Why You Need a Blockchain Transformation Now to Prepare for the Future of the Banking Industry

First published on Financial IT on Oct 5, 2023

Are you transforming your organization with blockchain technology or will you be left behind by your competitors? Blockchain innovation offers incredible opportunity and ROI for organizations willing to embrace it — especially when it’s estimated to create $3.1 trillion in new business value by 2030. But today, many organizations are only considering one-off blockchain projects, when instead they should be embarking upon a Blockchain Transformation across their organization in order to bring the value, efficiency, and sustainability that blockchain can provide.

In 2014 I was tasked with implementing blockchain as part of a Blockchain Center of Excellence and I saw the impact blockchain could make not just in one department but across organizations. Since then I’ve been helping companies realize value from blockchain. Here are the reasons why CDOs must embrace Blockchain Transformation and help their teams understand this critical discipline so they don’t miss out on this $3.1 trillion opportunity.

What is Blockchain Transformation?

Blockchain Transformation has the potential to be the next big tech evolution since the invention of the internet, given the opportunities and value that blockchain can bring to the banking and finance industry. It's not just about bringing a new technology into your organization. Blockchain Transformation is a discipline that combines strategies, methods, and tools that organizations can use to accelerate the value created by their blockchain projects.

Like Digital Transformation, Blockchain Transformation is a holistic approach to how people, processes, and technology combine that can open new doors to innovative, strategic, and revenue-generating possibilities. That includes adopting blockchain technology as the enabler, but also includes implementing a methodology for blockchain, leveraging those with blockchain expertise to be the guide, and upskilling the people that are already in the organization with blockchain knowledge. It also includes support for blockchain projects by building a community and partner network. 

How Blockchain Transformation is Like Digital Transformation

Embarking on a Blockchain Transformation in your organization will be similar to a Digital Transformation, which most organizations have done, or an AI Transformation, which many organizations are doing now.

Successful implementation of both Blockchain Transformation and Digital Transformation requires a clear strategic vision and alignment with the company goals, including short-term achievements and long-term transformational changes.

Both involve the adoption and integration of new technologies as well. Digital Transformation is about leveraging digital technologies to fundamentally change how a business operates, while Blockchain Transformation leverages blockchain technology and projects to change how a business operates. Both also create possibilities for new business models, customer experiences, and revenue streams.

Finally, both have similar consequences, in that if an organization lags on adoption, they will be left behind by the rest of the industry, and may not be able to catch up.

Why Now Is a Critical Time to Adopt Blockchain Transformation

79% of business leaders believe that blockchain and digital assets will be very or somewhat important to the financial services industry over the next two years. As it becomes more of a priority, and as more blockchain projects are launched, here are five reasons why now is the time to embark upon a Blockchain Transformation.

1: Competitive advantage in the digital economy

Blockchain technology offers unique benefits in this digital economy, including transparency, security, and efficiency. Companies that adopt and effectively implement blockchain solutions can improve their operations, reduce costs, and generate new revenue streams, ultimately positioning themselves as industry leaders. Additionally, businesses are starting to understand potential value creation with new blockchain business models and offerings, like asset tokenization, which are evolving at unprecedented speed.

2: Sustainability and responsibility

Blockchain technology can play an important role in achieving transparency and traceability in supply chains, especially as more governments are pushing businesses to adopt more Environmental, Social, and Governance (ESG) initiatives. Additionally, customers today expect transparency into how sustainable products were sourced. Through Blockchain Transformation and launching blockchain projects, businesses can demonstrate their commitment to sustainability and meet the expectations of customers as well.

3: More efficient processes and better ROI

In this economy, businesses are looking for ways to do more with less, and optimization will remain a key priority in reducing costs. Since blockchain provides an immutable ledger of movements, by adopting blockchain, businesses can track the entire process and identify bottlenecks, optimize logistics, and improve the management of their resources. Blockchain Transformation can finally enable organizations to realize real ROI on their blockchain projects, and not lose money on missed opportunities.

4: Upskilling and empowering your team

Blockchain skills and expertise are only growing in demand. One of the foundations of Blockchain Transformation is upskilling your current team members with blockchain knowledge and expertise so that they can oversee and execute new blockchain projects themselves. Blockchain Transformation puts people at the center of technology so they can steer into the future of the banking and financial industry. This is also an opportunity to nurture your talent so they don’t leave for the competition.

5: Value creation through partnerships, ecosystems, and consortia

Blockchain Transformation also serves to create value because it needs community to thrive, and requires a more holistic mindset approach to business. Through blockchain implementation, you actually work with the supplier or even the competition to generate more value through a consortium. Already 92% of organizations either belong to a blockchain consortium or plan to join one.

Adopting Blockchain Transformation Today

Similar to the way Digital Transformation has revolutionized businesses, Blockchain Transformation is a critical shift that organizations must adopt if they want to stay competitive in their industry and keep creating value for their customers. No longer should organizations simply consider one-off blockchain projects, but should embark upon a Blockchain Transformation that exacts change across the entire organization. Only then can organizations build the bridge from their blockchain ambitions to realized opportunity.