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Boston Consulting Group: blockchain implementation may be one of the scenarios of the banking sector’s evolution

In the face of rising costs and shrinking margins corporate banks require a radical change in their business models.

This will enable them not only to survive but to become stronger. That is the conclusion reached by the authors of a new study The Boston Consulting Group (BCG), according to a press release.

According to the report released earlier in the week, "Global overview of corporate banking market in 2016. A new generation of corporate bank" financial institutions must first think about adopting the digital transformation strategy, for which they have very little time left.

According to researchers, regardless of whether market participants are ready for it or not, the digital transformation of the banking sector will occur in the coming years.

BCG analysts see three possible scenarios for the evolution of the banking sector: Industry 4.0 (introduction of the internet of things), the creation of the banking ecosystem and implementation of blockchain technology.

"Industry 4.0 will link into a single network building, transport, sensors and equipment, making the process faster, more efficient and flexible," says the BCG report.

Banking ecosystem requires maintenance of not only a particular company, but also its partners and customers. For example, Amazon, which owns the biggest online store in the world. Corporate banks will be able to serve not only the owner of the platform, but also its many suppliers and distributors.

Simultaneously, BCG believes that the full implementation of blockchain technology in the banking system will not only automate the process of making payments, but also introduce ‘smart contracts.’ In combination with the internet of things banks will be able to become real autonomous organizations.

BCG research results were obtained by studying the indicators of 300 leading financial institutions. When analyzing the banks' profitability, it was noted that in the period from 2013 to 2015, about 70% of companies in Western Europe, in spite of the difficult economic conditions, managed to increase profits. At the same time, the percentage of American and Asian banks, which showed a positive trend, turned out to be much lower – 36% and 33%, respectively.

According to the report, the reason for this is that European banks were able to reduce the costs almost in all spheres of their activities. In North America, only the larger players in the market managed to do the same, while in Asia it is even rarer occasion.

Recall the results of a recent study by consulting firm Capgemini showed that today more than half of the banks are studying blockchain technology opportunities.

Source: forklog

  • December 14, 2016 11:49 AM MSK