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RISK MANAGEMENT

77% of financial execs expect blockchain for post-trade use within 5 years

Forty-eight percent of executives at banks, financial services firms, traders and government agencies said blockchain technology will be adopted for post-trade use in the next three to five years — and an additional 29% said the technology will be implemented within two years, according to a survey of members of the Post-Trade Distributed Ledger Group.

About half of the 45 group members surveyed in October and November said blockchain was an opportunity for them, while only 11% saw it as a threat, said a news release from the group released Monday.

Among other survey results:

  • 81% said operational cost savings will be a benefit of blockchain use in post-trade processes, while 67% said benefits would be seen on reduced settlement cycles and 43% said there’d be additional post-trade transparency.
  • 78% said the biggest hurdle to post-trade blockchain use is industry adoption, while 56% said regulation was an impediment.
  • Despite the overall view of blockchain benefits among respondents, only 20% said its use was “very high” in strategic importance at their firms or agencies.

“The survey shows that blockchain could become mainstream in just a couple of years, with benefits such as better transparency, shorter settlement cycles and cost savings clearly identified by our members,” Joern Tobias, managing director, Europe, Middle East and Africa product management, at State Street Corp. (STT), said in the news release. “The big barrier to growth, however, is seen as caution: fears over adoption and hesitation about embracing what remains cutting-edge technology.”

PTDL Group members include custodians, clearinghouses, exchanges, regulators, government agencies and central banks. Representatives from CME Group, Euroclear, HSBC, London Stock Exchange Group and State Street make up the group’s organizing committee.