The financial services industry may not be keen on cryptocurrency, but it’s definitively embracing blockchain as a whole, with a new study showing that the sector spent $1.7 billion on the technology just last year, and it’s only getting bigger.
This is where blockchain gets commercial.
According to U.S.-based Greenwich Associates market intelligence, budgetary spending for blockchain in the financial sector rose by an amazing 67 percent in 2017 to reach a spending level of $1.7 billion for the year.
It also showed that one in 10 of the 200 market participants interviewed had blockchain budgets of over $10 million. And of those institutions, 14 percent said they weren’t just spending on development; they have already deployed blockchain solutions.
Within the next two years, live blockchain products will be the norm, with the study showing that 75 percent of those projects in development will have been realized.
Last year, banks increased the number of dedicated staff for blockchain development, making it a job niche in and of itself. The study suggests that the average big bank now has close to 20 employees focused on this alone.
There have been other hints, as well, that blockchain has started down the path of true commercialization. And the financial services industry isn’t the only one with deep blockchain pockets—not even close.
IBM is in the middle of a revival that is underpinned by blockchain, its new savior. The tech giant saw its revenue dip for 22 quarters to December, and its recovery is now about getting in front of this new technology. It’s doing exactly that. Related: Will Russia Profit From The World Cup?
Last month, IBM announced plans to hire some 1,800 people—mostly blockchain researchers—at a new branch in France. It’s also launching blockchain pilot projects in everything from finance, health care, supply chain and logistics to the environment and humanitarian causes.
In fact, it’s become a blockchain leader in these early days, with a recent survey showing that 43 percent of enterprises rank IBM first in this area.
And blockchain hit a major milestone in May when a big player in the financial services sector made history.
British HSBC bank became famous for making the world’s first commercially viable trade finance transaction using blockchain. HSBC issued a letter of credit for Cargill using blockchain to facilitate the bulk shipment of soybeans from Argentina to Malaysia.
From here, it’s all downhill for blockchain even if it doesn’t happen overnight.
According to a recent blockchain trend report by Gartner, it will be slow but inevitable. Through 2022, around 10 percent of enterprises will have achieved some form of “radical transformation” through blockchain technology. By 2022, Gartner predicts, there will be at least one innovative business built on blockchain technology that will be worth $10 billion.
But by 2030, it’s all about blockchain: Gartner predicts that the business value added by blockchain will surge to more than $3.1 trillion.
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By Damir Kaletovic for Safehaven.com
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