Research Says Blockchain Adoption Will Save Banks $27 Billion Yearly By 2030August 10, 2018
Market intelligence company Juniper Research conducted a study in the world of the blockchain. The study emphasized that through deploying blockchain technology financial institutions is helpful to generate savings that amount over US$27 billion on the cross-border settlement transactions before the 2030 ends. From the basis of on-chain transactions, the cost will be decreased over 11%.
The best about it is that it will reduce the cost of reconciliation, payments processing, and compliance, banking as well as treasury operations. Based on the Juniper Research report entitled: The Future of Blockchain: Key Vertical Opportunities & Deployment Strategies 2018 to 2030, other places will experience cost reductions like compliance and treasury operations.
On the other hand, several banking departments will generate greater savings compared to others. When it comes to compliance, the automation of money-laundering checks of the deploying blockchain can be the reason of cost reductions over 50% in just a couple of years. Furthermore, the market intelligence company warned that legacy systems would firstly operate parallel to the blockchain-based services and the cost reductions will not be quick. Instead, it will take more years to materialize.
The projects of Juniper Research that cost savings will not reach an annual figure of US$1 billion until the year 2024 comes. The report also explained that aside from banking, several industries can also benefit from the efficiency improvement as the result of the blockchain deployment. These industries include the food export trade wherein the costs are related to fraud are expected to be reduced by about half within 12 years.
Juniper Research’s report also accords with the projection by the global information provider IHS Markit that blockchain business value will augment from US$2.5 billion in 2017 and reach a figure of about US$2 trillion in 2030. Furthermore, IHS Markit emphasized that the financial sector will be one of the big beneficiaries of the transformative potential of the blockchain technology.
IHS Markit observed that apart from cross-border settlement transactions, other areas in the financial world that will benefit from distributed ledger technology are assets custody, collateral management, claims management, derivatives, corporate actions processing and share trading. The blockchain business value will be big since there are huge sizes of the financial sub-sectors.
Example of this is the market capitalization of the world’s stock markets is equivalent to $73 trillion. In fact, efficiency gains and small cost savings can turn to important business value for industries and companies.