Blockchain Set to Revolutionize Financial Services Market

According to a new market intelligence report by BIS Research, titled 'Blockchain Technology in Financial Services Market - Analysis and Forecast: 2017 to 2026' , 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.

The blockchain is now being widely recognized as one of the most disruptive technology across a number of industries, including the financial sector. The rocketing interest in the technology is being driven mainly by the increasing need to acknowledge the inefficiencies in the existing technologies and processes in the industry and increasing mistrust of the consumers in the financial services market, post-2008 economic recession.

A blockchain is a distributed digital database that records and maintains a list of all transactions taking place in real time. Each blockchain record is time stamped and stored cryptographically, which is tamper-proof and immutable.

While the use cases of this technology are largely being explored across different industries such as 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 percent for finance companies. Consequentially, 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.

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.