We have prepared a short report about blockchain adoption in the banking industry. Check the most interesting case studies we have gathered for you. Get it here
Blockchain adoption in the banking industry
The banking sector will change dynamically with the advancement of technology and digitization, and blockchain, as one of the most disruptive technologies, will have a huge impact on this. Taking into account, that the financial sector could save $12 billion annually by adopting DLT, it is not surprising that most banks have already started seeking ways to adopt blockchain for their needs. In what areas? The most popular applications are:
- digitizing identity verification for Know Your Customer policy,
- decreasing costs of anti-money laundering procedures,
- fraud prevention,
- Durable Medium issues.
Why is it so important? Banks and other financial institutions are required to take action to help with the money laundering problem, which is estimated to be worth between 2 and 5 % of global GDP. Research shows that average spending on KYC procedures is $48 million (with up to $500 million per year in the case of major institutions) and that’s still not enough. The penalties associated with non-compliance with the requirements totaled $321 billion from 2008 to 2016.
How can blockchain help?
Digitizing identity verification based on blockchain could save a bank €10m a year and be faster, more efficient, and safer at the same time. KYC regulations are the main reason for the long onboarding time of new customers, which lasts an average of 24 days and it can cause a high abandonment rate, worth €150m in the next five years.
The benefits are undeniable. Blockchain allows reducing the risk of mistakes or fraud, automating AML processes, and complying with regulations to avoid fines. No matter that financial services account for more than 60% of blockchain technology market value, spending about $552 million on blockchain-related projects.
Examples of blockchain adoption
To give you an overview of this subject, we have prepared a paper about blockchain adoption in this industry with the most interesting case studies. Check our publication with 12 use cases from the last 5 years.
If you know any other interesting examples, be sure to let us know. And if you are thinking about implementing blockchain technology in your company, contact us and arrange a workshop of discovery.