A recent research done by market intelligence outfit Juniper research shows that the deployment of blockchain technology in financial institutions stands to lead to massive savings amounting to over 27 billion dollars on international transactions before the close of the year 2030. The company revealed this stunning information on their twitter handle. According to the Juniper research report dubbed “The future of blockchain: key vertical opportunities and deployment strategies 2018-2030” there are a number of other areas where banks can realize savings. This area includes compliance and treasury operations.
All departments will not generate similar savings, however, with some departments generating much bigger savings than others. Big savings will be realized especially in compliance for instance in automation of checking for money-laundering schemes through the blockchain which will result in savings of up to 50 percent within a couple of years. The market intelligence firm did, however, note in their report that since the legacy systems will run parallel to the blockchain based services, cost reductions would not be realized immediately. These cost reductions will instead be felt slowly in a span of several years. The juniper research project report further indicated that these cost savings would only reach an annual figure of about 1 billion dollars in 2024.
Other industries outside of banking also stand to gain from the efficiency enhancements brought about by the blockchain, according to the report. One of the industries outside banking that will stand to gain is Food export trade. Efficiency enhancements as result of the blockchain are expected to reduce costs associated with fraudulent activity by half within 12 years. The Juniper report is in tandem to a report released by the global information source, IHIS Markit, where it was stated that business associated with the blockchain would rise from 2.5 billion dollars in 2017 to 2 trillion dollars in 2030. Just like the Juniper report stated, the IHIS report also singled out the financial sector as the biggest beneficiary of the block chain’s transformative effect.
IHIS market senior blockchain analyst, Don Tait, emphasized this by pointing to all the frequent announcements of big banks and financial announcements taking to the blockchain to revolutionize certain and significant parts of their business strategies. To him, this is a major sign that the blockchain will mostly be utilized by the vertical financial market. When it comes to the financial scene, the blockchain will not only be important for international payments. The blockchain technology will also benefit other areas such as; assets custody, derivatives, share trading, claims management, and corporate actions processing. Due to the size of the subsectors in the financial industry, the business value of the blockchain will, therefore, be huge.
