Global blockchain use to save banks $10bn in cross-border payments by 2030
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3,300% savings growth as efficiencies take effect
A recent report by Juniper Research has found that banks will record a 3,300 percent growth or $9.7 billion in cost savings within a 10-year period to $10 billion in 2030 from $301 million in 2021 as a result of the increasing drive in the deployment of blockchain for cross border settlement.
The report also shows analysts’ expectation of an increase in blockchain adoption over the next decade, with two billion cross-border transactions to be facilitated by blockchain in 2030, as blockchain networks continue to build.
The report said with the expansion in the number of integrations with major payment players across broad trade corridors, blockchain solutions such as RippleNet and Visa B2B Connect are already offering significant payment efficiencies compared with legacy systems.
In addition, it also said Ripple has joined the ISO 20022 Standards Body, placing it in a strong position to establish blockchain as part of international payment standards.
The report titled, ‘Blockchain in Financial Services: Key Opportunities, Vendor Strategies & Market Forecasts 2021-2030,’ which was accessed by Business A.M., shows that the implementation of blockchain in cross border settlement will enable stakeholders to leverage improved payment transparency and traceability; a critical advantage in an Omni-channel payments market.
It also found that large trading nations, such as the United States and China, will record the largest increase in cost savings from the adoption of blockchain, noting that this will be triggered by high remittance volumes and increasingly favourable regulatory environments.
Also, the potential for blockchain to meet critical requirements of fast, reliable, and transparent payments will be a key driver of adoption in these high-value remittance markets, the report stated.
Susannah Hampton, the author of the research, explained that, “Current international remittance processes are severely constrained by legacy systems. Proof of cost savings through blockchain use will be critical for the technology to proliferate, as will fostering a culture of acceptance for the technology from the top down.”
However, a significant barrier to the wide scale adoption of blockchain, according to the report, may be the reluctance from payment stakeholders to change established business practices and shift away from legacy systems.
However, it notes that the communication of blockchain benefits against the investment required for implementation will be crucial to stakeholder buy-in, as well as act as key to further growth in cost savings for banks.