Blockchain In Banking Market

Blockchain In Banking Market Overview

Global demand for Blockchain in banking is expected to grow at a CAGR of around 28% during the forecast period 2021-2031. Blockchain enabled transactions are able to eliminate third-party payment gateways allowing fast-paced financial communications.

The growth of the market can be attributed to the growing demand for increased transaction speed, scalability and reduction in processing costs in the banking sector. In addition, rising need to simplify business processes and increasing venture investments in blockchain technology is projected to offer lucrative opportunities to the market in the near future.

Furthermore, blockchain technology also allows banks to maintain a decentralized data, which is helpful in the prevention of cybercrimes, thereby further driving the market growth.  

What is Driving Demand for Blockchain in Banking Platforms?

The demand for blockchain technology in banking sector is expected to rise significantly owing to the increased need for transparency & accountability in financial transactions. Blockchain technology, in banking and financial services, has advantages such as enhanced security, improved efficiency, quick transaction time, and unchangeable records.

In 2017 and 2018, most of the banks have adopted blockchain technology as part of their strategy, which has also resulted in banks entering in partnerships with technology companies and fintech vendors to build and test blockchain applications in their operations. Moreover, the increased adoption of digital ledger, cross-border payments, and consortium blockchain are further contributing to their use.   

Fund Transaction Management is expected to Contribute Largest Market Share

The fund transaction management segment is anticipated to hold the largest share in 2021, whereas, the record keeping segment is anticipated to witness the highest CAGR over the forecast period. The demand for blockchain in banking and financial services for fund transaction is increasing as it is more programmable and easier to manage.

Blockchain offers multiple benefits for fund transaction management. It helps in streamlining processes, decreasing settlement times, reducing costs, digitization of processes and workflows, reducing operational risks of fraud, human error, making them programmable, and much offhand to manage and trade. This is estimated to fuel the market growth over the forecast period.

US Blockchain in Banking Industry Outlook

The growth in U.S. is attributed to the presence of major market players and on-going developments in blockchain technology in the country. The blockchain technology in banking provides cryptographic security and transparency which decreases the fraud in banks is set to rise the growth of the market in this region.

The U.S. economy is increasingly powered by big data, platform business models, advanced analytics, smartphone technology and peer-to-peer networks. At the same time, innovation in the financial sector is dramatically changing the markets.

Sudip Saha

Principal Consultant

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East Asia Demand Outlook for Blockchain in Banking

The market in the East Asia region is estimated to witness noteworthy growth over the forecast period on the back of increasing number of government initiatives to promote the usage of blockchain technologies in countries, namely Japan, China and South Korea, as a result of their high efficiency and transparency. Apart from this, growing bitcoin trade in China is another crucial factor expected to drive market growth in the region.

Banking sector in East Asia would benefit from the flexible economic conditions, industrialization, the globalization-motivated policies of the government, and the expanding digitalization in the region. In addition, strong banking capabilities, including digital offerings, strong financial positions, and digital structures, are expected to drive the growth of the digital banking platforms market in the region.

Who are the Key Blockchain in Banking Platform Providers?

Some of the leading providers of Blockchain in Banking include

• Microsoft Corporation
• Infosys Limited
• Hewlett Packard Enterprise
• Amazon Web Services Inc.
• IBM Corporation
• SAP SE
• Oracle Corporation
• JPMorgan Chase & Co.
• Accenture PLC
• AlphaPoint among others.

In June 15, 2021, 15 banks came together to form a new company to process inland letters of credit (LCs) using blockchain technology. The company named Indian Banks' Blockchain Infrastructure Co Pvt. Ltd. (IBBIC) about to have 15 shareholders holding an identical 6.66% stake in the business. These banks include four public sector, ten private sector, and one foreign bank.

The report is a compilation of first-hand information, qualitative and quantitative assessment by industry analysts, inputs from industry experts and industry participants across the value chain. The report provides in-depth analysis of parent market trends, macro-economic indicators and governing factors along with market attractiveness as per segments. The report also maps the qualitative impact of various market factors on market segments and geographies.

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Key Segments

By Component:

• Blockchain in Banking Platform
  • Cloud-based
  • On-Premises
• Services
  • Technology Consulting
  • Integration & Deployment
  • Support & Maintenance

By Type:

• Public Blockchain
• Private Blockchain
• Hybrid Blockchain
• Consortium Blockchain
• Others

By Application:

• Record Keeping
• Real Time Asset Tracking
• Digital Currency
• Fund Transaction Management
• KYC/Identity Management
• Others

By Region:

• North America
  • US
  • Canada
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Benelux
  • Russia
  • Rest of Europe
• East Asia
  • China
  • Japan
  • South Korea
• South Asia & Pacific
  • India
  • Malaysia
  • Indonesia
  • Singapore
  • Australia & New Zealand
  • Rest of South Asia & Pacific
• Middle East & Africa
  • GCC Countries
  • Turkey
  • South Africa
  • North Africa
  • Rest of Middle East & Africa