A view of the Goldman Sachs building in Jersey City from Battery Park. Photo: Shutterstock
For Goldman Sachs, the most important aspect of the blockchain is its influence—in driving both awareness of new technological approaches while leading the conversation and forcing the issue.
The topic of blockchain came up during a GS podcast featuring the bank’s co-head of technology, Don Duet, titled “The Digitization of Finance.”
Duet explains the popularly held notion of applying a blockchain-style approach—a cryptographic, shared database—to bank back office infrastructure:
The ability to have a technological solution that enables multiple counterparts to see and enact upon the same understanding of truth on an asset transfer in a way that’s immutable, that’s protected, that uses cryptology to make sure that you can’t go back and change something inappropriately creates a new way to envision the way that we do many parts of the financial industry.
The idea is that such an approach could make the process more efficient, saving both money and time.
Of course, as the DTCC white paper published yesterday points out, it’s unclear why the same couldn’t be achieved with a centralized solution.
To Duet’s credit, he’s presenting more of an introductory overview of the current line of thinking surrounding blockchains and banks.
Plus, for Duet, what’s important isn’t the blockchain approach, per se. It’s the fact that all of this blockchain hype is sparking a much needed discussion around creating smarter technological solutions for financial institutions:
You could ask the question, ‘Why couldn’t this have been designed before?’ And that’s a very valid question. What I find personally very exciting about this is just the awareness that is happening within the financial community that there is a technological answer that can drive change and improve our system.