Dear,
Last year, we discussed about the opportunities of the Blockchain technology.
https://www.linkedin.com/pulse/bitcoin-sap-banking-ferran-frances?trk=mp-reader-card
https://www.linkedin.com/pulse/dynamic-collateral-management-sap-bank-analyzer-ferran-frances?trk=mp-reader-card
Several systemic banks, including UBS, Deutsche Bank, Santander, BNY Mellon, the market operator ICAP and the technology company Clearmatics have partnered in the development of the new "Utility Settlement Coin".
The "Utility Settlement Coin" is a digital currency, supported by the Blockchain technology, backed by financial assets deposited in central banks.
The liquidity of the assets backing the USC should help in reducing the volatility and incentive the adoption of the new currency.
Using Blockchain technologies, instead of clearing houses and traditional banking settlement networks, presents two advantages:
- Reduction of settlement time from days to minutes.
- Reduction of settlement costs. Some studies estimate that the adoption of Blockchain technology for banking settlements will produce costs reduction of $20 Billion a Year.
With this incentives, it's obvious that will see soon many other initiatives incentivizing the use of Blockchain distributed ledgers.
But the advantages of the Blockchain will not come by doing the same things cheaper and faster, the advantages of the Blockchain will come by doing new things that we can't do today.
The impact of the Internet in the two legs of the value chain has been unbalanced in the last two decades. While the leg of the supply of goods services from the vendor to the client has experienced revolutionary changes, the leg of the transfer of value and payment from the client to the vendor, is still in the pre-internet era.
Corporates have replaced legacy Information Systems with ERP's (mainly SAP), improving dramatically the transparency, efficiency and traceability of their Supply Chains,
Companies collaborate in integrated Supply Chains, with Subcontracting and Work Order Collaboration or Vendor Managed Inventory scenarios, but they have to clear the payments for this goods and services with Financial Services provided by banks which are still relying in outdated legacy systems, and inefficient clearing and payment networks.
Blockchain technology provides the foundation of the Internet of Value, which is going to drive dramatic changes on the way in which companies, clients, vendors and intermediaries interact in the Value Chain.
Revolutionary Financial Services are going to appear in the new years; Dynamic Collateral Management, Optimized Margin Management supported by smart-contracts in smart distributed ledgers like Ethereum, even new services that we can't imagine today.
But the question remains; is it possible to implement these services on outdated information systems?
I don't think so.
These services will require Simplified Information Systems, collaborating in value networks, with the Information Systems of their counter-parties.
SAP has simplification technologies like HANA, and deep knowledge of the best practices for running Supply Chains, that we will have to integrate with the new Internet of Value.
Considering these assets; does SAP have the opportunity to leader this transformation, as it has leadered the transformation of the Supply Chains?
I'm convinced it does, and I hope we will comment it together in this blog.
Looking forward to read your opinions.
Join the SAP Banking Group at: http://www.linkedin.com/e/gis/92860
K. Regards,
Ferran.
Last year, we discussed about the opportunities of the Blockchain technology.
https://www.linkedin.com/pulse/bitcoin-sap-banking-ferran-frances?trk=mp-reader-card
https://www.linkedin.com/pulse/dynamic-collateral-management-sap-bank-analyzer-ferran-frances?trk=mp-reader-card
Several systemic banks, including UBS, Deutsche Bank, Santander, BNY Mellon, the market operator ICAP and the technology company Clearmatics have partnered in the development of the new "Utility Settlement Coin".
The "Utility Settlement Coin" is a digital currency, supported by the Blockchain technology, backed by financial assets deposited in central banks.
The liquidity of the assets backing the USC should help in reducing the volatility and incentive the adoption of the new currency.
Using Blockchain technologies, instead of clearing houses and traditional banking settlement networks, presents two advantages:
- Reduction of settlement time from days to minutes.
- Reduction of settlement costs. Some studies estimate that the adoption of Blockchain technology for banking settlements will produce costs reduction of $20 Billion a Year.
With this incentives, it's obvious that will see soon many other initiatives incentivizing the use of Blockchain distributed ledgers.
But the advantages of the Blockchain will not come by doing the same things cheaper and faster, the advantages of the Blockchain will come by doing new things that we can't do today.
The impact of the Internet in the two legs of the value chain has been unbalanced in the last two decades. While the leg of the supply of goods services from the vendor to the client has experienced revolutionary changes, the leg of the transfer of value and payment from the client to the vendor, is still in the pre-internet era.
Corporates have replaced legacy Information Systems with ERP's (mainly SAP), improving dramatically the transparency, efficiency and traceability of their Supply Chains,
Companies collaborate in integrated Supply Chains, with Subcontracting and Work Order Collaboration or Vendor Managed Inventory scenarios, but they have to clear the payments for this goods and services with Financial Services provided by banks which are still relying in outdated legacy systems, and inefficient clearing and payment networks.
Blockchain technology provides the foundation of the Internet of Value, which is going to drive dramatic changes on the way in which companies, clients, vendors and intermediaries interact in the Value Chain.
Revolutionary Financial Services are going to appear in the new years; Dynamic Collateral Management, Optimized Margin Management supported by smart-contracts in smart distributed ledgers like Ethereum, even new services that we can't imagine today.
But the question remains; is it possible to implement these services on outdated information systems?
I don't think so.
These services will require Simplified Information Systems, collaborating in value networks, with the Information Systems of their counter-parties.
SAP has simplification technologies like HANA, and deep knowledge of the best practices for running Supply Chains, that we will have to integrate with the new Internet of Value.
Considering these assets; does SAP have the opportunity to leader this transformation, as it has leadered the transformation of the Supply Chains?
I'm convinced it does, and I hope we will comment it together in this blog.
Looking forward to read your opinions.
Join the SAP Banking Group at: http://www.linkedin.com/e/gis/92860
K. Regards,
Ferran.
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