Businesses in global financial centers are investing in the mainframe code that underpin the bitcoin crypto currency. They hope to draw on its ability to share very large amounts of sensitive data securely and in real-time, and wipe out stages of transactions like third-party confirmation. However, blockchain is so new that financial institutions are often forced to seek engineers and developers, not from the tech giants with which they have long collaborated, but among startup companies.
In Japan, however, there are relatively few startups in a country that often ranks low for entrepreneurship. Consequently, blockchain talent is limited, and finance houses risk being left behind as global peers pass blockchain savings on consumers. Consultancy Accenture evaluates the efficiency of blockchain will cut annual costs in the financial business by more than $20 billion by 2021. The technology, for instance, could simplify the interaction between buyers, brokers and clearing houses that currently make equities trades take up to three days to settle. The expectation has provoked banks since last year to prosper, examine and even implement the technology. Fuelling the trend are startups in so-called fintech hubs such as London, New York and Toronto that provide a steady stream of experts. A scarcity of skill, however, may delay Japanese finance houses in reaching the same level of competitiveness. The insufficiency of blockchain professionals in particular is partly down to the little growth of fintech startups in Japan. Well-funded startups are crucibles in which the technology is learnt, recruiters and blockchain companies said. But Japan has produced relatively few blockchain ventures, and those that have emerged have attracted less funding than global rivals.
The world’s third-largest economy is barren ground for entrepreneurs. Last year, Japan ranked 28th for access to finance and 61st for commercial and legal infrastructure, showed data from the Global Entrepreneurship Monitor. In fintech, 167 startups are registered with Japan Venture Research, which tracks entrepreneurs in Japan. In the United States, venture capital database CB Insights counts 3,300. Other financial services providers such as Mizuho Financial Group Inc and Orix Corp have been able to explore blockchain with big-name IT firms such as Fujitsu Ltd and NTT Data Corp respectively. Inevitably, the number of blockchain experts will rise and IT firms as well as finance houses will have their pick. To help increase supply, Japan’s Blockchain Collaborative Consortium launched a series of teaching seminars on Wednesday.