CO-OP Financial Services and TMG have commissioned Mercator Advisory Services to study blockchain technology in order to help credit unions decide about using this digital ledger system that provides a distributed list of records including transactional data and sequence.
The companies want to support credit unions by creating clarity about blockchain technology and providing them with the necessary research to determine if there is a way to move forward with the technology, executives of CO-OP and TMG said in a joint press release Tuesday. Toward these ends, they have asked Mercator to survey the current blockchain landscape in an effort to create a strategic decision framework for evaluating it and other technologies.
CO-OP and TMG said they see the value in transparency and security in blockchain technology to credit unions, but given the complex systems and environments they operate in, the integration architecture of blockchain may be a major stumbling block for broad adoption.
The companies cite a paper written by Tim Sloane, vice president of payments innovation at Mercator, in which he noted that a 45-bank consortium decided that blockchain technology "is not capable of addressing the complex use cases associated with regulated entities. This revelation should cause others to take a large step back from evaluating technology and instead invest time in determining and understanding the business problem to be solved or perhaps the value chain participants the solution is likely to displace."
The study will be completed by late summer for credit unions to use when planning their 2017 budgets. CO-OP and TMG will share the results with their clients.
