Innovate Finance has been working with the Department of International Trade (DIT) on a report on blockchain and the future of financial services.
The report was developed with the help of the Economist Intelligence Unit and is now available here . The Executive Summary is as follows:
Blockchain is a young technology, first conceptualised in 2008. The financial industry has been among the first industries to seize upon the efficiency savings that its distributed ledger technology could deliver, and for good reason: Using distributed-ledger technology could help financial services providers lower the worldwide cost of cross-border payments, securities trading and compliance by $15-20 billion per year by 2022, according to Spanish banking giant Santander1.
For now, real-life use of blockchain technology is still limited.
Its current use is mostly to be seen in the bitcoins—virtual currency created with blockchain technology—that cross borders with negligible regulation. Incumbent banks, asset managers, insurers and technology firms are keen to experiment with the new technology. Their initial trials focus on niche areas of trade finance, payment settlements and reconciliation. While interest in applying the technology is growing, widespread implementation may take years. An all-encompassing financial blockchain is unlikely to emerge from current projects. Yet the financial industry already has a consistent view of what needs to be done to put private specialist blockchains to good use.
Here are some of the likely main features of the future use of blockchain in the global financial services industry: