Infosys Finacle, part of EdgeVerve Systems, a wholly-owned subsidiary of Infosys, along with its partner Let’s Talk Payments (LTP), released a global survey report - “Blockchain Technology: From Hype to Reality”. According to the report, over 80% of bankers surveyed expect to see commercial adoption of the technology by 2020, with nearly half (50%) of the financial institutions already investing or planning to invest during 2017. This announcement builds on the recent announcement by Emirates NBD and ICICI Bank on the deployment of blockchain technology in international remittances and trade finance.
The aim of the study, which included a survey of more than 100 financial services professionals, was to understand the sentiment of blockchain technology in the following areas:
· The technology’s current understanding in the banking industry
· Adoption strategies and investments being pursued
· The opportunities and challenges that the industry is dealing with
· 33 percent of respondents expect to see commercial blockchain adoption by 2018, while a majority (nearly 50%) 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
· Majority of banks, about 69 %, are experimenting with permissioned blockchains
· About 50 percent of the banks are either working with a FinTech start-up or technology company to augment their blockchain capabilities, whereas another 30 %are opting for the consortium model
· According to the study, 51 %of executives driving the blockchain initiatives are either Chief Technology Officers or Chief Innovation Officers
· The study confirms that the blockchain roll out would be prioritized in business areas where it can significantly improve transparency, automate processes across enterprises as well as reduce settlement and transaction time
· The study further revealed that the top five use cases that are expected to go to production are: cross border payments, digital identity management, clearing and settlement, letter of credit process and syndication of loans. These use cases scored more than 3.2 on a scale of one to five, wherein one being the least prioritized use case for commercial adoption and five being most prioritized
Sanat Rao, Chief Business Officer and Global Head, Finacle, said, “This research reaffirms our belief that the blockchain technology has potential to help banks re-imagine banking processes. The technology can help banks automate inter-organization processes, significantly improve transparency and reset existing operational benchmarks. Several progressive organizations have already executed pilots to validate these propositions. We believe, in the coming quarters, the industry will experience greater momentum towards rolling out lab-pilots to real-life use cases.”
LTP surveyed 100 business and technology leaders from 75 institutions ranging from regional banks to multinational banks on behalf of Infosys Finacle.