How can blockchain-based technologies disrupt the investment banking industry?

Details

Supervisors

Lejeune, Christophe

Faculty

Louvain School of Management

Degree label

Master [120] en ingénieur de gestion

Abstract

The rise of innovative technologies has altered consumer’s behaviours and led to a shift in their demands and expectations of the financial system. As a result, traditional banks feel compelled to invest in new technologies such as blockchain. At the same time, such a transformation necessitates a revision of their strategy regarding trust especially in the aftermath of the 2008 financial crisis. Blockchain essentially refers to a cryptographic ledger consisting of a digital log of transactions that are shared across various networks, whether public or private. Blockchain technology is not only considered to have the intrinsic potential to reshape the banking sector, but also has several other implications for the businesses operating within the capital markets industry. These range from efficiency to risk management and reduction of costs. Despite the potential advantages offered by blockchain, there are still challenges associated with the technology itself as well as its legal and operational implications specific to current banking operations. The extent to which blockchain disrupts the financial industry is still contested. While it is viewed as a foundational technology that has the potential to reshape economic and social systems, it is also argued that a complete disruption of the industry is not likely to happen in the near future.