Blockchain

Blockchain – a future technology for the financial industry

Since 2015, the financial industry and other industries have been discovering the possibilities resulting from using blockchain technology and so-called distributed ledger technologies. Experts are convinced that blockchain technology can revolutionize the economy and society in a similar way as the internet. For most, the technology still stands at the beginning of a comprehensive development process. It has the potential to bring fundamental changes to existing business models and the business systems behind it. In joint projects like Hyperledger or R3, companies and credit institutions are developing new solution standards and visions for the future.

The many benefits of blockchains

The blockchain technology (distributed ledger) extends the current possibilities of web technologies essentially by three application benefits:

The traceable and secure transmission of tokens or virtual values without a central instance. The tokens can represent ownership rights.
Archiving sensor and transaction data nearly in real-time in a main ledger that is available to all participants (distributed ledger). The distributed ledger is updated by decentralized so-called miners.
Storing so-called smart contracts on blockchains makes it possible to automatically apply and implement processes in the blockchains in a contract-based and decentralized manner.

The distributed structure of the network makes blockchains extremely failure-proof and difficult to manipulate. The technology is especially applicable when a large number of persons or companies are involved in a process and decentralized data storage and execution thus suggest themselves. The potential for savings and automation, the high transparency, ever new applications, and the greatly increased demand for payment processes with virtual currencies have also made blockchains into a key process digitalization technology for financial services providers.

Perspectives and questions

Blockchain technology with its P2P functionality permits the representation of completely new business processes and eco-systems. This will result in completely new business models.

Previous intermediaries like trade platforms, banks, or retail businesses must rethink their business models. Due to its great scalability and potential for automation, they can also use the technology to implement their digitalization strategy. The Internet of Things is also much more scalable using distributed ledgers.

Financial institutes and intermediaries can still play an important role for decentralized technologies like blockchains. Regulatory authority, trust, and responsibility cannot be transferred to one technology or a so-called Decentralized Autonomous Organisation (DAO). Depending on purpose, various types of blockchain solutions are possible:

private blockchain solutions are used only within a corporation.
consortium blockchains as private blockchains with cooperating business partners are the more interesting and economically meaningful approach.
public blockchains, in which every interested party can receive read or write access to the blockchain without entrance barriers are familiar from the area of cryptocurrency.

Many new questions arise when using the technology. They concern the organization and access to the blockchain, the topics of law and regulation, as well as the security and operation of the blockchain solution.

Possible actions

Measures should be taken today in order not to miss out on the development:

long-term planning based on identified potential for change: we recommend investing in the blockchain technology, beginning pilot projects, and gathering experience.
active participation in consortiums and cooperation with regulators
analysis of internal ledger possibilities. This includes preparatory measures such as consolidation of data and applications.

Procedure and service spectrum

syracom supports its customers in the decision-making process and the implementation of projects based on the blockchain technology. Our methodology ensures that

you identify the right optimization potential and applications,
the right business areas and processes are included in the blockchain target picture,
a meaningful and technological architecture is defined as basis for a prototype.

Based on your needs, we will help your business in the next strategic, technical, and technological steps with the following services

analysis and idea development,
design phase and choice of technology,
project management,
creation of agile teams for implementation,
roll-out of your blockchain venture.

Together we will find out what potential blockchain technology has for the digital transformation of your business. We have many years of experience and industry know-how and will find the right solution for you – always with the practical end in mind and with mutual trust.