KPMG and CB Insights have released a new report that examines key global trends with particular focus on FinTech and blockchain technology.

The Pulse of Fintech report noted that the interest in blockchain technologies grew significantly last year, with VC investment in particular growing from $298 million in 2014 to almost $460 million in 2015. Several companies and big banks have undertaken blockchain research to leverage the technology in order to improve their operations.

However, the report aptly questions – “Does the potential live up to the hype?” It says that although blockchain’s potential is interesting, there are substantial barriers that must be overcome for its successful implementation in banking and capital markets, adding that regulatory and market changes, in particular, could hamper blockchain’s use on a global scale.

Analysts suggest that excessive investor expectations have burdened the technology, perhaps to the extent that it cannot realistically be fulfilled. It’s a possibility that investors seeking immediate, short-term success may be disappointed.

“The technology is not a silver bullet that can solve every problem tomorrow. To get the most value from blockchain, corporate investors need to be less hopeful and more pragmatic”.

The corporate investors should encourage industry-focused engineers to define the problems blockchain can help resolve, find the best and most cost effective technology solutions and work through limitations to scope, scalability, velocity and usability.

The report identifies an area where the technology offering may be of particular benefit in the short term – digital identity or digital financial passport. It said that improvements in this area could facilitate better choice and portability of customers between financial institutions and ultimately higher customer satisfaction as individuals are able to take control over and gain benefit from their own identity.

Citing various efforts by leading banks, the report says that the move to test and experiment with distributed ledger technologies is well underway in financial services. However, it emphasized that at present the technology is evolving, and is suitable for experimentation, not for wholesale technology implementation.

“More widespread implementation at this stage could have serious financial consequences should the technology not live up to expectations”, it added. “The ability for blockchain to become a true game changer is still in progress. Investors need to look beyond the hype and ensure that any technology solution is underpinned by exceptional engineering, a full understanding of the barriers, and clear economics on the cost and benefits associated with the technology.”