Proper Implementation Of Blockchain Technology Might Revolutionize Transaction Banking


Reports from the study that was recently conducted by major global management consultancy firm Bain & Company indicates that Blockchain technology has all its takes to revolutionize transaction banking. Bain is optimistic that the banking area will undergo a major transformation in the future by employing the Distributed Ledger Technologies (DLT) such as blockchain.

A close outlook at transaction banking

Transaction banking revenues are fundamentally less volatile when brought into close comparison to the other forms of banking revenues. It is worth noting that the various bankers can cross-sell products and that is of paramount importance when it gets to the point of encouraging client loyalty.

There is great need to keep the credit risks as well as the liquidity on the low and for this to happen, the technology, the execution, clearing and settlement have to occur simultaneously. Reports indicate that the latest technologies have already started threatening custody as well as the credit risks.

From a study that was conducted recently by the consultancy firm, it came out clearly that the operating costs could be cut down by a significant margin by the blockchain tech. However, it would be necessary that it be adopted in the right way by the various participants in the trade ecosystem. These reductions would culminate from major increases in processing speed.

Dr. Christian Graf and his perspective

Dr. Christian Graf, a Bain partner and bank expert while addressing several journalists outlined that for over quite sometime they had been facing an almost similar upheaval to what happened with the telecommunications industry over a decade ago.

In his predictions, Graf stated that there were high chances the “small-scale, purely transaction-driven fee structures in future would most probably be replaced by flat fees for the delivery of elaborate solutions.

According to the official, benefiting from the competitive advantage will be determined by two factors-those banks that will move quickly with the adoption of the blockchain tech and the ones that will start early.

It was today that the senior research director at the Bank of Canada’s funds management and banking department came out clearly to criticize both the security and the effectiveness of employing blockchain for banking.