A new market intelligence report by BIS Research, titled ‘Blockchain Technology in Financial Services Market - Analysis and Forecast: 2017 to 2026’, has reached the conclusion that the application of blockchain could lead to a per-year cost savings of $6-8 billion in KYC/AML, $30-40 billion in trade finance, and $50-60 billion in capital markets.
Now recognized as one of the most disruptive technologies across a number of industries, interest in the technology is identified as being driven mainly by the inefficiencies in existing technologies and processes in the industry and mistrust between parties.
While the use cases of this technology are being explored across different industries, including healthcare, real estate, media and travel, and hospitality among others, the financial institutions have been the front runners in the development of blockchain technology and have already implemented a host of successful use cases, ranging from pre-IPO trading platform released by NASDAQ to cross-border payment platform created by Ripple.
By cutting the middlemen and increasing the efficiency, blockchain is anticipated to cut the transaction and infrastructure costs by over 50% for finance companies. As such, leading financial institutions and banks, including Citibank, J.P. Morgan, Goldman Sachs and Barclays among others, have all taken the steps to deploy the technology. The push from financial monoliths coupled with the rising support from governments and central banks across countries are key factors driving the growth of the blockchain technology.
Due to the large scale investments being poured into the blockchain technology by venture capitalists, financial institutions and private equity firms, hundreds of start-ups have emerged in this space, spanning across use cases such as cross-border payments, supply chain management, trade finance, asset management, capital market post-trade solutions, identity and authentication, insurance, and lending among others.
‘Blockchain Technology in Financial Services Market - Analysis and Forecast: 2017 to 2026’ is a compilation of different peripherals of the applications and use cases of blockchain in the financial services industry.
Shazlie Khan, an Analyst at BIS Research, commented: “The blockchain technology could save the financial institutions over $40 billion per year in infrastructure, IT, operational, third party fee, and administrative personnel costs.”
The report details: key uses and benefits of blockchain technology; which asset classes blockchain technology is likely to disrupt; the phase of development for various use cases of blockchain; factors driving the adoption of the technology and which factors are expected to impede adoption; consortiums actively participating to endorse the use of blockchain; governments that are exploring, supporting and promoting the use of blockchain; key technology providers for different use cases and their business models; and the most prominent strategy such as Mergers and Acquisitions, Partnerships, and Product Launch among financial institutions for leveraging the technology.