informed and organized to unlock economic advantage in an increasingly digital world.
What do you think about JPMorgan Chase and Oliver Wyman’s attitudes to Blockchain technology? Let us know in the comments section below!
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