Blockchain To Disrupt Banking Industry By 2020: Infosys
A number of bankers expect commercial adoption of blockchain technology by 2020, with many financial institutions already investing or planning to invest during 2017, a study by Infosys and LTP today said.
Blockchain is like a huge, decentralised ledger for bitcoin (digital currency) that records every transaction and stores this information on a global network so that it cannot be tampered with. It allows secure, peer-to-peer transactions that can be verified without any centralised authority. Banks and other financial institutions are increasingly investing in blockchain technology as it cuts down their costs and makes their operations faster and more transparent.
The report — Blockchain Technology: From Hype to Reality — found that over 80 per cent bankers surveyed said they expect to see commercial adoption of the technology by 2020. Nearly half (50 per cent) of the financial institutions are already investing or planning to invest during 2017, the Infosys Finacle-Let’s Talk Payments (LTP) global report said.
The study, which included over 100 financial services professionals, was conducted to understand the sentiment of blockchain technology in the banking industry. About 33 per cent respondents said they expect to see commercial blockchain adoption by 2018 while a majority (nearly 50 per cent) see mainstream adoption by 2020.
According to the survey, the average investment in blockchain projects in 2017 is expected to be about USD 1 million. Also, about 50 per cent of the banks said they are either working with a fintech start-up or technology company to augment their blockchain capabilities whereas another 30 per cent said they are opting for the consortium model.
“The study confirms that the blockchain rollout would be prioritised in business areas where it can significantly improve transparency, automate processes across enterprises as well as reduce settlement and transaction time,” it said.
Sanat Rao, Chief Business Officer and Global Head, Finacle, said the technology can help banks automate inter-organisation processes, significantly improve transparency and reset existing operational benchmarks. Infosys believes, in coming quarters, that the industry will experience greater momentum towards rolling out lab-pilots to real-life use cases, he added.
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