Blockchain and other distributed ledger technologies (DLTs) have been touted as effective and cost-saving alternatives to present day systems, especially in the financial sector. A new study has put figures on these claims.
Economic analysis and research firm, Juniper Research recently conducted a study on the impact of blockchain adoption on banks globally. From the study results, the firm projected that on-chain transactions will reduce the cost of banking transactions by 11 percent in the very least. This will, in turn, save banks about US$27 billion annually by 2030 in payment settlements, operations, and compliance.
#Blockchain deployments to save #Banks more than $27bn annually by 2030, with cost reductions not just in #Payments processing and reconciliation, but in treasury operations and compliance. #Fintech #Banking
Read more in our press release: https://t.co/pNWXeopbjO pic.twitter.com/pYk2PYsISQ
— Juniper Research (@juniperresearch) August 1, 2018
The research titled ‘The Future of Blockchain: Key Vertical Opportunities & Deployment Strategies 2018-2030’, demonstrated that blockchain adoption will save costs in areas beyond the obvious payment processing and reconciliation. By automating ID checks via blockchain, Juniper analysts argued that banks can reduce compliance costs by 50 percent.
The report, however, acknowledged that these benefits can come gradually. The statement from the researchers read:
“the research cautioned that the need to parallel-run blockchain-based services with legacy systems would mean that savings would not be realized for several years after initial deployment, with annual cost reductions not reaching $1 billion per annum until 2024”
Broader Blockchain Outlook
Juniper also released a whitepaper detailing the extent of blockchain disruption where it highlighted industries where blockchain would have the greatest impacts in the next couple of years.
Juniper predicts that along with the fintech sector, blockchain adoption will greatly improve four other sectors namely; Land Registry, Food Provenance, Automotive, and Healthcare Sectors. In the Food sector, report author Dr. Windsor Holden projects that blockchain will reduce fraud and its associated costs by almost half within a period of 12 years.
Solomon Sunny is the market reporter for Smartereum, one of the global leaders in Ethereum, blockchain and currency news. He produces technical price updates on digital currencies and writes recent developments about blockchain.
