Meet Deloitte's Financial Services blockchain leader

Word on the street is that this is the year blockchain breaks out and goes mainstream—is that what you’re seeing?

Mainstream is in the eye of the beholder. Ask any early adopter or crypto-enthusiast trading alt-coins and they’ll probably say blockchain is already mainstream. The rush to invest is just one indicator that blockchain has crept into the public sphere. Blockchain is as likely to be on a CXO or board agenda as cyber security and a wave of consortia are redefining competitive and industry boundaries as companies work together to leverage this disruptive technology for the greater good of all.

In financial services, the genie is out of the bottle: Blockchain and other distributed ledger technologies have inspired the industry to reexamine processes and functions that have been static for decades.

Embracing fast failure—a fundamental approach to innovation—financial institutions and intermediaries are already shelving early use cases as collective knowledge about blockchain expands. In this “hype meets reality” phase, many early adopters are shifting expectations but not giving up on the technology. This is good news: Now, initial minimal viable products must generate positive ROI in addition to proving the technology.

Blockchain is moving quickly from proof of concept to “proof of practical” with real-world, actionable solutions. Deloitte will continue to help clients experiment with the technology while shifting focus to new business value and efficiency in their value chain, their industry, and the space between industries.

Why are you bullish on Deloitte’s ability to help clients get blockchain right?

If you’re on a board or CXO team and you can’t put direct value on something, how are you going to justify the investment? This is where Deloitte excels: Our perspective is truly holistic and focused on business value. In our view, blockchain is fundamentally about value creation, reduction of complexity, process improvement, and value within companies, the supply chain, and between industries. We are first and foremost focused on what leaders really need to know: What’s the business value?

We also recognize that blockchain can introduce wide-ranging complications like considerations for data residency, data privacy, tax, legal, audit, regulatory requirements, and independence. Operationalizing blockchain involves much more than testing blockchain technologies on use cases.

Breadth and depth of knowledge becomes the real Deloitte difference here—we know ways to leverage blockchain investments beyond the technology itself and can help clients address the broad business, finance, tax, strategy, and regulatory implications. We bring knowledge and experience in all of these areas, as well as deep industry understanding and technology specialization, and we are widely viewed as blockchain leaders with demonstrated results around blockchain as a business solution. Deloitte can help assess the business case, identify high-value use cases, and determine the most effective underlying blockchain technologies and ecosystem players, while offering a full front-end to back-end strategic view of the potential tax and audit implications. Because we bring together a highly skilled cross-section of people located worldwide—industry specialists, tax professionals, technology leaders, former regulators, human capital professionals, auditors, and other specialists like actuaries—we are uniquely positioned to help clients explore every aspect of blockchain for their business.

What’s your perspective on “Wall Street fatigue” around blockchain?

A year ago, we were saying blockchain needed a break-out moment. Last fall, we found 26,000 new blockchain-based projects in the GitHub open-source community in 2016 alone; today, 92 percent of those are inactive. No wonder there’s fatigue.

Leaders are still waiting for a more definitive demonstration of blockchain’s business value. What’s the solution? The CXO community knows this is a big deal with cost-saving implications. But they’re seeing too little return on investment without knowing more specifically what this emerging technology can do for their business—and how. The next two years are critical, as we wrote in this Deloitte Insights article last December; executives need to push beyond obstacles in an effort to turn successful prototypes into fully deployed production solutions.

Blockchain is enabling a completely new level of information exchange within and across industries, but it’s just the railroad tracks. Connecting blockchain to other emerging technologies, particularly the cloud and automation, presents very real opportunities to create significant and completely new value for businesses beyond what any individual technology could deliver. In the many disparate blockchain efforts underway right now, we’re seeing an opportunity to integrate and coordinate multiple blockchains for business solutions that have yet to even be conceived. The real innovation is down the road when we start seeing synergies and truly understand the possibilities of the secure shared ledger as a way to break down silos between industries, functions, and technologies. It’s not about the railroad; it’s about the world of possibilities opened up by the movement of goods and services via an entirely new system.

How do you think blockchain will shape the future of financial services?

In every industry, including financial services, everyone from executives in the C-suite to technologists in the back office should be thinking about ways blockchain could shape the future of their industry and impact their business. The ideas can—and will—come from everywhere because fundamentally blockchain is a disruption of business models and business processes, not a technology-focused disruption.

Blockchain will be disruptive but it will also find its place and create opportunities.

Blockchain can enable financial services companies to offer some services with lower cost, better security, and improved visibility, while creating new product opportunities and new operating models. Just as the internet reshaped where and how companies allocated costs, generated revenue, and defined profit, blockchain offers similarly profound shifts. In 1990, could we have envisioned commerce and retail as we know it today with the internet and ubiquitous access through mobile devices?

Principles of innovation—adjusting to both known and unexpected outcomes of new models—are at the foundation of discovery and innovation with blockchain. We should all focus now on how this new innovation can drive capability within and across industries. Again, blockchain is enabling a completely new level of information exchange, but it’s just the railroad tracks. The most important question is “what’s the value”?

As the new blockchain leader, how would you like to see Deloitte’s financial services blockchain practice evolve over the next six months? The next two years?

The next six months will be very exciting for the Deloitte FSI Blockchain practice. We will continue to co-create with clients to build meaningful solutions in the market. We are at the center of aligning companies within industries to form consortia. We are leveraging our dev/ops capabilities to build minimal viable products rapidly in our delivery centers. And we are investing in people and technologies that enable us to build valuable new blockchain solutions, some of which we will highlight at the Consensus Conference in New York this May. Over the next two years, we expect our blockchain practice to become part of the fabric of our offerings, in the same way internet and web-based solutions became core Deloitte capabilities over the past 25 years.