New research has revealed that 86 per cent of financial institutions are implementing or assessing services built on a decentralised framework.

BCG Platinion - part of Boston Consulting Group - and Crypto.com commissioned interviews with 411 decision-makers with familiarity over decentralised finance, finding that 31 per cent are planning enterprise-wide blockchain rollout or have deployed use cases.

Additionally, 58 per cent of companies are concerned they will lose a competitive advantage by ignoring decentralised finance instruments.

From the companies implementing decentralised finance, 35 per cent are collaborating with an existing consortium, platform, application or service. A further 24 per cent are developing their own consortium or platform and 22 per cent stated that they are going to collaborate with competitors because the current ecosystem is not compatible with their requirements.

From the more than 400 companies across Europe, 71 per cent with a turnover or balance sheet above £10 billion assessed or implemented decentralised finance, compared with 51 per cent of companies turning over less than £100 million.

Of those companies assessing or implementing the blockchain technology, 42 per cent are pivoting to a more decentralised approach to asset management, while 38 per cent are using it to facilitate faster, more secure, payment processing services – rising to 61 per cent for the biggest companies.

Conversely, 70 per cent believe security concerns over fraud is a challenge preventing company-wide adoption of decentralised finance.

The research also considered the impact blockchain will have on business and operating models, with 59 per cent stating they will have to implement a new governance structure. However, 70 per cent of companies said that restructuring the business model or decoupling decentralised finance will increase the speed and lower the cost for financial transactions.

A further 67 per cent said it would open up new revenue streams and 61 per cent said they believe smart contracts are an important business driver. At the same time, a lack of regulation is a challenge for 61 per cent of companies, increasing for those with a larger turnover or more assets under management.

Kris Marszalek, co-founder and chief executive of Crypto.com, said: “The research shows that decentralised finance adoption is not limited to just the blockchain industry; traditional financial institutions of all sizes are viewing it not as a competitive threat but rather as a valuable instrument to delivering more efficient financial services.”

Kaj Burchardi, managing director of BCG Platinion, added: “As markets evolve towards decentralisation, there will be a growing demand for approaches which can provide a more efficient and more open way of banking, trading and investing.

“It is encouraging to find that financial institutions are already seriously, and strategically, collaborating with the crypto community to begin building a new generation of governance and technologically resilient solutions that will make financial services more accessible.”

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