Santander InnoVentures, in collaboration with its partners Oliver Wyman and Anthemis Group, has released “The Fintech Paper 2.0″ research that states that using blockchain technology could allow banks to save as much as $20 billion.
Typically banks are not interested in Bitcoin, however they are interested in the software that runs the digital currency — the blockchain. The blockchain system is attractive to banks looking to accelerate their money transfer businesses, besides the technology has potential in other areas — distributed ledgers could be used for “smart contracts” when banks make loans, for example, recording who has borrowed what across a public network.
According to “The Fintech Paper 2.0″ research, it is only a matter of time before distributed ledgers become a trusted alternative for managing large volumes of data. It revolves mostly on how emerging fintech technologies, including the decentralized ledger behind digital currencies, could affect banks.
“We have internally identified 20 to 25 use cases where this technology can be applied,” Mariano Belinky, head of Santander InnoVentures, told during MoneyConf in Belfast on June 15-16 this year.
“We are very excited about distributed ledgers and blockchain technology. They really have the potential to disrupt many of the basic processes we have underlying our transactional products,” she added.
As we know, blockhain refers to the public ledger of bitcoin transactions, which is updated by a network of computers solving complex algorithms to for verification. For every successfully verified transaction, a block of code is added to the blockchain, which makes it more secure and abiding.
“The first major application is being seen in payments. International payments remain slow and expensive and significant savings can be made by banks and end-users bypassing existing international payment networks,” the research indicated.
Banks could make use of the blockchain instead of having to rely on clearing houses to verify transactions. The