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The Bain and Tabb Group study shows that the level of Blockchain knowledge among top executives has improved.
Most financial firms expect to see the transformative impact of Blockchain technology and its adoption in the next three to five years, according to a study conducted by the management consulting firm, Bain & Company.
It says that more than 89 percent of financial markets executives interviewed expect distributed ledgers to be adopted by financial institutions by 2020 and its impact on clearing and settlement would be “transformative.”
One of the marked changes that would be expected of the technology is its ability to ensure an estimated $15-30 bln total cost and capital savings to global financial market ecosystems. Much of these savings will come from the ability of firms to replace manual, redundant and error-prone processing methods.
Firms will also be able to quickly and less expensively harness reference data that is both richer in detail and more fully reconciled, the report says, adding that it is hard to predict exactly when and where the technology’s applications will reach scale and what kind of impact it will have across markets.
Though there have been several studies into the importance of the technology, this study shows that the level of its knowledge among top executives has improved.
According to Deloitte, in its “Blockchain Enigma. Paradox. Opportunity” study, the principal challenge associated with Blockchain is a lack of awareness of the technology, especially in sectors other than banking, and a widespread lack of understanding of how it works which has been hampering investment and the exploration of ideas.
In its other report, “Building up Blockchain,” Deloitte notes that nearly 40 percent of executives surveyed know little or nothing about Blockchain. When juxtaposed with the Bain and TABB report, the outcome could be considered as very encouraging.
Conducted among 200 financial executives worldwide, 70 percent of the business leaders polled believe that the industry is suffering from a serious shortage of talent “versed in both the vagaries of the Blockchain and the complex plumbing of the financial services ecosystem.”
Some of these executives say they are under pressure to show near-term results and they must gain the attention, understanding and commitment of top management. They are now struggling with business cases and where to apply their efforts.
“It’s unclear how the regulatory environment will evolve in different jurisdictions. Getting ready for DLT requires substantial investment at a time when many firms are facing financial constraints, and it can involve working through tricky and expensive issues with legacy IT systems and processes.”
However, while 38 percent of firms still take a wait and see approach, the report finds that firms can identify “no regret” DLT readiness preparations to navigate uncertainty and to gain a competitive edge. Nonetheless, it established that the biggest impact from the technology will be achieved only when a critical mass of the ecosystem participates.
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