More and more financial institutions are working on the blockchain solutions. IBM has conducted two new researches that demonstrate rapid adoption of the blockchain technology throughout banking and financial markets.
Despite the fact that the technology is comparatively new and is still studied, about 15 percent of banks and 14 percent of financial market institutions interviewed by IBM admit that they are planning to implement full-scale, commercial blockchain solutions in 2017. Talking about the further adoption, roughly 65 percent of banks are going to develop and apply blockchain solutions in the next three years.
The surveys were conducted by the IBM Institute for Business Value (IBV). The first IBM study, “Leading the Pack in Blockchain Banking: Trailblazers Set the Pace“, represents the summary of information from 200 global banks. A second study, “Blockchain Rewires Financial Markets: Trailblazers Take the Lead (2),” refers to 200 global financial markets institutions.
The banking study shows that more than 70 percent of trailblazers surveyed, or early adopters, see blockchain solutions as a way to overcome current barriers to creating new business models and reach new markets. These trailblazers are better positioned to defend themselves against competitors, including those untraditional disruptors like startup non-banks.
As for the financial markets institutions, seven out of 10 trailblazers intend to apply blockchain to four key areas: clearing and settlement, wholesale payments, equity and debt issuance, and reference data.
“There are many advantages to being an early adopter of blockchain technology,” said Likhit Wagle, Global Industry General Manager, IBM Banking and Financial Markets. “To start, first movers are setting business standards and creating new models that will be used by future adopters of blockchain technology. We’re also finding that these early adopters are better able to anticipate disruption, fighting off new competitors along the way.”
According to IBM studies, larger financial institutions with more than a hundred thousand employees lead the blockchain race – not small start-ups or FinTech organizations. Additionally, 77 percent of these larger banks are retail banking organizations.
The blockchain technology is expected to have a beneficial effect on several business areas, including reference data (83 percent), retail payments (80 percent) and consumer lending (79 percent). The absolute majority of banks surveyed (80 percent) stated trade finance, corporate lending and reference data as having the greatest potential considering new blockchain-based business models that can emerge.
Believing in the power of blockchain, IBM has recently partnered with the Bank of Tokyo-Mitsubishi UFJ (BTMU) to use a blockchain-based platform for the management of smart contracts between entities. The companies are planning to automate business transactions using the technology built on the open source Hyperledger Project.
IBM is focused now on its blockchain consulting services and capabilities expansion. The company closely cooperates with clients to understand what it takes to make blockchain ready for business. IBM is striving to show that blockchain, though new technology, still accessible and open. It emphasizes financial services, supply chains, IoT, risk management, digital rights management and healthcare as the areas that can benefit most from the use of blockchain networks.