Reasons for the widespread use of blockchain in 2021

Rage Review : Deutsche Bank interviewed 200 survey subjects, including investment institutions, banks, investors, brokers, and sovereign wealth funds; 87% of the respondents believed that blockchain technology will greatly affect the securities market. The opinions of major market participants and the obstacles that blockchain applications need to overcome are listed. Use data to verify the potential of blockchain and support research and development activities of blockchain applications.

Translation: Annie_Xu

Financial services providers are convinced of the potential of blockchain, according to a new survey from Deutsche Bank.

The 200 survey subjects included investment institutions, banks, investors, brokers, and sovereign wealth funds; 87% of the respondents believed that blockchain technology will have a significant impact on the securities market.

The following is a summary of the main findings of this survey.

1. 78% of respondents believe that blockchain applications will be more active within six years. Financial service providers have been slow to adopt new technologies, so this survey result is surprising. However, I think it shows the confidence of enterprises in blockchain to increase efficiency and reduce costs.

2. 48% of respondents believe that blockchain is most likely to eliminate system failures and market chaos. This is because blockchain technology can eliminate single points of failure, thereby preventing the collapse of the entire system. Decentralized distributed ledger systems inherently avoid single points of failure because there is no central organization and multiple network participants verify transactions.

3. 38% of respondents believe that blockchain can reduce the cost of financial services by 20%. The settlement process is most likely to benefit from this, because the main purpose of blockchain is to automatically record accounts. Therefore, it is possible to improve the efficiency of the existing settlement process, eliminate the risk of human error, and thus significantly reduce costs.

The premise for the widespread application of blockchain in the securities service industry is to clear all obstacles, such as successful blockchain application cases and a unified platform. Professionals believe that the way to overcome these obstacles is corporate cooperation. After all, a platform built by a certain entity cannot be recognized by everyone.

Blockchain technology is gaining attention from financial companies because of its potential to simplify processes and increase efficiency. Santander believes that by 2022, blockchain will be able to reduce annual costs by $20 billion.

Because blockchain distributed ledgers allow multiple parties to transmit sensitive information while ensuring its security and anonymity, it greatly simplifies the paper-based processes of the financial system, such as remittances and cross-border transfers, shareholder management, ownership transfers, securities trading, etc. Moreover, blockchain development has gone beyond the financial industry.

As a result, venture capital firms and financial institutions have been conducting research and investment in blockchain use cases. More than 50 large financial institutions are working with blockchain startups, conducting internal technology research and development, or investing in blockchain startups.

Jaime Toplin analyzed the principles of blockchain, explained its impact on the financial industry, predicted how blockchain will be deployed in the future, and wrote a report.

The following is a summary of the core contents of the report.

1. Aite Group believes that the cost of blockchain technology in the capital market will reach a compound annual growth rate of 52% in 2019, or $400 million.

2. Banks and large financial institutions are both collaborating and independently developing. More than 50 financial institutions have joined blockchain startup alliances, such as R3 CEV or Chain. Many of these institutions have also invested capital.

3. It won’t be too late for blockchain to be applied to actual transactions. If the alliance’s test is successful, the company will use it for real value transfer before the end of the year, and blockchain will be popularized throughout the industry in the next few years.

The report can be summarized as follows:

1. Discover the growth trend of blockchain financing.

2. Evaluate the reasons for the popularity of blockchain and the growth of R&D activities.

3. Explain in detail the working principle of blockchain technology and find out the defects and advantages of blockchain.

4. Identify the pain points of the financial industry and explore the current solutions provided by enterprises.

5. Obstacles to the popularization of blockchain and their solutions.