Barely a day goes by without a reminder of how banks are using blockchain to transform transactions. Not only does the technology remove the need for middlemen, it can speed up transactions and increase trust among users.
The best part – it may just save banks billions of dollars.
Analysts at Accenture believe banks could save $10 billion by using the technology to improve the efficiency of clearing and settlement. Market intelligence firm, Juniper Research, noted the technology could generate savings of $27 billion on cross-border settlements by 2030.
“Blockchain deployments to save banks more than $27b annually by 2030, with cost reductions not just in payments processing and reconciliation, but in treasury operations and compliance,” they tweeted.
Besides cross-border settlements, IHS Markit believes other areas will greatly benefit, too.
This includes collateral management, assets custody, derivatives, claims management, share trading and corporate actions processing.
Blockchain Revolutionizing Transactions
It’s not just the banks that will benefit from the technology.
Early adopters of the technology have been companies in the financial sector. However, it’s just now starting to ripple through every industry, affecting the global community.
That alone could create a multi-billion opportunity, if not trillions.
IHS Markit believes the realized cost savings and efficiencies could increase from $2.5 billion in 2017 to $2 trillion by 2030.
For example, the supply chain and logistics industry is likely to see improvements.
In fact, according to the World Trade Organization, the reduction of barriers in the supply chain could increase global GDP by as much as 5%.
When it comes to retail and e-commerce, blockchain could create $164 billion of value by 2030.
“Blockchain and smart contracts can also provide the tools and framework to create a new generation of marketplaces where the supply and demand sides can engage in trusted trading transactions, according to various business rules, without the need for a central brokerage entity,” notes IHS Markit.
Blockchain use in healthcare could help pharmaceutical companies save $200 billion annually in lost revenues.
In short, blockchain technology is a game-changer.
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