Blockchain Technologies Leverage Advances In Software
12 billion in annual cost benefits for those banks, according to a new survey by Accenture (NYSE: ACN) and McLagan which are part of Aon Hewitt, a small business unit of Aon plc (NYSE: AON). Blockchain is a type of database system that enables multiple parties to talk about access to the same data with a high level of self-confidence and security.
The findings of the statement, “Banking on Blockchain: A Value Analysis for Investment Banks,” are based on an analysis of granular cost data from the eight banks, as aggregated by McLagan, a high benchmarking company. Accenture’s insights on blockchain technology combined with McLagan’s data were put on Accenture’s POWERFUL Investment Bank or investment company model to recognize exactly where the worthiness could be performed.
“Capital markets establishments have experienced a perfect surprise of regulatory-compliance costs and income pressures in recent years, prompting them to purchase emerging technology as a lever to improve profitability,” said Richard Lumb, Accenture’s group leader – Financial Services. “Through this first-of-its-kind analysis of real-world cost data we attract a clearer series under blockchain’s value to investment banking institutions. Today, investment banks maintain their own 3rd party databases of transactions, customer information and other guide data.
To complete any deal, banking institutions need to reconcile and confirm their data with their counterparties and clients which are a complex, costly, and labor-intensive process that are prone to error. Blockchain technology leverage advancements in software, communications, and encryption that will enable investment banks to move from maintaining a separate, fragmented database framework to a shared, distributed data source that spans organizations. Blockchain technology supports a shared digital ledger of transactions recorded and verified across a network of individuals. Using the technology, transactions reside in a tamper-evident data structure that provides the necessary levels of data security and access for every user.
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By replacing traditionally fragmented data source systems that support purchase processing with a distributed ledger system, banks can reduce or eliminate reconciliation costs, while enhancing data quality. According to the report, this might bring significant cost savings for many of banking institutions’ core middle- and back-office processes. Business functions such as trade support, middle office, clearance, negotiation, and investigations could also lower their operating costs by 50 percent by reducing or eliminating the need for reconciliation, trade-break, and confirmation analysis.
Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, operations, and technology. McLagan provides compensation consulting, operational benchmarking, and best practice research over the financial services industry. McLagan combines 50 many years of thought leadership in strategy, performance, human being capital management, and settlement data with fact-based advice to make a customized solution specific to your organization. McLagan is part of Aon Hewitt, a small business device of Aon plc (NYSE: AON).
