Perspectives

Meet Deloitte's Financial Services blockchain leader

Expanding our blockchain capabilities

Deloitte has been committed to blockchain leadership from its early introduction, working across industries to understand the technology and—more important—the potential business value of this breakthrough technology. In the following interview, our blockchain leader for the Financial Services industry, Richard Walker, principal at Deloitte Consulting LLP, shares his perspective and his vision for the future of Deloitte's blockchain efforts.

The word on the street is that this year blockchain is breaking out and going mainstream. Is that what you are seeing?

For sure. Every day, more and more clients are contacting us and we’re having meaningful discussions and reaching significant decisions about blockchain use cases and opportunities. There’s no question that we’re also seeing many more companies exhibiting a strong appetite for investing in blockchain transformation. So, to my mind, it is irrefutable that the genie is out of the bottle! And it’s not going back in. That’s because, in our evermore complex and uncertain world, the value-add of blockchain is clear and is making its mark. There are, for sure, more milestones to pass along the way before we reach mainstream.

Blockchain is growing exponentially and is on a definite trajectory to transform the nature of financial services.

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

You have to remember that blockchain is not just a technology. It’s a full solution stack. By that I mean blockchain impacts every dimension of a business. For that reason, Deloitte is especially well positioned to help companies define their full spectrum of challenges and opportunities—tax, audit, regulatory reporting, cyber, business model, revenue model, implementation, change management, and product launch, among others. If blockchain were just a matter of a technology implementation, I don’t see that Deloitte would necessarily benefit from any differentiation. But it is our ability to see the depth and breadth of the issues involved and our capability for delivering the appropriate customized approach and solution that makes Deloitte the clear leader in this space.

What’s your perspective on Wall Street’s current attitude towards blockchain?

Until a year ago, Wall Street, and financial services companies in general, were exhibiting some signs of blockchain fatigue, largely a byproduct of some of the buildup around blockchain that reached a crescendo in 2017-18. But over the past year, the nature and pattern of the conversations have changed.

What once was skepticism about blockchain growth, value, and opportunity has given way to a pent-up demand for help in understanding what it is that companies should be doing since they realize that ignoring blockchain is not a viable option.

In fact, a good number of financial services companies now appreciate that blockchain is vital to their long-term success and well-being. They see new opportunities ahead and are eager to get started with blockchain. The proof is in the investment dollars pouring into blockchain. In 2018, a peak year, $4.5 billion were invested in blockchain companies; in the first half of 2021 alone, $7.2 billion has already gone into blockchain. And the investments keep on coming.

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

Financial services are going to re-platform onto a blockchain architecture. All financial instruments—whether currency, securities, commodities, real estate—will all be represented by digital assets that move on a blockchain network. That means financial services will become simplified, more resilient, and will provide an “always-on” marketplace. Moreover, blockchain will help drive information and intelligence into the network via smart contracts and that will result in a more open and transparent financial system. In the short run, there may not necessarily be a plethora of new products as much as a democratization and decentralization of the origination of products. For example, a number of municipalities are undertaking efforts to issue their own bonds directly to the market and treasury groups at large corporations may be running their own bank back office based on digital assets and moving money around the world on their own blockchain rails, as it were. So, the processes and procedures of finance will definitely change. That translates to enhanced transparency, greater cost efficiencies, better balance sheet management, and, yes, a more inclusive system that is accessible to more new customers and contributors, and that leads to even greater capital formation.

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

As I see it, Deloitte’s blockchain practice needs to continue to scale and extend our enablement or our business segments. Having a siloed blockchain practice per se is less than ideal when blockchain impacts payments, asset management, capital markets, wealth management, commercial banking, retail banking, etc.. Everything in financial services is being, or will be, touched and transformed by blockchain and digital assets. So, over the next six months and beyond, we’ll evolve to embed capabilities in each of those segments with the right specialized skills and know-how to shape, lead, and deliver the future of financial services for our clients.

"Everything in financial services is being, or will be, touched and transformed by blockchain and digital assets."

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