Despite being tipped to become a revolutionary technology in the insurance industry, Blockchain is unlikely to be approved by the FCA in the near future.
Experts in the insurance industry, including Abizer Rangwala, MD of Accenture’s insurance IT strategy, have claimed that Blockchain – the digital asset and payment system behind bitcoin – has major advantages for insurers. The technology is said to provide high levels of security thanks to its distributed database. Transactions are said to be transparent, and dealings are performed quickly and inexpensively - with the history of contracts or deals recorded.
However, Christopher Woolard, director of strategy and competition at Britain’s financial watchdog the FCA, has advised that many consumer and regulatory barriers need to be addressed before any further headway can be made.
"The current development of distributed ledger technology has the potential to revolutionise financial services; whether it is the panacea of all ills in the financial world is yet to be seen," Woolard said.
"The FCA continues to monitor the development of this technology but is yet to take a stance until its application is clearer.”
Rangwala claims that while Blockchain technology is already being used widely in retail and banking, the insurance sector is only beginning to look at its commercial applications.