Royal Bank of Canada President and CEO David McKay said he understands the potential benefits of blockchain and believes the technology can help banks collect data they need to successfully serve clients.
The shared ledger technology blockchain can gather client data that has been spread across the financial services industry, McKay said Oct. 16 during the Sibos conference in Toronto. He added that the data has become increasingly fragmented because customers are using different financial outlets now that a host of technology players have entered into the payments space during the last 10 years. Banks need to aggregate the client data to better understand the services that customers want, McKay said.
"Blockchain could have an important role to play and could be the technology that transforms money moving and money storing," he said.
McKay said blockchain technology is still in its infancy, and he understands that legal, regulatory and security questions remain. However, he said RBC is excited about blockchain's potential to decentralize record-keeping and remove third parties, which can reduce friction from the financial system and lower costs.
RBC is experimenting with blockchain in a number of businesses such as personal banking, commercial and capital markets. McKay said RBC is also exploring using blockchain for a loyalty program, and his company will pursue other blockchain efforts.
"We're watching the performance of all our blockchain pilots very carefully," he said.