Financial Services Industry Spends $1.7B A Year On Blockchain – Greenwich Associatesbr>
The financial services industry is investing $1.7 billion annually on blockchain technology, according to a new survey from market intelligence firm Greenwich Associates.
For the survey, Greenwich Associates conducted over 200 interviews with market participants covering blockchain budgets, team sizes, use case exploration, key challenges and other issues. The research group found that firms increased their blockchain budgets by 67 percent in 2017, and one in 10 banks and other firms reported spending more than $10 million. Likewise, the number of employees working on blockchain initiatives doubled last year.
“Headcount dedicated to blockchain initiatives doubled in 2017, as banks and other firms launched new proof-of-concept projects or shifted top product implementation,” the research group said. “The typical top tier bank now has about 18 full-time employees working on the technology.”
According to the study, 14 percent of the banks and other companies claim to have successfully deployed a production blockchain solution. Greenwich said cost reduction is the biggest driver of blockchain investment and development, surpassing motives such as revenue opportunities, settlement issues, and diminished risk and cost of capital.
“More than half the executives we interviewed told us that implementing DLT was harder than they expected,” said Richard Johnson, Vice President of Greenwich Associates Market Structure and Technology practice and author of the new report, Blockchain Adoption in Capital Markets—2018. “Nevertheless, more than three-quarters of projects currently under development are expected to be live within two years.”
In January of this year, the International Data Corporation reported that worldwide spending on blockchain solutions would increase to $2.1 billion in 2018 from $945 million in 2017, and will grow more than 80 percent year over year to reach $9.7 billion by 2021.