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July 2,
2020

Deloitte's 2020 Global Blockchain Survey: From an experimental technology to a real strategic priority

In its third year, Deloitte’s Global Blockchain Survey reveals a compelling evolution of blockchain from an experimental, disruptive technology to a real strategic priority for organizations, meaning that blockchain is solidly entrenched in the strategic thinking of organizations across industries, sectors and applications.

Survey finds that leaders no longer consider the technology ground-breaking and merely promising – they now see it as integral to organizational innovation. Consequently, this indicated increased sentiment, investments, and more strategic talent sourcing and requirements for blockchain initiatives. For the first time, the survey digs into the role and evolution of digital assets. As with any business solution, there are still real-world challenges to overcome. Still in 2020, both bold and modest in-production proof points across a wide variety of implementation scenarios demonstrate that blockchain technology works – and can work – for many different organizations, businesses and industries.

Methodology: The survey polled a sample of nearly 1,500 senior executives and practitioners in 14 countries (Brazil, Canada, Germany, Hong Kong, Ireland, Israel, Mexico, Singapore, South Africa, Switzerland, the United Arab Emirates, the United Kingdom, and the United States) between February 6 and March 3, 2020.

The full report is available here.

Among the key survey findings:

• 39% of global respondents have already incorporated blockchain into production. This is a significant increase from 23% of respondents signalling production last year.
• 55% of responding organizations view blockchain as a top strategic priority, an increase from 53% in 2019 and 43% in 2018.
• Nearly 89% of those surveyed believe that digital assets will be “very” or “somewhat” important to their industries in the next three years.
• 82% percent of respondents said that they are hiring staff with blockchain expertise or plan to do so within the next 12 months, compared to 73% last year.
• 83% of respondents indicated their companies will lose competitive advantage if they don’t adopt blockchain (versus 77% in 2019).
• 70% call the pace of regulatory change for blockchain and digital asset solutions as “very” or “somewhat” fast.

 Increased advances of large-scale blockchain initiatives are occurring including blockchain-based financial infrastructure to simplify global money movement and commerce, as well as distributed ledger technology for trade finance and blockchain-enabled track-and-trace platforms, among others.

The survey report also revealed increased blockchain initiatives in daily processes including title transfer and protection, patient data storage and retrieval, and more efficient voting or food sourcing tracking.

Digital Assets Today & Tomorrow

A “digital asset” is defined as something represented in a digital form that has an intrinsic or acquired value. Aside from cryptocurrencies, examples may include everything from digital representations of land, commodities or fiat currency to tokenized debt or equity to a financial instrument, and beyond.

Digital assets therefore offer their users many benefits, which is why its no surprise that the survey respondents view them favorably with 89% saying they believe digital assets will be very or somewhat important to their industries in the next three years and will serve as an alternative to, or outright replacement for, fiat currency in the next five to 10 years. However, the survey shows no clear or specific consensus about exactly how those assets will be used or the specific role they will play.

What is more, we are witnessing new and significant changes across all facets of society with AI now being a leading contributor to that change. Businesses, and eventually customers and end-users need to learn to adapt to the latest technologies and solve the other issues that accompany assimilation of change. In other words: digital assets may be the future, however there remains an important, immediate need for organizations to become more comfortable with them, especially in terms of barriers to adoption and regulatory hurdles.

Cybersecurity

Judging by the answers about cybersecurity and overall blockchain or digital assets-related strategy, organizations might be concerned about the cybersecurity but may not fully recognize the importance of preparedness measures they should take to alleviate cyber threats. There is growing concern – not only about how to best protect valuable financial, health and other systems from being attack but also who owns and is, ultimately responsible for the information being sought. Despite blockchains inherently cryptographic character that offers high level of assurance that the foundational platform is safe from the attack and its distributed nature which suggests the expected degree of transparency, doubts still exits and organizations efforts to solve these issues remains a work in progress, meaning cybersecurity remains a problem in search of a viable solution at the moment.

Global digital identity

In many ways, global digital identity is still based on theory and likely not ready for full-scale implementation. Still, new insights into how it might potentially affect different market offerings and blockchain protocols are emerging and progress continues, as does the belief that it will be instrumental in fostering global transactions, delineating personal data ownership, streamlining regulatory requirements across jurisdictions (KYC/AML, anti-terrorist, illegal acts, related parties, etc.) and one worth pursuing. Nearly two-thirds of respondents said that a global digital identity will be very important, and having its greatest impact in global financial transactions (29%) and data privacy/ownership (27%). Eventually, this would also lead to other areas, however until the general population develops a greater understanding and acceptance of digital identity, the full benefits will likely remain untapped.

Regulatory considerations

Survey data suggests that respondents are generally confident in their ability to meet blockchain-related regulatory requirements in areas that include tax, financial reporting, industry-specific regulations, and securities laws. Even so, different governments adopt distinctly different positions on blockchain and digital assets, creating further complexity within a blockchain architecture. An absence of regulatory harmony in a blockchain and digital assets construct offers management, regulators, standard-setters, and professional service providers the chance to work together in forging common guidance and establishment of best practices. The survey therefore indicates that organizations will need to keep up and shows that 70% of survey respondents calling the pace of regulatory change very or somewhat fast.

Governance in blockchain consortia

In 2019, the Deloitte survey showed that business leaders fundamentally understand that joining a consortium could help them succeed, however they were concerned with issues related to the concept of coopetition and working toward a common goal with other organizations with which they traditionally compete. This year, this is becoming less of a roadblock with conversations evolving around how consortia are run, how decisions are made and how profits are shared across the members. This is why organizations are placing an increasing emphasis on performing due diligence and addressing key governance-related concerns before agreeing to participate in a consortium.