The world has entered a dynamic digital age where countries are competing to digitize every process, and in this world, cryptocurrencies are the new moolah. Digital currencies are being promoted as a safe and better option for financial transactions, and these currencies are based on blockchain technology, which has been hailed the next big revolutionary technology after the invention of the internet. The recent worldwide ransomware attacks have made use of the biggest cryptocurrency in the world, Bitcoins. The advantages and disadvantages of this new technology are still being debated by experts, but it is undeniable that blockchain technology is here to stay.
Many advantages associated with blockchains such as the elimination of third party intermediaries, the creation of transparency, streamlining of due processes, protection from malicious attacks and internal and external cost savings, are attracting many multinational banks and financial institutions to integrate this technology into their transaction processes. The incredible potential of blockchain has been debated for the last couple of years, but the first real application has begun this year, as the blockchain can pave an array of new product segments and revenue streams. The market is witnessing huge investments in the research and development of blockchain technology with the prospect of transforming the way of business transactions. Leading financial institutions and banks, including Citibank, J.P. Morgan, Goldman Sachs and Barclays among others, have all the efforts and investments to drive the futuristic technology.
Despite the advantages exhibited by the blockchain, the companies had been skeptical about its implementation and are watching the market trend closely to decide for themselves. However, a huge step has been taken in this regard as IBM has come into an agreement with the Digital Trade Chain Consortium – a group of seven European banks that includes Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Societe Generale and Unicredit, to help parties manage international transactions running on IBM’s cloud. This step will certainly help the blockchain industry to establish a trustworthy image and partnership in the market. This technology could save billions of dollars for the BFSI industry every year, including infrastructure costs, IT costs, operations costs, support function costs, and personnel costs.
The blockchain technology is expected to eliminate the middlemen and automate processes ranging from tracking products through the supply chain to exchange of documents and final payments releases. This will act as a boon for the trade finance segment resulting in huge savings. This technology can also help capital markets in saving billions by reducing IT costs and fees paid to intermediaries such as central counterparty clearing houses (CPCs). Blockchain can also be helpful in detecting fraud and eliminating errors by providing a decentralized digital repository for verifying the veracity of customers and vendors.
BIS Research has conducted an extensive market research on ‘Blockchain Technology in Financial Services Market – Analysis and Forecast: 2017 to 2026’. The market intelligence report aims to provide an in-depth analysis of the key development strategies, marketing strategies and market trend dynamics which include drivers, restraints and opportunities prevailing in the industry.
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