On-chain Settlement Costs to Fall by 11% Compared With Current Levels
A new study from Juniper Research has found that blockchain deployments will enable banks to realise savings on cross-border settlement transactions of more than $27 billion by the end of 2030, reducing costs by more than 11% per on-chain transaction.
According to the research, The Future of Blockchain: Key Vertical Opportunities & Deployment Strategies 2018-2030, banks that integrate blockchain will achieve cost reductions not just in payment processing and reconciliation, but in treasury operations and compliance. Indeed, the research argued that in compliance, automation of identity/money-laundering checks, allied to capability of the blockchain to verify the digital identity of an individual, should enable savings of up to 50% of the existing costs base within a few years.
However, the research cautioned that the need to parallel-run blockchain-based services with legacy systems would mean that savings would not be realised for several years after initial deployment, with annual cost reductions not reaching $1 billion per annum until 2024.