This story was delivered to BI Intelligence "Fintech Briefing" subscribers. To learn more and subscribe, please click here.The newly released report aimsto give "a clear view into how financial service functions can be reimagined" through the implementation of distributed ledger technology, commonly known as blockchain.In addition to deep dives into how blockchain could be applied in a number of areasincluding trade finance, automated compliance, and global paymentsthe report has six key findings:It's about improving processes: Blockchain technology can greatly improve efficiency and simplicity in financial services infrastructure.It won't solve everything: Instead, blockchain should be viewed as one piece in the new foundation of financial services technology.But it's not a one-trick pony either: There are many use cases for the technology. Each will require a particular implementation, and yield different benefits and challenges.Identity is the key: Blockchain's capacity for creating unique units of digital property is what will allow it to expand into new areas such as digitizing fiat currencies.Collaboration will be critical:What's going to hold back the rollout of blockchain technology is that many implementations will require collaboration between legacy players, disruptors, and regulatorswhich is time-consuming. The irony is that a big part of the value of blockchain technology itself is its ability to automatically achieve consensus between stakeholders.It's going to be disruptive: If blockchain is going to be a component of the new foundation of financial services, it's naturally going to "call into question orthodoxies" and "redraw processes."The report findings aren't conjecture. Over $1.4 billion has been invested in blockchain technology in the past three years, with over 90 firms participating in blockchain groups, and over 90 central banks discussing how to implement blockchain. The report itself is the result of a year of research conducted by WEF and partner Deloitte, and includes input from investment and retail banks, startups, and central banks around the world.Blockchain technology is gaining steam among finance firmsbecause of itspotential to streamline processes and increase efficiency. The technology could cut costs by up to $20 billion annually by 2022, according to Santander.That's because blockchain, which operates as a distributed ledger, has theability to allow multiple parties to transfer and store sensitive information in a space thats secure, permanent, anonymous, and easily accessible. That could simplify paper-heavy, expensive, or logistically complicated financial systems, like remittances and cross-border transfer, shareholder management and ownership exchange, and securities trading, to name a few. And outside of finance, governments and the music industry are investigating the technologys potential to simplify record-keeping.As a result,venture capital firms and financial institutions alike are pouring investmentinto finding, developing, and testing blockchain use cases. Over 50 major financial institutions are involved with collaborative blockchain startups, have begun researching the technology in-house, or have helped fundstartups with products rooted in blockchain.Jaime Toplin, research associate for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on blockchain technology that explains how blockchain works, why it has the potential to provide a watershed moment for the financial industry, and the different ways it could be put into practice in the coming years.Here are some key takeaways from the report:Spending on capital markets applications of blockchain is expected to grow at a 52% compound annual growth rate (CAGR) through 2019, according to Aite Group, to reach $400 million that year.Banks and major financial institutions are working both collaboratively and independently to develop blockchain tech.Over 50 major financial institutions are involved with collaborative blockchain startups, like R3 CEV or Chain. And many are investing in the technology on their own as well.Putting blockchain to use for real-world transactions is likely not that far off.Ifworking groups' tests are successful, firms could be using it to transact real value as early as the end of this year and we could seewidespread industry application within the next few years.In full, the report:Examines the funding increases that are pouring into blockchainAssesses why blockchain is becoming so popular and what factors are driving up increased research and developmentExplains in full how blockchain technology work and what assets make it valuable and vulnerableIdentifies pain points in the financial industry and profiles how various firms are using blockchain to solve themDemonstrates the challenges to mainstream adoption and their potential solutionsTo get your copy of this invaluable guide, choose one of these options:Subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND over 100 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> START A MEMBERSHIPPurchase the report and download it immediately from our research store. >> BUY THE REPORTThe choice is yours. But however you decide to acquire this report, youve given yourself a powerful advantage in your understanding of blockchain technology.Join the conversation about this story
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