Banks Spend $1.7-B Per Year For BlockchainJun 14, 2018 at 22:59
Banks and financial service companies are spending $1.7 billion annually to use blockchain technology in their platforms.
This is according to an analysis of annual spending done by Greenwich Associates, a Connecticut-based market intelligence and advisory services firm, Bloomberg reported.
The amount spent in 2017 is an increase of 67 percent from last year, with at least one out of 10 banks and other companies allocated budgets over $10 million, the study showed.
It also revealed that companies employed more personnel to work on blockchain initiatives by launching new proof-of-concept projects or shifted top product implementation.
Meanwhile, according to the study, 14 percent of banks and other firms claimed to have a successful launch of blockchain solution, mostly targeted in payments and trade finance.
While distributed ledger technology (DLT) shows the potential of creating revenue opportunities, shortening settlement time, and reducing risk and cost of capital, financial firms invest in blockchain to reduce costs.
In the past few years, Greenwich Associates said DLT products have been the core focus of financial services firms but development has been unable to keep up with the hype.
“More than half the executives we interviewed told us that implementing DLT was harder than they expected,” Greenwich Associates vice president for market structure and technology Richard Johnson said.
But despite struggles, more projects are still in development and will be launched in the near term.
“Nevertheless, more than three-quarters of projects currently under development are expected to be live within two years,” Johnson said.