As blockchain technology continues to cause major disruption in the financial sector, Dr Lee Brain, Chief Technology Office at Barclays, considers how the bank is redefining both its products and processes – and why it is “cutting through the hype” to deliver tangible benefits. to customers.
Blockchain has changed the way people think about money. Barclays began researching how to develop the technology four years ago, as it has numerous potential applications in banking, beyond its most popular use in cryptocurrency.
Dr Lee Brain, from the Bank’s Chief Technology Office, explains: „Our role is to cut through the hype and find where the real 'diamonds’ are. We are focused on identifying use cases for blockchain that will transform the way we do business better, by streamlining processes and removing inefficiencies across our industry.” – ultimately for the benefit of our clients and customers.”
Collaboration to make blockchain possible
The prevailing view is that blockchain will have two major changes in the way Barclays does business. The first lies in its vast potential to bring financial institutions closer together and facilitate global cooperation. The second is to create real efficiency in the way the bank processes data.
„To some extent, the first shift around industry collaboration is already happening,” says Brian. „This is partly because the initial hype around blockchain and cryptocurrencies created a 'fear of missing out’, but mainly because the investments required to create new business systems only have viable business cases when the industry collaborates.”
Among other collaborations, there is Barclays Recently announced He is one of the investors, along with other major financial institutions, in the creation of Utility Settlement Coin, a new digital currency instrument implemented on distributed ledger technology that links commercial bank money with central bank money. The objective of this initiative is to introduce greater efficiency and reduce risk in wholesale markets.
„The second shift is in product and process innovation,” says Brian. „Barclays has explored a number of interesting applications for Blockchain: facilitating payments infrastructure, the use of smart contracts to standardize post-trade processes, and efficiently connecting parties in trade finance and syndicated lending.
„For us, the real value of blockchain lies in the significant improvements in data processing, which requires inefficient reconciliation due to the variations in systems in different organizations, their different internal processes and data formats, that can now be automatically synchronized. Distributed ledger technology. The prize is given when we solve these kinds of problems. , will save the industry billions.
Defining industry standards for blockchain
It is clear that blockchain has enormous potential in its future. But as a company with more than 325 years of history, Brian says Barclays’ role is to go beyond exploring the various uses of technology.
Nicole Chandler, Head of Innovation Policy, explains: “We see our role in the blockchain ecosystem not only as an innovator pushing the technology forward, but also as a steward using our experience to ensure each use case is fit for purpose and secure for customers. , customers and wider society.”
Dr Lee Brain, Chief Technology Office, Barclays
Chandler is one of three bank representatives on the European Union’s expert panel, along with other Barclays colleagues, to define what bespoke rules are needed for each new application of blockchain.
Although blockchain technology is not regulated, different uses of the technology require different rules.
One way to test and learn is to use a 'sandbox’. It is a tool originally developed by the Financial Conduct Authority and now adopted globally, which allows testing innovative new ways of using blockchain in a secure space, understanding what is and is not allowed within regulatory rules.
Blockchain beyond banking
It’s not just Barclays and other big banks that are experimenting with new uses of blockchain. A growing number of fintech startups are at the forefront of leveraging technology in innovative ways.
Including many companies crowd, CapexMove And Synchronization Graduates from the Barclays Accelerator powered by TechStars program – a global network dedicated to helping fintechs.
We see our role in the blockchain ecosystem not only as an innovator pushing the technology forward, but also as one responsible for using our experience to ensure that every use case is fit for purpose and secure for clients, customers and wider society.
Blockchain is changing lives beyond financial services. In aviation, for example, it’s changing the way people buy airline tickets, and in healthcare, it’s making storage and access to medical records safer and more efficient.
For Barclays’ customers and clients, these companies’ innovations will mean faster and more secure services, and efficiencies that could result in cross-border blockchain adoption could see a drop in business costs – because information can be securely synchronized. in real time.
„Has blockchain been overhyped in the past few years? Maybe,” says Brian. „However, when you cut through the hype, what’s clear is that this technology will bring tangible benefits to all of our daily lives. As long as we all cooperate, this is ultimately one of the fundamental principles of blockchain.
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