A new report from Goldman Sachs Investment Research projects that the implementation of blockchain technology could streamline the clearing and settlement of cash securities, saving capital markets $2bn in the US and $6bn globally on an annual basis.
The figures are supported by breakdowns of the specific market areas where Goldman Sachs sees the technology as valuable, as it projects up to $900m could be saved in reduced personnel and $700m could be saved from IT systems improvements.
The report indicated that this projection is further limited to cash securities – specifically, equities, repo and leveraged loans – and that the savings could be greater. For example, Goldman Sachs foresees applications of the technology eliminating significant additional costs across the foreign exchange (FX), commodities and OTC derivatives markets.
Such estimates were part of a more than 80-page report issued by the multinational investment bank, which also provided estimates for the potential cost savings that could be reaped by organizations who use alternative implementations of the technology.
For example, it sees the use of blockchain-based identity management as creating up to $9bn in cost savings through 2020 in the peer-to-peer lodging industry by enabling the guests and hosts necessary to such business models to better manage disputes.
Elsewhere, the report examined the blockchain’s potential role in US energy markets, anti-money laundering (AML) and know-your-customer (KYC) compliance and in underwriting title insurance.
In addition to those three industries, the authors indicate that a $2.5bn to $7bn annual market could be developed by incumbents or innovators who help independent energy companies reach new markets. In compliance, it sees blockchain playing a role in reducing suspicious transactions, generating between $3bn and $5bn in cost savings. Finally, title insurance would see between $2bn and $4bn in savings through reductions in errors and manual processes.
However, most notably, the report called for […]
