A new report claims that blockchain technology could reduce infrastructure costs by an average of 30 percent for eight of the world?s ten biggest banks.
Beancounters at Accenture and their chums at the financial services consulting firm McLagan, have added up some numbers and divided by their shoe size and worked out that these savings could mean $8-12 billion each year.
According to the report, which has the catchy title ?Banking on Blockchain: A Value Analysis for Investment Banks?, the technology could solve a lot of the financial industry?s problems.
Richard Lumb, Accenture?s group chief executive for financial services, said that capital markets institutions have faced a perfect storm of regulatory-compliance costs and revenue pressures recently.
Blockchain would enable banks to move to a shared, distributed database that spans multiple organisations. With the technology, records of transactions exist in a tamper-evident data structure that provides the required levels of data security and can be verified across a network of participants, he added.
David Treat, managing director for Accenture?s financial services industry blockchain practice, said: ?Given the tremendous cost of data reconciliation ? which is part of every aspect of the capital markets industry ? it?s no surprise that we?ve seen a significant amount of investment in blockchain technology. But, as with any emerging technology, understanding what these investments might yield is a challenge.?
By replacing independent, fragmented databases with a distributed system, banks can reduce data reconciliation costs while also improving data quality and ensuring data security.
Finance reporting costs could decrease by 70 percent because of optimised data quality and banks could save up to 50 percent on compliance costs due to the improved transparency of transactions.
It has become increasingly obvious in recent months that blockchain will be key to the future of the banking industry, with most banks expected to adopt the technology within the next three years.
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