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What Astronauts and Successful Cryptonauts Have in Common

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8 September 2021
Alenka Grealish
“There are people who make things happen,
there are people who watch things happen,
and there are people who wonder what happened.
To be successful, you need to be a person who makes things happen.”
Jim Lovell, Astronaut

What astronauts and successful cryptonauts have in common is that they avoid being starry-eyed on one hand and myopic on the other. Implementing crypto technology requires the vision, patience, perseverance, and collaboration of a SpaceX mission team. Excelling in crypto technology requires the fortitude and confidence of Elon Musk.

How can financial institutions achieve intergalactic travel between the legacy galaxy and the crypto galaxy? There are two overarching key success factors. First, success requires out of the box thinking.For most bank executives, blockchain, smart contracts and digital assets are still a new tech frontier which requires them to envision new business models and accept disruption of the status quo.

Second, success requires breaking the sound barrier between pilot and production. Crypto technology implementation is naturally gradual, beginning with test missions before advancing to more ambitious missions. While most large banks are exploring blockchain/DLT, it is a leap to move from PoC to pilot and a bigger leap to production. PoC to pilot means that the bank is no longer in the sandbox and is touching legacy systems. Internal collaboration becomes paramount. Regulators start asking questions. The banks that have made the leap to production will state frankly that it is hard and requires a budget that is often 10 times or greater that of the PoC with much of the cost coming from meeting security and compliance requirements and integrating to legacy systems. They will add that the leap is worth it if viability appears promising.

To avoid being starry-eyed, bankers should not consider crypto technology in isolation. Given the extent to which paper and redundant data entry still permeate bank processes, digitization involves a combination of mature technologies—such as robotic process automation (RPA), optical character recognition (OCR), APIs, and advanced technologies including machine learning and blockchain.

The next 5 years are make or break for the cryptonauts. Over the next five years, adoption of crypto tech and participation in blockchain networks by FIs and end users will determine economic viability. If networks can scale and leverage smart contracts and digital assets, they have the potential to radically transform workflows and contracts as well as data creation, exchange, and usage.

For further discussion, see my Celent report, Mapping the Crypto Galaxy Part 1: Transaction Banking and Payments, in which I examine the use of crypto technology to build better rails for retail and wholesale payments. These innovative new rails are delivering strong value propositions across payments messaging, clearing, and settlement and equally important, liquidity management. I also spotlight eleven cryptonauts, that is, vanguard players in the crypto galaxy focused on transaction banking and payments: Adhara, ConsenSys, Fnality, J.P. Morgan, M10, Quartz, R3, Ripple, Stellar, Velo, and Visa.

Insight details

Industry
Corporate Banking, Retail Banking
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Banking, >>Retail & Business Banking, >>Corporate Banking
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Blogs
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Asia-Pacific, EMEA, LATAM, North America