A new report from PwC draws on a survey of more than 1,300 global respondents, including heads from global banks, investment managers and insurers.
More than three-quarters of financial institutions plan to implement blockchain-based solutions by 2020, according to PricewaterhouseCoopers, a sign that the wealth management industry may also be eyeing the nascent technology.
A new report from PwC, Redrawing the lines: Fintech's growing influence on Financial Services, draws on a survey of more than 1,300 global respondents, including heads from global banks, investment managers and insurers.
Investors appear to be ramping up funding of the emerging technology, as PwC's data shows investments made in blockchain companies have increased 79 per cent year-on-year, reaching $450 million globally.
Blockchain technology, a virtual distributed ledger of transactions shared peer-to-peer, can record ownership across a public network of computers rendered tamper-proof by advanced cryptography. It is already known as the platform for the controversial digital currency bitcoin.
The technology is causing a stir within the financial services sector as its supporters believe it could reduce hidden expenses in the financial system by ousting inefficiencies across areas such as payments, syndicated loans and equity clearing.
Not only is a significant amount of cash flowing into firms exploring blockchain solutions, but global institutions seem to be taking a hands-on approach; nearly a quarter, or 24 per cent, of respondents to PwC's survey say they are now “extremely” or “very” familiar with blockchain technology.
“The report makes it clear that blockchain is moving from hype to reality and real life use cases are set to become much more common,” PwC said. “With the potentially huge back-office cost savings and transparency gains blockchain can provide, the technology will receive increasing investment as finance firms explore its ability to ensure they are fit for future growth.”
Banks, regulators and other financial services participants are forming consortiums and working groups, such as R3 and Enterprise Ethereum Alliance, which aim to develop blockchain-based solutions that could be applied to businesses in order to streamline certain processes.