Blockchain ‘to boost revenues for FS firms’
Written by Chris Lemmon
Three quarters of financial services executives believe that the use of blockchain technology will boost their revenues by more than five per cent and lead to annual savings of $20 billion.
This is according to a new study from Cognizant, which surveyed more than 1,500 financial services executives from 578 firms worldwide. It found that 91 per cent of respondents believe that blockchain’s implementation and use will be critical or important to their firm’s future.
FS executives believe that savings from the use of blockchain will be made from infrastructure costs for cross-border payments, securities, trading and regulatory compliance.
Some 98 per cent expect blockchain to save their firm money, while the technology is also expected to address some industry challenges with respondents citing improved data management (47 per cent), transparency (46 per cent), risk management (40 per cent), and speed of digitisation (39 per cent).
However, despite consensus amongst users that the complex algorithms ensure transaction data cannot be tampered with after verification, only 11 per cent believe that blockchain will reduce fraud.
Blockchain may be a relatively new technology, but almost half (48 per cent) of respondents have a defined blockchain strategy in place, and 42 per cent said that they have identified processes and functions that could be transformed.
Lata Varghese, vice president and leader of blockchain and distributed ledger consulting practice at Cognizant, explained: “From opening new markets, to increasing cross-selling opportunities and even creating entirely new business models, financial firms that move quickly on blockchain, realising the cost advantage while successfully providing added-value services, will triumph over their competition.
“To see the substantial benefits blockchain can deliver, firms cannot afford to wait for the fragmented blockchain landscape to converge and business applications to become clearer. Businesses need to move aggressively need to re-evaluate their business models and face-up to the culture change required to collaborate with external partners in the business world of blockchain. Businesses that are slow to pick up on opportunities to apply blockchain to their business will find themselves left behind as the industry moves on without them.”