“Deloitte” is the brand under which tens of thousands of professionals in independent firms throughout the world collaborate to provide audit, consulting, financial advisory, risk management, tax and related services to select clients.
The world's second largest professional services network by revenue, Delloitte is one of the “Big Four” international professional services networks, alongside KPMG, Ernst and Young, and Price Waterhouse Coopers. The network provides financial advisory services to over 225,400 professionals around the globe, generating US$35.2b in revenue during 2015.
Deloitte also provides residential training for its employees, at “The Leadership Center,” Deloitte University. The University Press recently released “Blockchain: Democratized trust, Distributed ledgers and the future of value.” The post was co-authored by Eric Piscini, Principal, Owner at Deloitte and Strategic Disrupter; Joe Guastella, Principal at Deloitte Consulting; Alex Rozman, a Deloitte Advisor; and Tom Nassim, a Consultant at Monitor Deloitte.
“Trust is foundational to business, yet maintaining trust—particularly throughout a global economy—is expensive, time-consuming, and, in many cases, inefficient. Could blockchain applications become part of the answer?”
According to the post, financial services industry organizations are “aggressively pursuing blockchain investment and experimentation.” Approximately US$1b has been invested in blockchain-related start-ups to date, half of that figure was in the last calendar year. Examples from the “front-line” include the Royal Bank of Canada (RBC).
With over 16 million clients around the world, and operations located in 40 countries, RBC executes large numbers of cross-border payment transactions every day, including bank-to-bank, business-to-business, and peer-to-peer remittances.
“The traditional process used throughout the banking industry to execute such transactions can be cumbersome, often involving multiple intermediaries, customer fees, and lengthy reconciliation tasks. Recognizing an opportunity to increase efficiency and lower operational costs, two years ago RBC began looking for technologies that could help it develop a new approach to cross-border transactions.”
RBC has been exploring blockchain technology with Ripple, a real time gross settlement system built upon an open source distributed ledger. Eddy Ortiz, RBC Vice President, explained that when the financial institution first became interested in the technology, the focus was largely on bitcoin: “As we came to understand more about the challenges we faced, we realized the underlying technology powering [bitcoin] was what was particularly exciting.”
RBC is also exploring a blockchain powered loyalty platform, to engage customers in real time and assisting them with a better understanding of the points and rewards they are accruing.
“Blockchain’s ability to replace middlemen with mathematics is precisely why this technology matters. It can reduce overhead costs when parties trade assets directly with each other, or quickly prove ownership or authorship of information—a task that is currently next to impossible without either a central authority or impartial mediator.”
The Nasdaq Stock Market are also betting on blockchain technology. Currently the second largest exchange after the New York Stock Exchange, Nasdaq is currently managing the issuance and exchange of private company shares using a paper-based manual process. “This can be cumbersome, time-consuming, and error-prone,” states Deloitte.
In October 2015 Nasdaq launched Linq, a blockchain-based platform which can manage the buying and selling of private company shares. Linq provides clients with a digital ledger that creates a record of every transfer of security among private users, providing improved auditing and increased transparency of ownership. Some of the first companies on the platform include Synack, Tango, and Vera.
“With new use cases emerging weekly, it’s worth examining both the underlying benefits of blockchain as well as the operational areas in which blockchain may add little value.”
Deloitte is encouraging businesses to “aggressively explore” scenarios in which blockchain could reinvent parts of their operations, value chains, or business models. They should look for ways blockchain could help bring new efficiencies to costly, slow, or unreliable transactions and introduce new models for partnership and collaboration.
The advice isn’t just for external companies, Deloitte firms have also shown interest in blockchain technology. There a dedicated team working on a one stop blockchain platform, Rubix, which will “help or allow you to prototype, test, and build your own customized blockchain and smart contract application for any use case.”
According to Deloitte, the starting point for any business considering blockchain, is to seek out education, emersion into the community, await inevitable regulation, and remembering to incentivise miners: “Whatever the specific play, it is time to dig in, gain understanding and experience, and determine if—or, more likely, where—blockchain can help in your organization.”