Blockchain impact timeline speeds up, massive cost savings forecast
13 January 2017 | 17318 views | 0
Uptake of distributed ledgers will remove $110 billion in costs for the global financial services industry over the next three years as the technology is applied to critical 'pain points' across seven legitimate use cases, according to an analysis by McKinsey.
The Mckinsey study estimates that blockchain technology will begin to have a material impact over the next three years, with widescale adoption within five.
The biggest beneficiaries of the technology will be in the cross-border B2B payments sector, where the disruption to middle men and legacy plumbing will yield up to $60 billion in savings. Trade finance too appears high on the list, experiencing a $14 billion revenue boost from the abolition of antiquated, paper-based processes.
Other areas set to see significant imminent savings, include P2P payments, repo transactions, derivatives settlement, KYC and anti-money laundering, and ID fraud.
Growing awareness of the true potential of the technology will spark a blockchain gold rush, with banks tipped to splash as much as $400 million in investment spending by 2019.
The report paints an optimistic picture - billing blockchain technology as "one of the most disruptive innovations since the advent of the Internet" - but cautions: "Enabling collaboration, shaping a positive regulatory environment and identifying clear business cases justifying the transition costs will pose the biggest challenges to implementation."