The Myth of Easy Interoperability

December 2017


Maintaining data quality, reconciling trades, and exchanging assets between financial institutions using legacy information technology (IT) systems is expensive, slow and complex. Given the costs of integration and interoperability, this paper argues that distributed ledger technology product competition at the application level is more critical than competition at the platform level. By building an ecosystem on top of a platform, financial institutions can benefit from network effects and address historical IT complications.