TMG, CO-OP Financial Services and Mercator Advisory Group, three leading players in payments industry, have announced latest updates on their collective effort to create clarity around the potential for blockchain technology in the community financial institution industry.

Last month, CO-OP Financial Services and TMG commissioned a body of work by Mercator Advisory Group on blockchain technology to help credit unions make wise decisions regarding this emerging digital ledger technology.

The companies have announced that they have developed and started testing a strategic decision framework for blockchain – something they found does not currently exist. The tool eventually will serve as an “evaluation template” for financial institutions exploring use cases for the digital ledger technology.

“The goal is to create a simple matrix capable of helping financial institution leaders evaluate a wide range of business problems and blockchain platforms,” said TMG CEO Shazia Manus. “We are currently testing the decision framework, using it to evaluate three specific business problems against two specific blockchain platforms.”

Stan Hollen, President/CEO of CO-OP, explained that the decision framework will provide guidance on how to identify business problems that the technology can address.

Mercator Vice President of Payments Innovation Tim Sloane pointed out three steps that are required to identify business problems that may benefit from blockchain technology:

• First, the problem must be defined in terms specific to how it might operate on the blockchain.
   
• Second, the current value chain must be examined to see if blockchain deployment is likely to be accepted by existing business partners.
   
• Third, the scope must be expanded to include relevant risk and regulatory considerations.

Hollen added that the framework will encourage the development of a process that resembles the acquisition of a database or software development service.

“Our expectation is that this model will help both technology suppliers and technology buyers by speeding up the acquisition process,” Hollen said. “We look forward to continuing to make important blockchain resources available to credit unions through this partnership.”