Some 80 per cent of bankers expect to see the commercial adoption of blockchain by 2020, with half of financial institutions already investing or planning to invest in the technology in 2017, according to a new report from Infosys Finacle.

The Blockchain Technology: From Hype to Reality study surveyed 100 senior business and technology leaders from 75 financial institutions worldwide, finding that a third of respondents expect to see commercial blockchain adoption by 2018, while a further 50 per cent expect adoption of the technology to take place by 2020.

According to the survey, the average FI investment in blockchain projects in 2017 is expected to be around $1 million, while four per cent have invested more than $10 million. Seven in 10 banks are experimenting with permissioned blockchains, with half of those surveyed either working with a FinTech startup or technology firm to enhance their blockchain capabilities. A further 30 per cent are opting for the consortium model.

The improvement of transparency, automation of processes, and reduction in settlement and transaction times were the top priorities for financial institutions investing in blockchain. The most preferred use cases are cross-border payments, digital identity management, clearing and settlement, and invoice financing.

Sanat Rao, chief business officer and global head of Finacle, said: “This research reaffirms our belief that blockchain technology has potential to help banks reimagine banking processes. The technology can help banks automate inter-organisation processes, significantly improve transparency and reset existing operational benchmarks.

“Several progressive organisations have already executed pilots to validate these propositions. We believe, in the coming quarters, the industry will experience greater momentum towards rolling out lab pilots to real-life use cases.”

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