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S&P Does Not Expect Any Near-Term Impact of Blockchain Technology on Banks

Standard & Poor's (S&P) does not see blockchain technology having any near-term impact on assessments of bank stability, but the ratings agency acknowledges that it could deal a significant blow to traditional business models over the longer term. In a report seen by CNBC, S&P said that the technology has the potential to destabilize existing business models, noting the huge sums of money being invested by banks across the entire business value chain.

However, widespread market adoption beyond niches applications remains a long way off it said. As a result, they do not see blockchain as a rating driver in the near term or even perhaps in the long term. But they consider that, depending on the technology's eventual application and whether it takes hold in the financial industry, it could have a substantial impact on institutions' business models, according to the report. Nonetheless S&P is keeping a close eye on developments, saying it could consider rating changes if its widespread implementation occurs faster than currently expected, resulting in an extensive impact on financial institutions' operating models.

News Characteristics

Date : Oct 28, 2016
Region : North America
Industry : Banks
Function : Operations and IT
Sub-Function : IT Modernization/Transformation