Survey Finds Blockchain and Cryptocurrency Spending is on the Rise in Financial Sector
In the financial services sector, organizations are now spending an average of $176.4 million per year on their blockchain and cryptocurrency projects. According to a recent survey of industry decision makers that our team commissioned, investments are largely fueled by an overwhelming confidence in the success of blockchain and cryptocurrency projects and belief in the positive benefits they will bring to businesses, governments and consumers.
The survey was initiated with the goal of shedding light on how blockchain and cryptocurrency adoption and innovation are shaping up within the financial sector. Questions covered the gamut from overall blockchain and cryptocurrency expectations and adoption, how organizations are using blockchain technology to differentiate, to top concerns and what stakeholders view as the most pertinent market trends. Findings were shared in a recently released report, The State of Blockchain Technology and Digital Assets in Financial Services: A Benchmark on the Disruption of an Industry.
What we found was a healthy developing sub-industry within financial services and fintech, wherein all organizations that have a blockchain program already in place consider it successful. Among the respondents who said they have placed high, significant or moderate priority on blockchain and cryptocurrency investments, five key drivers were identified. These include:
- Consumer demand for higher levels of trust, transparency and accuracy (60%)
- Investments have high growth potential (60%)
- Belief that most transactions will shift to blockchain/cryptocurrency in the future (59%)
- Infrastructure, transaction and administrative cost savings (53%)
- Consumer demand to support cryptocurrency transactions (49%)
With these drivers in mind, financial institutions are developing a range of new blockchain-based and cryptocurrency offerings. The large majority (81%) are focused on creating proprietary in-house technology and 62% have a complete offering or a dedicated team working on establishing infrastructure.
But in addition to enthusiasm, the report also revealed areas where risk or education gaps still exist. For example, several disparities between respondents’ risk awareness and practical risk management approach when implementing new blockchain and cryptocurrency infrastructure were revealed. Though the majority recognize there are privacy and security concerns, a notable amount still do not have a dedicated or robust process for evaluating security and privacy risk among technology and service providers or acquisition targets.
The Blockchain and Cryptocurrency Advisory practice at FTI Technology has worked with dozens of clients in the blockchain and cryptocurrency space as well as those with an emerging interest in it. Among most, including sophisticated early adopters of blockchain and cryptocurrency, our team has been sought to deliver unique subject matter expertise. We’ve been engaged to make sense of technical underpinnings, clarify the meaning of new terminology, advise on infrastructure and solve completely novel problems. Even though it’s advancing quickly, the sector is very much still in its infancy, and as with any category of innovation, progress will require continued and evolving education.
To learn more about these issues in-depth, and read more about the types of blockchain and cryptocurrency investments being planned in the financial sector, read the full report, The State of Blockchain Technology and Digital Assets in Financial Services: A Benchmark on the Disruption of an Industry.
The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, its management, its subsidiaries, its affiliates, or its other professionals.