We met Coty de Monteverde, Blockchain Centre of Excellence Director at Santander Digital, at the 2019 ICSA Annual Conference in London, where she discussed the impact of blockchain in AGMs alongside Wayne Cowan, Vice President Proxy Services, Santander Investment. In 2018, Santander became the first company in the world to use blockchain to make it easier for investors to vote at an annual meeting.
Coty has over 10 years of experience in banking, in the Corporate Innovation Area and the Technology & Operations (T&O) Division at Santander Group. Prior to that, she was Strategy and Operations Business Consultant for the Telecommunications, Media and Technology department at Deloitte Consulting.
What's your background with blockchain technology?
I first heard about Bitcoin from my previous boss (Santander’s Head of R&D) in late 2013, right after joining their Innovation team. He saw the potential for the application of Distributed Ledger Technology to the bank’s products and processes way before there was any interest from the industry to even understand it. He managed then to set up Santander Blockchain Lab in 2016. It wasn’t until this time that I got really into the technology and as a Telecommunications Engineer, I quickly became enthusiastic about it and an expert on the subject. I recently took over the leadership of the team and evolved the lab to the Blockchain Center of Excellence, with focus on moving the technology to production.
What do you think are the barriers to blockchain technology adoption?
I see two main factors that are delaying its adoption. First, there are still some issues (on its way of being solved) to make blockchain appropriate for certain enterprise use cases, such as privacy of transaction data, network governance, interoperability, and secret key management, among others. The second one is the distrust exhibited by some parties regarding certain risks and legal issues that could potentially disrupt the way they have been doing things until now.
What can banks do to adopt the technology quicker?
Almost every large bank has already tested and piloted blockchain technology internally, with some of the most forward-thinking institutions moving their first applications to production. However, the technology is not mature yet, but close to it as there is strong demand and commitment, and work is already under way to resolve these issues. Coopetition is key for blockchain technology success. It implies cooperation on the creation of standards and the implementation of the underlying shared ledgers to allow businesses to compete using high-level applications that can be built on top of this underlying platform. In this sense, I believe that banks should strengthen the collaboration between each other around this technology and by doing so, they will accelerate its maturity, and they will be able to overcome standardization and regulatory barriers as well as drive mass adoption and achieve the network effect.
What benefits can blockchain technology bring to the financial services industry in both the short and long term?
Blockchain is providing a new way of recording the ownership of assets and a new way of operating with them, in a secure and trustless manner. It also has the potential to automate and simplify those complex processes in which several parties participate with different interests.
In the short term, I see the use of blockchain technology for specific products/services, one by one. It seems to me there will be different networks depending on the use case, and some of them would need to be interoperable. Even so, it will definitely bring a lot of advantages to both banks and their customers in the short term:
By automating processes
Providing instantaneity, and therefore providing a better user experience
Improving liquidity management
Lowering costs, etc.
In the years ahead, we will move from a system of many banks with many ledgers (with all the associated reconciliation, central clearing parties, auditing, etc.) to a simpler system of many banks but fewer ledgers where reconciliation is automatic. We may need fewer intermediaries, and regulators may have a real-time view of the positions and risks across the industry.
According to your experience in banking, are there any specific functions or departments that could benefit from a more forward thinking perspective on technology in the financial services industry?
It seems like many businesses that touch payments may benefit from blockchain, followed probably by financing (whether it is SME lending, debt instruments or supply chain finance).
Where do you see blockchain being used most in the next few years?
Regarding the financial industry, I believe that this technology would be used the most for payments and identity, as they are both present in the majority of financial transactions,
Talking about other sectors, I would emphasize the huge impact it could have on the collaborative economy and the internet of things, by enabling disintermediation and the machine-to-machine economy.