How long will it take for the mainstream banking and financial sector to start using bitcoin and blockchain technology? According to a study, they should be able to start using blockchain technology by next year.
The study conducted by TABB Research shows that it is highly feasible for the banking sector to readily implement blockchain technology into their operations. The probability of banks opting for this decentralized ledger technology that powers Bitcoin network is high and it’s only a matter of time before they went ahead and implemented it.
Many international banks are already invested in bitcoin technology. Many banks are working on their in-house blockchain projects to study the feasibility and build applications. Meanwhile, most of them have also formed a consortium, working together with a financial technology firm – R3 to develop a blockchain based interbank network that can be used for fund transfers instead of taking the traditional route.
Currently most of the fund transfer, especially the international ones happen through the Central Bank and SWIFT networks. Fund transfer though conventional channel takes a long time in addition to transaction and network fees associated with it. Using blockchain technology, banks can completely circumvent the existing channels and also make the whole process fast and efficient.
The use of blockchain technology will also make record keeping more efficient and transparent. Another report published few months ago by Santander Group states that the banks can save millions of dollars over a period of time on record keeping and compliance requirements by using blockchain technology.
The benefits of blockchain technology is already known to these financial institutions. Going by the findings of TABB Study, we can expect banks to start using blockchain technology by the end of second quarter next year. However, they would have to overcome the initial integration challenges and costs before they can do that.