Blockchain technology is making significant contributions to the efficiency of operational processes in banking institutions.

In this first of a two-part series we focus on the reduction-based elements Blockchain contributes to making banks work more fluidly.

Elimination of Intermediaries:
The enablement of peer-to-peer transactions potentially takes intermediaries such as clearing houses and payment processors out of the equation, and along with them the associated transfer fees and processing times.

Streamlined Processes:
A more minimalist approach as outlined above means banks can lower their operational overheads, and by simplifying their workflows substantial cost savings can be made.

Reduced Infrastructure and Customer-Borne Costs:
Utilizing a shared Blockchain infrastructure means banks reduce their dependance on extensive data reconciliation processes and record-keeping systems. The lower IT maintenance costs are a knock-on benefit.

Early studies in the adoption of Blockchain tech predicted significant cost savings for banks. One research paper from Accenture foresaw infrastructure cost reductions at an average of 30% for eight of the world’s 10 largest investment banks.

Similarly, a more recent study by Juniper Research estimated that financial institutions making cross-border payments could be saving $10 billion in costs by 2030, while Uniswap predicted a reduction in cross-border and FX payment fees of up to 80% when traded on-chain.

In part two of our analysis, we’ll look at further enhancements Blockchain tech is making to cost saving in banks.

The descriptions provided above are all based on publicly available information, and cannot be considered as financial advice or encouragement to invest. Sources of information used in this post include FinTech Magazine, Accenture and Forbes.  All transactions involving digital assets involve certain risks, which you should familiarize yourself with prior to any investment.