Evolution or Revolution? Distributed Ledger Technologies in Financial Services

This paper is an examination of adoption of distributed ledgers in financial services. We review more than one hundred initiatives and a large practitioner literature, considering fourteen areas of application and seven case studies, in order to provide both a conceptual analysis of these technologies and to review their current and prospective adoption in financial services. There are several component technologies applied in distributed ledger, many offering substantial commercial and operational benefits even applied outside of a distributed ledger and best viewed as part of the broader picture of ongoing digitalization of financial services using various data technologies. Our findings suggest that decision makers can take a pragmatic approach to distributed ledgers, not be concerned about this technology upending their business but be open to cross industry co-operation where this is strategically justified and to then adopt what works to improve outcomes for customers and other stakeholders. Overall, distributed ledgers and crypto assets, are really a distraction from the wider and more important issues of ongoing digitisation and automation of financial services. Data sharing and cross industry co-operation – as well as well as enlightened public policy to promote adoption of new technologies, competition and prudential and systemic safety – are crucial to this digital revolution. This does not depend on widespread adoption of distributed ledgers.