More Consortia? Banks See Model as Vital to DLT Efforts

Nearly three-quarters of banks and asset managers see the consortium mannequin as obligatory for exploring distributed ledger tech, in accordance to a brand new survey launched final week.

For the survey, worldwide regulation agency Simmons & Simmons polled 200 C-suite representatives as half of a bigger exploration of how they view monetary know-how alternatives. Notably, whereas most had been constructive in regards to the consortium mannequin, there have been hints that there could also be some weaknesses to the method.

For instance, 60% reported some present consortia have too many individuals, whereas 68% expressed a need to have extra management over the work ongoing in these teams.

Further, 40% reported a perception that becoming a member of an business consortium may have a damaging impact on their agency’s aggressive benefit, with 38% asserting that they’d quite concentrate on inner options to new know-how challenges.

Yet, report creator Angus McLean additionally famous the operational difficulties inherent on this sentiment, on condition that it is broadly believed blockchain and distributed ledger methods require a community impact to scale back prices and provide advantages.

McLean wrote:

“For distributed ledger-based solutions, for example, there is little point in having systems that work for only a small segment of the industry. The value is generated by enabling a network effect.”

In this manner, the report cited the work unveiled final 12 months by Utility Settlement Coin – a undertaking UBS, Deutsche Bank, Santander, BNY Mellon and ICAP made public last year – as an instance of a consortium it believes could be the proper dimension within the present local weather.

Still, the survey offers an fascinating glimpse into the sentiment amongst banks collaborating in consortia efforts, maybe shedding gentle on the longer term challenges to the mannequin.

Businessmen picture by way of Shutterstock