Blockchain Adoption Will Save Banks $27 Billion USD By 2030 According To Research
A new study made by Juniper Research indicates that using the blockchain technology can make banks save a lot of money. According to the research, by the end of 2030, banks and financial organizations would have saved about $27 billion USD in cross-border transfers using this technology, which can reduce the costs of these transfers by over 11%.
The study was titled “The Future of Blockchain: Key Vertical Opportunities and Deployment Strategies 2018-2030” and it also includes some other areas in which the blockchain tech can be used to reduce the costs of operations.
Some areas will obviously be more affected than others. While 11% savings on cross-border transfers are still a big number, compliance for anti money laundering can have a cost reduction of incredible 50% if the companies could adopt the blockchain.
The Benefits Will Appear Over Time
According to the data, however, there are no indications that the costs will decrease swiftly as soon as the blockchain technology is implemented by the banks. Something that the companies are just starting to realize at the moment is that many blockchain advantages will not simply start as soon as the technology is adopted and that it might take a while before the projects are really profitable.
The costs will take several years to be maximized, even if some cost cuts are faster. According to the research made by Jupiter Research, the figure of $1 billion will not be reached until 2024 and it will increase exponentially from there.
It can also be seen on the report that other industries besides banking can benefit from using the blockchain technology to reduce costs and save money. The logistics industry and the food export trade can also expect to cut about half of its costs over a period of 12 years if they decide to use this technology to improve the companies.
Another report from IHS Markit confirms what Juniper Research already saw.The blockchain technology will increase exponentially in value. If the industry is worth $2.5 billion USD today, it will be worth $2 trillion USD in 2030.
IHS Markit has also appointed the financial sector as the sector that will benefit the most from these technologies and their future development in the industry until 2030.
Financial Vertical Market
According to Don Tait, senior analyst at IHS Markit, the financial vertical market will be the market that will use the blockchain the most. This can already be seen today as this sector is the one that keeps announcing all the time that it is planning to use the blockchain in new ways to develop its industry and increase its efficiency.
The IHS Markit group has also observed that besides cross-border remittance and transactions, other areas of the financial world can also be benefited. Some of these areas are assets custody, claims management, derivatives, collateral management, share trading and even corporate actions.
The group believes that the value of the blockchain will be enormous because of its uses for these industries. As the market capitalization of the stock markets of the world are $73 trillion USD, even the smallest savings will have a huge impact on the economy and this will be a boost for blockchain companies and the financial market.