A new Accenture report has found that 90% of major commercial banks in Canada, the US and Europe are exploring how blockchain can reduce costs, accelerate payment processes, minimise errors and drive new revenues.
The Blockchain Technology: How banks are building a real-time global payment network report surveyed 32 commercial banking professionals from banks in the three regions.
According to the study, 30% of banks are in the advanced stages of adopting blockchain technology for payments, while 70% are still in the early stages. Within the latter group, 30% are developing proof-of-concepts with other companies, 27% are still formulating a strategy and 13% are looking into the technology.
“Cross-border payments are ripe for innovation using blockchain and distributed ledger technologies,” said Richard Lumb, group chief executive of financial services at Accenture. “The technology could resolve inefficiencies and friction that have long driven up the costs – and the time – required to move money around the world. Blockchain has proven its scalability to support such infrastructure. And as the industry sets its focus on developing the networks, business processes and standards needed to run these systems, payments could be one of the first major proving grounds for enterprise blockchain adoption.”
Primarily, most banks are using blockchain technology for processing intra-bank cross-border transfers (44%), while a secondary focus is on cross-border remittances, corporate payments and inter-bank cross-border transfers.
All of the executives surveyed expect that blockchain technology will help lower administrative costs, reduce settlement time and errors, and provide greenfield revenue opportunities via innovative new products and services.
However, 50% of the respondents recognised that there are challenges associated with integrating and implementing blockchain technology. The main concerns were cited as regulation (63%), compliance (56%), security (33%) and internal resistance to blockchain adoption.
“For many executives, the value proposition for blockchain is not yet clear enough and top decision makers have insufficient understanding of the technology,” said Richard Meszaros, connected commerce lead in Accenture Digital, and co-author of the report. “Providing education to employees and executives continues to be critical for the near term. But the broad success of blockchain in payments hinges upon industry collaboration to create supporting networks that include banks and non-banks.”
Share this story