Name: Here’s Why Banks Need to Jump on Board With Blockchain
Uploaded: 2016-08-15
Duration: 2 min 46 s
Description: It could be here sooner than you think.

[ SOUND ] A new report says the block chain, the technology that underpins the digital currency BitCoin, will become central to the global financial system. Bob, do you buy this? I buy it hook, line, and sinker, Andrew, because it is happening. It is going to change, it's inevitable, That the financial industry is going to overhaul their infrastructure and the Blockchain is going to do it. Really? Absolutely. Yes, and now the World Economic Forum, they're the one's who released the report, they said that four out of five banks are going to be using Blockchain tech by next year. That is very soon. The future is here. It's happening right now. Bob, did you actually read the report? I read the report, Andrew. Come on. They did say that, but they also said that they weren't going to be using them centrally in their operations. They were going to be introducing blockchain as an experiment, a special project. They're basically trialing this stuff. You can understand why, I mean the block chain is a very, very different kind of technology. It's a distributed leger, right? The idea that you can get approval from two different entities without having that central arbiter, right? But the problem is, that's actually how the financial system works everywhere else. There is a central authority and the idea is to stamp out corruption. Do you really think the financial system's gonna basically invert its self? For the botching. Look if they don't get with the program they're going to be totally circumvented by this technology. So I mean everybody's trying. This is an opportunity not a threat. But the fact that you've got 80 % of banks that are going to get up and running in trial programs. True. Even in the next few months. That is a feat in and of itself. But look okay let's take the argument on its face. Let's say that the banks actually adopt this and they're fully Behind it and all that kind of stuff. Is this actually better for them? Honestly, is this actually better for them? I mean, look, I'm a big defender of the block chains possibilities. I think it can be used in a lot of different interesting applications, but when it comes to financial transactions, I'm not sure it's actually faster. A lot of folks have criticized the slowness, and the reason is, because they have to get approved from all those different places at once. To conduct the transaction. If you add on top of that the layer of regulation that all transactions are susceptible to, the reason that it takes three business days for me to give you money- [ CROSSTALK ] Are banks really going to go for this? Look, first of all, the people who are selling this are saying that it's going to cut down, potentially, the settlement time for trades from days to minutes. Right. So The thing that gets you is it's not as efficient because you've got duplicated resources everywhere. I mean there's a lot of hype about the block chain right now. People are pitching it to solve every solution. It has very particular use cases. It is not a cure all by any means. However, it is going to radically change the backbone of the financial industry. I would look out for those 20 % of banks that are not getting with the program now. That's a fair point. For one show that's central to your media diet, come to Fortune. com for more tech debate.