An invention of the futuristic digital currency Bitcoin is infiltrating the banking system.
Bitcoin, conceived as an alternative currency, is outside of the mainstream. But traditional banks are interested in its record-keeping mechanism, a distributed ledger system based on blockchain technology. Each transaction is automatically recorded in a “block” of information that becomes part of a public data chain, rather than adjusted individually on each bank’s account.
Transactions are recorded much more quickly, reducing risk and expense, with the potential to shrink the $100 billion banks spend annually on legacy systems and technology to record transactions the old-fashioned way. R3 has formed a consortium of banks and other financial institutions looking to co-opt the distributed ledger concept for themselves and the banking world at large.
R3 managing director Charley Cooper believes distributed ledger "will have as big an impact on financial services and banking as the internet has had on entertainment."
R3 is just one of the disruptors covered in a new film, print and event series from KPMG and Forbes, “The Great Rewrite,” that takes a closer look at how systemic changes are transforming the way we do business. For more on the Great Rewrite of the financial services industry, visit https://home.kpmg.com/us/en/home/insights/2017/03/the-great-rewrite.html.