Mark van Rijmenam, Speaker on Big Data, Blockchain, IoT and Disruptive Innovations, talked about the seven benefits of blockchain for the finance industry in his recent article. Below are the first three benefits:
Transactions can be done in minutes or seconds, while currently, settlements can take up a week. With Blockchain, settlements become user-optimised, which will save a significant amount of time and money, for both parties involved. Blockchain will remove the need for a lot of middle-office and back-office staff at banks, as transactions settle instantly. As such, banks have an important drive to explore Blockchain for improving settlements and some banks explore internal options first, while others explore options between banks first.
2. Improve Capital Optimisation
One of the main features of Blockchain is that it removes the need for a trusted intermediary and makes peer-to-peer transactions possible. When Blockchain is applied in the financial services industry, it could render useless the fee-charging intermediaries such as custodian banks (those that transfer money between different banks) or clearers (those vouching for counterparties credit positions). As such, Blockchain offers better capital optimisation, due to a, significant, reduction in operational costs for banks. In addition, when banks share a Blockchain, the total costs of that Blockchain and the surrounding ecosystem might be higher than individual costs of managing transactions at a bank. However, the costs are shared among all participating banks and as such, there is a significant cost reduction.
3. Reduced Counterparty Risks
When transactions are settled near instantly, it will remove a significant part of the risk that the counterparty cannot meet its obligations, which could be a substantial expense for banks.
Mark van Rijmenam is Founder of Datafloq.com, founding partner of think tank The Digital Leadership Initiative in Sydney and also the author of the bestselling book “Think Bigger – Developing a Successful Big Data Strategy for Your Business”.
Mark is an entrepreneur with a drive for (disruptive) innovation who aims to be a catalyst for global innovation and to enable organizations and societies to tackle some of the world’s biggest challenges. Mark Van Rijmenam believes in sustainable, social and economic responsibility when doing business or creating companies. Let’s use the latest trends such as Big Data, Robotics, Virtual reality, Artificial Intelligence, Nanotechnology or 3D printing to change and improve the world and create a better place for all. He is aware of the latest trends in the world that impact organisations.
Currently, he is a PhD Candidate at the University of Technology, Sydney. He has received two scholarships to do so. He has also been named a global top 10 Big Data influencer.
As a highly sought-after international keynote speaker on big data and disruptive innovation, Mark has given lectures at the Business University Nyenrode and has spoken in Australia, France, China, United Kingdom, Germany, Belgium, South Africa, Colombia, United States, Dubai and The Netherlands among others.
Mark’s speaking topics include:
- Big Data and how to become Data-Driven
- What is the Blockchain and why is it important
- Customer centricity using Big Data
- Disruptive Innovation
- Cultural Change in a World Full of Data
- Design Thinking within an Information-Centric culture
- The Internet of Things and a Connected World
- Mega Trends Impacting Our Future
- Motivational Speaking: Achieving your Dreams