A CFO Guide to Blockchain

Blockchain, blockchain and blockchain.

A technology that is being trumpeted as a technological wonder that will save the financial services industry money, make it more efficient and take it into the cloud. Sounds good.

But what is blockchain, in plain English?

Bulge bracket broker Citi has shared with Traders Magazine its newly printed CFO Guide to Blockchain where the firm breaks down the entire blockchain process and technology. The CFO Guide to Blockchain is a non-technical overview of this technology with a focus on its corporate finance implications. It aims to help senior executives identify potential tactical and strategic situations where the adoption of blockchain-related technologies may be relevant and practical.

The report describes the key features and advantages of blockchain-enabled distributed ledgers and highlights six potential areas of corporate finance that stand to benefit from its value-add proposition. The report also describes current limitations and challenges associated with widespread adoption of blockchain and concludes with a proposed CFO-tailored action plan.

Citi writes:

Blockchain systems are receiving growing interest across all major industries. Incumbents and new entrants alike are exploring a wide range of applications with the potential to create new platforms, streamline existing processes, and disrupt current business models. At its core, blockchain is a shared ledger that uses cryptographic techniques to enable verification and trust in electronic transactions. By facilitating automation and disintermediation, among other benefits, it potentially opens up a wide range of applications receiving growing interest across all major industries.

The report concludes that blockchain has the potential to streamline business processes, provide new revenue opportunities, and represents a disruptive force for some. However, there remain meaningful constraints to achieving its potential benefits. CFOs and senior executives should carefully examine the applicability of blockchain-enabled solutions and whether they provide significant improvements over existing processes.

The entire 22 page report is available from Citi directly.