Practical Applications of Blockchain in Settlements and Securities Finance
Finadium
December 2016
Blockchain, also called Distributed Ledger Technology (DLT), remains a compelling technology in settlements and securities finance. Since our first report on blockchain in 2015, the focus has shifted from what is it, how does it work and why does it matter, to sharply directed questions on execution. Users are asking: when and if blockchain becomes implemented, how does this impact my business?
While blockchain as a technology has not changed, the financial services industry’s imagination of how it could be applied has expanded. The systems and businesses that blockchain must connect to have also evolved, making such lofty ideas as real-time settlement into a technical reality, if the industry determines it makes sense to move in that direction.
This Finadium research report investigates how blockchain companies are executing in actual production environments, and how blockchain has transformed from a disruptive technology to an accepted part of the industry mainstream. We are seeing the growth of three distinct business models in the technology industry related to blockchain, and the growth of vendors dedicated to each type of service. This evolution is familiar for a good reason: blockchain vendors are following well-established paths laid down by other technology firms in financial services, with similar results.
This report should be read by collateral and financing professionals in front office, post trade operations, strategy and technology roles. The report provides a breakdown of blockchain business models and the vendors behind them, the reactions of incumbents, and what the securities settlements and financing industries should look for next in blockchain development.
This report is 31 pages with 6 exhibits.
TABLE OF CONTENTS
■ Executive Summary
■ Blockchain’s Evolution in Capital Markets
■ Disruptive Technology Enters the Mainstream
■ Industry Analysis
– Blockchain as Core Banking Technology
– Blockchain as a Component of Big Technology Projects
– Blockchain as a Trading/Utility Platform
– A Lesson for Settlements in Trade Finance
■ Incumbents Embracing Blockchain
■ Projecting the Road Ahead
– Building the Infrastructure for Securities Processing
■ About the Authors
■ About Finadium