Deloitte unveils plan to build blockchain-based digital bank

28 June 2016 4 min. read

Deloitte and ConsenSys Enterprise have announced the formation of a partnership, aimed at strengthening their respective blockchain proposition to clients. The promise of the technology, as well as the potential for disruption, have seen considerable interest from professional services firms in recent years – although challenges remain.

The promise of blockchain technologies have reach the status of hype, traversing the global news media, sometimes faster than the time it takes to ‘commit’ a single bitcoin transaction. While the technology provides a range of potential benefits, including transparency and tamper proof security through a single decentralised public transaction ledger, the current model for many blockchains, including bitcoin, have considerable scalability issues – the amount of electricity required to perform a single bitcoin transaction at current scale, around 1/10,000th the transaction volume of VISA, is equivalent to an average US household for a day, while around only three transactions per second are possible.

The global hype, as well as the promise of the technology to streamline global transactions in a number of fields, including payments, through digital asset transactions, and smart contract, has seen large consulting firms found new practices and enter into partnerships. The aim is to support clients in a range of industries, from professional services to financial services, with a means of creating transaction systems that are reliable, safe and efficient. As research institutions, like Cornell University’s bid to create a scalable blockchain, as well as FinTech startups and incumbent institutions that seek to develop the innovations that disrupts a trillion dollar industry – professional services firms cannot afford not to be there to support the eventual winner, assuming the technical hurdles are scalable.

Deloitte unveils plan to build blockchain-based digital bank

ConsenSys Enterprise and Deloitte

Deloitte recently announced that it too has entered a new proposition into the field, joining forces with ConsenSys Enterprise* to launch a new suite of digital banking solutions for the financial services industry, supported by blockchain. The consultancy firm has been intensively working with blockchain since 2014, when it launched its Rubix practice in Canada.

The new collaboration will leverage Deloitte’s client network, including 30 of the world’s largest banks, and ConsenSys’ Ethereum** based blockchain technology and subject expertise. The combination will provide banks, and other interested parties, with a means to “re-imagine the core banking environment”, through access to blockchain propositions that revolutionise the traditional financial products and services, including lending and savings. The two firms will also work together to innovate new blockchain propositions across various fields, including asset management and collateral management, combining blockchain with the IoT, as well as developing wider applications for the financial services industry.

“Deloitte is treating digital transformation and innovation in financial services as a global priority and distributed systems technology is proving its potential for us and our clients,” says Thomas Jankovich, Innovation Leader for Financial Services at Deloitte Consulting. “Having previously designed and built digital banking propositions entirely around customers, we understand the importance of service architectures and organisational capabilities needing to be strong, flexible and nimble and blockchain checks all the boxes.”

Kishore Atreya, Head of Consulting and Digital Banking at ConsenSys Enterprise, says the firm “looks forward to this collaboration with Deloitte.” Atreya further states “This provides an opportunity to bring together our ongoing blockchain efforts in digital identity (uPort), triple entry accounting (Balanc3), financial products (e.g. lending, bond market, escrow) and deliver customer centric solutions in financial services.”

* ConsenSys Enterprise was founded in 2014. The New York based company develops blockchain applications for the emerging Ethereum ecosystem.

** Ethereum is decentralised platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference.