The global financial services industry spent $1.7 billion to develop blockchain technology solutions last year, as banks and other firms move beyond the proof-of-concept stage and start rolling out commercial distributed ledger technology products, according to a new report.
The report by U.S.-based market intelligence firm Greenwich Associates signals the growing investments being made by financial institutions on blockchain technology over the past two years. In a survey published in early 2016, the firm estimated that total spending by financial and technology firms on blockchain could reach $1 billion.
The report, titled "Blockchain Adoption in Capital Markets—2018," says 67 percent increase has been recorded in banks' individual budgets to adapt to the blockchain technology in 2017.
One tenth of the banking institutions reported that their budgets for areas such as blockchain research and product development had grown to $10 million or more in 2017.
Richard Johnson, Vice President of Greenwich Associates Market Structure and Technology practice, is the author of the report. He prepared the report based on more than 200 interviews with market participants covering blockchain budgets, and other issues.
Human resources dedicated to blockchain initiatives doubled in 2017, as banks and other firms launched new proof-of-concept projects or shifted top product implementation. The typical top tier bank now has about 18 full-time employees working on the technology.
Fourteen percent of the banks and other companies in the study claim to have successfully deployed a production blockchain solution. Payments and trade finance are the businesses targeted most frequently.
Cost reduction has emerged as the biggest driver of blockchain investment and development for financial service firms.
"More than three-quarters of projects currently under development are expected to be live within two years," said Richard Johnson.
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