Deloitte opens blockchain lab in New York to push for working prototypes

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Deloitte announced Thursday the opening of a laboratory in New York devoted to exploring blockchain solutions for the financial services industry.

It is the second lab dedicated to blockchain in Deloitte's growing global network of innovation hubs. The company's first blockchain lab opened in Ireland last May and more are expected to open throughout the year. The firm has 800 people in 20 countries dedicated to blockchain.

The New York lab will be staffed with more than 20 blockchain specialists, who will work with Deloitte's clients to build market-ready applications that take advantage of the technology's unique features.

Blockchain technology garnered a lot of hype throughout 2015 and 2016, as financial institutions seized eagerly on the concept of an automated shared ledger that eliminated the need for third parties to verify transactions. Large technology firms did the same. To them it holds out the promise of huge cost savings.

But that enthusiasm has so far yielded few real-world applications. In a recent Deloitte survey of executives familiar with blockchain, just 12% of respondents said that their companies had actually deployed blockchain solutions.

“With the technology not yet having reached widespread adoption, 2017 could be the make-or-break year for blockchain technology,” said Eric Piscini, a Deloitte principal who leads its digital transformation and innovation efforts in financial services, in a press release. “Companies will need to move away from churning out proofs of concept and begin producing and implementing solutions. That’s a big part of the goal with Deloitte’s blockchain lab.”

Deloitte itself has developed plenty of proofs of concept to demonstrate blockchain's potential — 35 of them in the past year alone, covering everything from digital identity and cross-border payments to loyalty programs and insurance.

But now it is time to move to the next phase, Piscini said.

"We're in the POC fatigue zone," Piscini said at the opening of the New York lab. "Now the question is, how do we move from POC to production?"

Indeed, a number of firms are trying to do just that. The same Deloitte survey that revealed little in the way of functioning blockchain applications also found that 24% of respondents said their companies plan to deploy solutions relying on the technology in the coming year.

Penny Crosman contributed reporting.