my recent working paperA study conducted in collaboration with the Singapore Management University found that over 40% of surveyed professionals expect there to be very high or very high adoption of decentralized finance (DeFi) by 2034. , which represents a significant change from today’s environment, where implementation exists only in limited experiments.
To understand the future impact of DeFi, I surveyed 109 experts, including traditional finance experts, DeFi industry practitioners, and DeFi-focused academic researchers.
The findings suggest that the most likely scenario is a collaborative future where financial institutions embrace DeFi rather than completely disrupting traditional finance. According to the survey results, 66% of experts believe that traditional finance will integrate DeFi.
Risk management, data analytics, and operations will need the most adaptation due to DeFi, with approximately 80% of respondents expecting significant changes to these business areas and processes.
DeFI challenges
However, the study also identified several challenges to DeFi adoption. Security stands out as the top concern, with 91% of professionals identifying it as a key issue. Data management and privacy, as well as regulatory compliance, are also important issues that need to be closely addressed.
Experts also highlight the growing need for new competencies in the financial services industry. By 2034, strategic competencies related to DeFi are expected to become important, with approximately 84% of professionals rating DeFi as important or very important, up from approximately 60% today. I’m doing it.
One of the interesting findings from the survey showed that professionals with more than 20 years of experience expressed more optimism about the potential impact of DeFi than those with less experience. Masu. This suggests that experienced experts who have witnessed previous technological changes in finance see strong potential for DeFi to act as an agent of change.
Expert opinions point to an evolving financial landscape where DeFi will become an integral part of the financial industry, rather than replacing traditional processes and technologies. In addition to strategic capabilities, financial institutions will need to invest in developing DeFi sector-specific technical capabilities to remain competitive.
Based on these findings, it seems prudent for financial institutions to start preparing for a future where DeFi capabilities will be essential to staying competitive in the financial services industry. Those who adapt early and thoughtfully may be better positioned to thrive in the evolving financial ecosystem of 2034.
I teach executive courses for professionals looking to improve their DeFi literacy.Decentralized Finance (DeFi): A new financial ecosystem,” will be held at the SMU Academy, providing a comprehensive introduction to the emerging field.
Featured image credit: freepic
