According to a new study by McKinsey & Co, retail banks have been slow to adopt blockchain. Blockchain technology has evolved significantly providing mechanisms to cut inefficiencies. Marvin Cole, Ovamba CEO states that “Blockchain is strategic to Ovamba”.
Analysts and experts believe that, if implemented correctly, the blockchain technology will improve the global financial sector, but retail banks have been slow to adopt blockchain according to a new study by McKinsey & Co.
Most players in the financial sector are still in the experimental phase despite great strides that start-ups have made has made in developing digital business models.
The study revealed that investment banks, governments, and infrastructure providers are experimenting with blockchain technology in the belief that a shared electronic ledger will enable them to cut costs and improve transparency whereby post-trade processing and settlements are instantaneous. This will eliminate many middle- and back-office processes. The investment banks also focus on the huge potential for smart contracts to enhance automation. Ovamba agrees and has been using Blockchain as the backbone of its TradeTech system for more than two years.
McKinsey believes that it is understandable that the retail banks are quite cautious currently. The future regulation of blockchain itself is still uncertain. However, tough regulatory requirements create a high entry barrier.
Regulators like the UK’s Financial Conduct Authority (FCA), are still developing regulation policies, while in the US, the Securities and Exchange Commission (SEC) has already blocked all trials of Blockchain-based ETFs.
For the technology to roll out on a large scale, retail bank executives need to believe that the long-term benefits of blockchain are worth the implementation costs. The benefits of implementing blockchain technology include less friction, lower costs, and a safer retail banking system. Investors may want to reconsider their investment options. Ovamba’s tested trade, investment, sharia compliant investment vehicles are being rolled out across Africa; giving African banks a lead over their UK and USE peers.