inancial institutions will save $7 billion (£5.43 billion) by 2024 thanks to blockchain technology and the automation of customer checks, a market research firm has predicted.
In a new report, Juniper Research explained how blockchain enables real-time clearing and settlements for business-to-business transactions while offering increased transparency and reduced costs.
It forecasts the value of B2B cross-border payments stored permanently on blockchain to exceed $4.4 trillion worldwide by 2024, far more than the $171 billion forecast in 2019.
“The implementation of blockchain is part of a wider strategy for financial institutions to digitally transform operations,” said report author, Dr Morgane Kimmich.
“Blockchain will enable stakeholders to reduce operational costs in a competitive market that is becoming increasingly commoditised.”
According to The Actuary, Juniper Research expects cost savings through the automation of know-your-customer and anti-money laundering checks, and more efficient identification of users via the standard settlement instruction.
The report comes on the same day that the Confederation of British Industry (CBI) revealed that investment in blockchain and other distributed ledger technologies by UK businesses is likely to double from 16 per cent today to 35 per cent within five years.
It also found that a third of firms are set to begin investing in artificial intelligence (AI), while the proportion of businesses spending on quantum computing is set to nearly triple from 11 per cent to 32 per cent.
The CBI said that, although still in its research phase, quantum computing has the potential to do in a couple of minutes what it takes current computers thousands of years to complete.
Moreover, it found that 41 per cent of businesses are supportive of the regulatory environment that underpins technology investment in the UK, although most firms are “deeply concerned” by current political instability.
“AI, blockchain and quantum computing are all next on the investment horizon. These technologies will be used not only to improve customer experience and reduce costs, but open up new frontiers of innovation,” CBI director, Felicity Burch, said.
“If firms are to continue developing the technology behind quantum computing, robotics and AI in the UK, ending political instability will go a long way to unlocking investment.”
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