In the long history of humankind, those who learned to collaborate and improvise most effectively have prevailed.
Darwin’s point holds true. Critical mass, momentum and co-operation are absolutely essential if we are to transform financial services and the communications and transactional framework we rely on.
This was our rationale for bringing banks together to jointly develop distributed ledger technology for the financial services industry from day one.
In R3 we have created a fast moving financial technology product company with an ownership structure which provides a balanced governance, combined with the leadership and stewardship of the best technologists in their respective fields.
The spaghetti junction of shared legacy infrastructure as well as individual front, middle and back office systems is testament to the resulting mess when banks disappear into development silos.
The overall cost of maintaining this legacy infrastructure is incalculable and there is risk around every corner, embedded into the old Cobol and Fortran code under the layers of many of those systems.
That is why we came together with an initial group of nine banks in September 2015 to create R3. A highly experienced and effective technology team was assembled and ready for action two months later.
Fast forward a year and there are now over 75 members of the R3 group – with two additions in the last week alone – working together on a diverse array of projects and developing technology to address some of the most serious pain points affecting the industry.
There is no secret. We hired the best, assembled and activated a powerful and engaged membership base and connected them together to leverage the network effect distributed ledger technology delivers.
Together, we have designed, built and launched Corda, the open-source release distributed ledger platform which will set the standard for this technology in global financial markets.
This is the only platform designed by and for its users and represents the world’s largest collaborative distributed ledger effort in financial services. It is unique and it is a landmark moment for the market.
Distributed ledger technology will have such phenomenally powerful network effects that it is hard to imagine serious institutions deploying base-layer ledger software that is anything other than fully and wholeheartedly open.
The response and engagement with Corda has been exceptional and only a few weeks after open sourcing the platform we have already had a vast number of contributions from the public developer community.
Amidst the excitement of the Corda roll-out, it’s hard to ignore the running commentary on the progress of our fundraising programme.
The motivation and accuracy behind some of the noise has sometimes been questionable, but such is the nature of working on such high-profile projects. It’s a complement to be discussed and we are very happy with constructive criticism, but better when the discussion is informed and accurate.
We have always expected the make-up of the consortium to change over time – our member base is so large and so diverse, it would be unrealistic not to expect some institutions’ priorities, resources and focus to travel in different directions.
We have new members joining the project all the time and some banks may choose to change the way in which they engage with us as we move forward, but the critical mass we have built over the last year means members can be confident they are investing in developing industry standard solutions that will be the building blocks of the new financial services infrastructure.
The financial institutions that have shown the vision to join R3 are by that very action ensuring the technology we adopt is built using common code and protocols, ensuring seamless interoperability and integration.
This is a direct hedge against the risk of replicating the disjointed infrastructure financial markets are forced to operate on today.
We remain focused on perfecting Corda and looking ahead to our objectives and deliverables for 2017 working together with our members.
We are on the cusp of a new era in financial technology, and over the next year banks will begin to reap the benefits that have been promised to them since the financial services industry recognized this technology’s potential to deliver efficiency, lower risk, security and cost reductions.
Let’s be clear: the power of distributed ledger technology lies in its network effect – and that goes for the build as much as the usage. The past few years were characterized by blockchain hype. Leveraging the combined power and expertise of our diverse and growing group of members, R3 will make 2017 the year of blockchain delivery.