Wednesday, April 20, 2016
Payments, banking and fintech executives convened April 13, 2016, in midtown Manhattan to discuss the potential impact of blockchain technologies on financial services. Co-sponsored by Opus Consulting and Davis Wright Tremaine LLP, the event was hosted by NYPAY, a forum for payments and mobile commerce leaders. The panel discussion was live streamed to remote attendees throughout the world, some of whom participated on Twitter using hashtag #NYPAY.
The meeting reflects growing interest in digital currency schemes and distributed ledger technologies, as evidenced by a growing number of advocacy groups focused on these topics, including the Global Blockchain Forum, the U.S.-based Chamber of Digital Commerce, Australian Digital Currency and Commerce Association, UK Digital Currency Association and Singapore-based Association of Crypto-Currency Enterprises and Start-ups.
A panel discussion and Q&A session followed an hour of networking and refreshments. Moderator Eric Piscini, Principal at Deloitte Touche Tohmatsu Ltd., has handled digital and legacy banking infrastructures for the company, most recently managing a global initiative focused on blockchain use cases in various industries.
Piscini led a discussion focused on the evolving role of virtual currencies and their potential economic impact on traditional financial services. Panelists shared the belief that currencies like bitcoin will continue to disrupt banking, but they held differing opinions on how inevitable changes will affect global banking and careers in the space.
Additionally, panelists conceded that virtual currencies need to solve a problem in order to scale. Tiffany Wan, in-house consultant at JPMorgan, said, “Look at an area where there’s a pain point that needs to be addressed versus having a solution in search of a problem. Wan further noted that payments don’t sit in a vacuum, but are integrated into complex upstream and downstream networks in a dynamic ecosystem. Much of the details and economic impact will become more clear in pilot phases, she stated.
Mollenkamp has been leading business development at Ripple, working closely with channel partners on a series of strategic initiatives designed to drive process improvement in cross-border payments. “Increasing regulatory requirements have made cross-border payments a pain point for many banks,” he said. “Virtual currencies can solve these problems but may make it necessary to rethink core systems and models to achieve secure, real-time, cross border payments.”
Venture capitalist Robinson said he sees numerous financial and nonfinancial use cases for distributed ledger technologies, basically anywhere there’s a need for “simplification of a ridiculously onerous process.” Big banks may have a different role if we can connect all the debit cards around the world in real time, but they still fulfill a need for trusted partners, he said.
Beyond the implications of virtual currencies, the panel saw broad opportunities for the underlying technology to solve problems and improve efficiencies in the payments ecosystem.
R3's Breitman works with leading banks to design and deliver advanced distributed ledger technologies to global financial markets. “Blockchain technologies are good at forging consensus, tracking assets and coordinating databases,” she said. “They can unite a market, and [mitigate] a tense situation by creating a ledger that all stakeholders can rely on, with a validated audit trail.”
Mollenkamp added that it "solves reconciliation issues, speed issues and questionable ownership. When I trust you and you trust me, we only need a tiny little blockchain between us, [comparable to] a form of escrow.” He went on to say that fraud checks need to be incorporated into the system, because when money is moved in real-time, you can’t get it back. He compared the virtual currency space to the early days of automobiles, where growing adoption led to increased controls and regulations. “When cars came out, we didn’t need speed limits,” he said.
The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.
Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.