All that aside, blockchain has valuable uses inside the complex world of financial services and there has been a flurry of talk about how banks and other institutions are seeking to use this technolology. However, problems can arise when people try to wrap their heads around what the technology actually is. This point was illustrated at a recent conference organised by this news service in New York when an audience member asked panellists: “What the hell is blockchain?” It turned out that this individual was in a senior position at a financial institution, so chances are if he was unfamiliar with blockchain, then so are many others lower down in the financial food chain.

Blockchain is best described as a public digital ledger. Unlike a book packed with dodgy dealings that a crooked car dealer might keep stashed in a safe somewhere, it records publicly-visible transactions across a network of computers rendered tamper-proof by advanced cryptography. Think of the blocks as packets containing money, goods or property and the chain as the indelible and transparent record that the block has been passed on to someone else. What is perhaps ironic is that so many associate blockchain with anonymity, but in reality, any transaction carried out using the technology is recorded and distributed on a public ledger for anyone to see.

In recent months, there has been a flurry of financial institutions - particularly banking behemoths, such as ABN AMRO and OCBC - investing in blockchain as they want to work out the most efficient way to use the technology. Consortiums comprised of key players have been established and financial watchdogs have even climbed onboard the blockchain bandwagon to help iron out the regulatory creases.

Although banks' intentions of how they plan to use blockchain is relatively clear, a fog begins to descend when we examine the ways in which the technology could impact the wealth management industry. In order to shed some light on the potential applications of blockchain, this publication spoke to Kendra Thompson, who leads and are afraid to ask; don't want to understand it and don't have the appetite; or simply think they don't have time because their business is undergoing so many other changes,” she said.

At this point in time, what the wealth management industry is seeing is only the tip of the iceberg. Thompson thinks it will be at least five years before blockchain becomes “business as usual” and is widely adopted by the industry. 

With this being said, she warned: “Nobody should be comfortable with blockchain technology yet. We are in an area of building and experimentation and first instance. Even those of us on the front line are learning every day and the sand is constantly shifting.”

Despite the technology still being in its infancy, Thompson urged key players to put themselves at the forefront of the revolution, before it is too late. “It's not ready for prime time but that should not stop firms from participating. Industry leaders who understand the risk and benefits should participate in shaping the future of the technology – don't wait for the outsiders to tell us how to use blockchain to benefit our businesses.”