Up to $12bn could be saved in costs at the world’s largest investment banks by simply shifting towards blockchain technology, according to a new report.
Where bitcoin previously acted as the catch-all, entirely incorrect one-word description of blockchain technology in its formative years, the breadth of the industry is now a well-established forum of focus.
Blockchain is a type of database system that enables multiple parties to share access to the same data with a high level of confidence and security. In terms of finance, it means increased traceability, anonymity and, in essence, transparency – all in a digitised format.
Accenture’s report looks at its general blockchain costings data, as well as information on some of the world’s top investment banks, with benchmarking firm McLagan.
The result was a 30pc saving in areas across the banks’ operations should blockchain technology be prioritised in future, ahead of what Accenture calls “traditionally fragmented” database systems currently in place.
According to the report, finance-reporting costs could shrink by 70pc thanks to blockchain’s ability to optimise data and verification. Compliance costs could plummet by up to 50pc, thanks to “auditability”.
Other savings in support software for customer engagement procedures, as well as management procedures and office controls, could see the total saved at eight of the 10 largest investment banks top out at $12bn.
“Given the tremendous cost of data reconciliation – which is part of every aspect of the capital markets industry – it’s no surprise that we’ve seen a significant amount of investment in blockchain technology,” said David Treat, MD for Accenture’s financial services industry blockchain practice.
“But, as with any emerging technology, understanding what these investments might yield is a challenge.
“As we move into production implementations, bank executives will need a clear roadmap for how and where to rethink their strategies and redesign their operating models, which is why we undertook this unique study.”