Blockchain can help investment banks save $8bn per year, Accenture says
Accenture and operations benchmarking consultancy firm McLagan evaluate the applications of distributed ledger technology (DLT) in investment banking operations in the “Banking on Blockchain” report.
For the study, Accenture assessed 50 operational cost metrics from eight of the world’s largest investment banks aggregated by McLagan, against a proprietary model. This helped them pinpoint the areas where DLT could make the most impact, across the entire spectrum of front-to-back processes and operating metrics.
The report showed potential savings in the following areas:
- 70% savings in central finance reporting costs
- 30-50% savings in compliance costs
- 50% savings in centralised operations costs
- 50% savings in business operations costs
To put things in perspective, the report quantifies it all in USD terms: DLT can help investment banks save about $8 billion on a cost base of $30 billion, which is 27% across the eight banks included in the survey.
While these costs do not factor in the investment required to implement a solution based on DLT, it’s a ray of hope for an industry struggling to increase its margins.
The report concludes by urging organisations to address key questions and create an action plan. It recommends evaluating the strategy to take the business to the next level, aligning investment plans with new technologies, seeking to understand how the industry might transform, and exploring the full potential of human and technology resources.