28 May 2018
visit www.ebaday.com

It may take ten years, but blockchain tech will totally transform capital markets

03 February 2016  |  18211 views  |  0 Numbers

European clearing and settlement agency Euroclear has called on financial market participants to collaborate and embrace the long-term potential of blockchain technologies for cutting IT costs and driving down post-trade and securities servicing fees.

In a new white paper, published in conjunction with Oliver Wyman, Euroclear calculates that IT and operations expenditure in capital markets is currently close to US$100-150 billion per year among banks. On top of that, post-trade and securities servicing fees are in the region of US$100 billion. Significant capital and liquidity costs are also incurred as a result of current delays and inefficiencies within market operations.

Ben Shepherd, partner in Oliver Wyman’s strategic IT and service operations practice, says: “The prize on offer is a world where all capital market participants work from common datasets, in near real time and where supporting operations are either streamlined or made redundant.”

Direct savings from blockchain, he says, would need to come from the decommissioning of redundant or duplicative systems, reduced operational overheads and cost-sharing across institutions. Reducing firms’ financial resource requirements, for example by reduced counterparty credit risk, may also help to drive down economic costs of business.

The paper lays out three routes to the adoption of the technology:
  • Challenger disruptions developed outside of the core capital markets ecosystem, typically occurring within the next 18 to 24 months.
  • Collaborative efforts to shift the existing value chain to blockchains, a process that is likely to to take more than ten years to overhaul core parts of the system.
  • Mandated policy where supervisors direct the industry to introduce new market infrastructure, so that costs are reduced or that operational or systemic risk is lessened.
Angus Scott, head of product strategy and innovation, Euroclear says: “In order to work together to shape a new future, the industry needs to take a collective view on the potential of the technology, which was the intention of this study. The market must embrace this potential, show patience with this development and invest in various innovative solutions to bring it to reality.”

Read the full paper:» Download the document now 2.4 mb (PDF File)
KeywordsDEPOSITORIES

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Goldman and IBM join Digital Asset Holdings funding round

Goldman and IBM join Digital Asset Holdings funding round

02 February 2016  |  11155 views  |  1 comments | 13 tweets | 3 linkedin
BNP Paribas completes blockchain for transaction banking hackathon

BNP Paribas completes blockchain for transaction banking hackathon

02 February 2016  |  11139 views  |  1 comments | 15 tweets | 20 linkedin
JPMorgan begins blockchain trial - FT

JPMorgan begins blockchain trial - FT

01 February 2016  |  8941 views  |  0 comments | 19 tweets | 17 linkedin
Financial industry giants join $50m Digital Asset Holdings funding round

Financial industry giants join $50m Digital Asset Holdings funding round

21 January 2016  |  15653 views  |  0 comments | 13 tweets | 20 linkedin
R3 runs blockchain proof-of-concept with eleven banks

R3 runs blockchain proof-of-concept with eleven banks

20 January 2016  |  16853 views  |  1 comments | 33 tweets | 32 linkedin
It's time to take a stand against all the blockchain crap out there

It's time to take a stand against all the blockchain crap out there

20 January 2016  |  27491 views  |  29 comments | 98 tweets | 38 linkedin
Nasdaq sees in the New Year with first blockchain transaction

Nasdaq sees in the New Year with first blockchain transaction

04 January 2016  |  16010 views  |  1 comments | 36 tweets | 32 linkedin
R3 consortium numbers swell; FS giants join Linux Foundation distributed ledger project

R3 consortium numbers swell; FS giants join Linux Foundation distributed ledger project

17 December 2015  |  10802 views  |  0 comments | 17 tweets | 19 linkedin
SETL commences fundraising; appoints former BofE exec Sir David Walker as chairman

SETL commences fundraising; appoints former BofE exec Sir David Walker as chairman

15 December 2015  |  5623 views  |  0 comments | 7 tweets | 2 linkedin
Blockchain startup hires former head of Swift Americas

Blockchain startup hires former head of Swift Americas

14 December 2015  |  5051 views  |  0 comments | 10 tweets | 4 linkedin
Bank spend on blockchain tech to top $1 billion by 2017 - Magister Advisors

Bank spend on blockchain tech to top $1 billion by 2017 - Magister Advisors

14 December 2015  |  15213 views  |  0 comments | 38 tweets | 27 linkedin
Commodities market consortium to explore blockchain for post-trade

Commodities market consortium to explore blockchain for post-trade

24 November 2015  |  8376 views  |  0 comments | 10 tweets | 5 linkedin
ASX considers replacing clearing and settlement system with blockchain

ASX considers replacing clearing and settlement system with blockchain

26 October 2015  |  7332 views  |  0 comments | 9 tweets | 14 linkedin
FIX sets up blockchain Working Group; SETL busts 1billion transactions per day

FIX sets up blockchain Working Group; SETL busts 1billion transactions per day

12 October 2015  |  11175 views  |  0 comments | 17 tweets | 12 linkedin
Blockchain poised to become banking's biggest disruptor yet - BBVA Compass economists

Blockchain poised to become banking's biggest disruptor yet - BBVA Compass economists

11 August 2015  |  27704 views  |  1 comments | 66 tweets | 33 linkedin

Related company news

 

Related blogs

Create a blog about this story (membership required)
Visit www.niceactimize.comVisit iliad-solutions.com/Visit http://go.jumio.com/finextraAd

Who is commenting?

Top topics

Most viewed Most shared
satelliteAnt Financial provides tech for China Ever...
37077 views comments | 3 tweets | 2 linkedin
Digital banking transformation creating new systemic risksDigital banking transformation creating ne...
9353 views comments | 18 tweets | 26 linkedin
ING opens developer portalING opens developer portal
8000 views comments | 18 tweets | 23 linkedin
MUFG to roll out blockchain payment network next yearMUFG to roll out blockchain payment networ...
7943 views comments | 13 tweets | 13 linkedin
PayPal and Google bind payment railsPayPal and Google bind payment rails
7641 views comments | 11 tweets | 17 linkedin

Featured job

to $120K base, 200K ote, benefits
New York City, NY - USA

Find your next job