Study: Banks to save $27 billion per year with blockchain

06 Aug, 2018
by Will Heasman
Study: Banks to save $27 billion per year with blockchain

A recent study undertaken by Juniper Research, a market intelligence firm has suggested that adoption of Blockchain within banks and other such financial institutes could save them over $27 billion (USD) per year.

The savings, the study alleges, will come mostly from cross-border settlement transactions. Use of blockchain on upon these cross-border remittance services will reduce costs by 11% come 2030.

According to the study, entitled: “The Future of Blockchain: Key Vertical Opportunities & Deployment Strategies 2018-2030” bank adoption of blockchain will see reduced costs in areas such as payment processing and reconciliation as well as treasury operations and compliance. The main savings within compliance areas include the automation of identity checks and anti-money laundering screenings utilizing blockchain capabilities to verify the identity of an individual, alleging saving up to 50% in existing costs within a few years.

However, study caveats that banks that wish to utilize blockchain alongside existing legacy systems wouldn’t see realized profits until several years after deployment, with annual cost reductions not reaching $1 billion per annum until 2024.

The research also highlighted the food industry as a potential benefactor of blockchain; with the cost of fraud within the food export trade being reduced by nearly 50% in 12 years. The study also predicted reduced fees for home buyers.

Interestingly, according to the research, IBM stood out as a leader in blockchain innovation. The study based its findings on the qualitative assessment of product offerings, R&D activities, and future potential, each of which IBM stood out as a front-runner. Research author Dr. Windsor Holden spoke of the result:

 “IBM continues to demonstrate innovation and leadership across a range of verticals. Over the past 18 months, it has attracted dozens of corporate clients, with deployments now moving from proofs of concept and trial to full commercial rollout.”

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