How Blockchain is transforming the Financial Services Industry

Financial services would be one of the most transformative areas of blockchain. Building cryptocurrency exchanges and writing digital assets to a blockchain are just two examples of how today’s progress will have a long-term impact on the industry. The use of blockchain technology has the potential to cause significant market disruption. Incredible progress has already occurred, and this is just the beginning of a massive transformation.

Definition / Scope
Market Overview
Market Risks
Market Drivers
Market Restraints
Industry Challenges
Technology Trends
Regulatory Trends
Other Key Market Trends
Impact of COVID-19
Market Size and Forecast
Market Outlook
Technology Roadmap
Competitive Landscape
Competitive Factors
Key Market Players
Strategic Conclusion
References

Definition / Scope

Blockchain technology provides a way for untrusted parties to come to agreement on the state of a database, without using a middleman. A blockchain may offer basic financial services such as payments or securitization without the need for a bank by offering a database that no one manages. Furthermore, blockchain enables the use of tools such as “smart contracts,” which are self-executing contracts built on the blockchain that have the ability to automate manual processes ranging from enforcement and claims processing to the distribution of the contents of a will.

Blockchain technology and DLT have a massive opportunity to disrupt the $5T+ BFSI industry by disintermediating the key services that banks provide, including:

Payments: Blockchain technology could allow faster payments at lower rates than banks by creating a decentralized ledger for payments (e.g., Bitcoin).

Clearance and Settlement Systems: Distributed ledgers have the potential to lower operating costs and get us closer to real-time financial transactions.

Fundraising: Initial Coin Offerings (ICOs) are a modern type of finance experiment that separates access to capital from conventional capital-raising services and companies.

Securities: Traditional securities, such as stocks, shares, and alternative assets, may be tokenized and placed on public blockchains, allowing for more accessible and interoperable capital markets.

Loans and Credit: Blockchain technology can make borrowing money more safe and have lower interest rates by eliminating the need for gatekeepers in the loan and credit industry.

Trade Finance: Blockchain technology can improve transparency, protection, and confidence among trade parties around the world by replacing the inefficient, paper-heavy bills of lading mechanism in the trade finance industry.

Customer KYC and Fraud Prevention: Blockchain technology will make it simpler and safer to exchange information between financial institutions by storing customer information on decentralized blocks.

How do Blockchains Work?

Blockchains require complex algorithms to ensure they are secure, but their application is relatively straightforward. Ledgers, or blocks, are represented as cryptographic codes, or hashes, which record the transactions in the system. Transactions in the intermediated world are validated by banks, which guarantee ownership of money and ensure it is not expended more than once in the case of payments. Blockchains do this by relying on a network of participants to verify and transparent transactions by solving complex algorithmic puzzles.

Conformance is enforced by checking transactions against the present state of the ledger, and the effect is the elimination of much of the credit, liquidity and operational risks inherent in the intermediated system.

Market Overview

Blockchain is a term in financial technology that has gotten a lot of attention recently (FinTech). Distributed data storage, point-to-point transfer, consensus processes, and encryption algorithms are among the computer technologies used. It has also been labelled as a transformative Internet-era breakthrough. However, since blockchain is a significant advancement in data storage and processing, it has the potential to radically change current financial and economic operating models, resulting in a new wave of technical innovation and industrial transformation within the FinTech industry.

International organizations, such as the United Nations and the International Monetary Fund (The First Digital Currency Report of the International Monetary Fund [EB/OL]), as well as developed countries including the United States, the United Kingdom, and Japan, have recently paid close attention to the growth of blockchains and examined their application in a variety of fields.

Furthermore, China, Russia, India, South Africa, and other countries have all launched blockchain research in the past few years. In 2019, the South Korean government announced an investment of USD 880 million in blockchain development projects.

Since blockchains are decentralized and permissionless, they have the potential to cause significant disruptions in the financial sector, especially in payment clearing. A number of major international financial institutions have been developing plans for the blockchain sector since 2015.

Goldman Sachs, J.P. Morgan, UBS, and other banking behemoths have all set up their own blockchain labs, working closely with blockchain networks and publishing a slew of reports on the subject. Goldman Sachs has also filed a patent for blockchain-based transaction settlement.

Various national stock exchanges, including the Nasdaq Stock Market and the New York Stock Exchange, have also performed extensive blockchain analysis. Nasdaq announced on December 30, 2015 that it had completed its first securities transaction using the Linq blockchain transaction platform. In addition, the US Depository Trust & Clearing Corporation, Visa, the Society for Worldwide Interbank Financial Telecommunications, and others have increased their investments in blockchain technology.

There has also been a lot of excitement about the potential of blockchain in the banking industry. In a survey of global banking executives conducted by McKinsey it was discovered that roughly half of the executives believe blockchain will have a significant effect within three years, with some also believing it will happen within 18 months. According to a study of 200 global banks, 15 percent of banks will be using blockchain technology extensively by the following year. Furthermore, IBM predicts that 66 percent of banks will have commercial blockchain at scale in four years.

Market Risks

Legal Risk: The legal structure that supports PCS has been tailored to the position of an intermediary or mechanism. If an agent carries the legal risk of settlement and can be avoided with blockchain, laws and regulations, which have a history of lagging behind innovation, may need to change. One of the most significant factors influencing the pace and method of blockchain adoption is the legal and technical mismatch.

Settlement Risk: Settlement risk is a significant risk in PCS, characterized as the expectation of a financial transaction completing as agreed. There is a legally determined point at which a transaction becomes irreversible. Due to the aforementioned centralized control and ability to make adjustments, as well as the possible lack of a financial intermediary that might have mitigated risk in the old model, private blockchains may present a greater challenge in defining settlement. New ways of settlement would necessitate changes to the legal system.

Technology Risks

Key management Risk: The method for managing digital assets on blockchains is private key management, which involves obtaining a digital signature. Ownership of assets is characterized in this context by ownership of private keys. End users can now choose whether they want full control and custody of their digital properties or anything in the middle, which has never been possible before.

Third-party financial institutions exercise responsibility and control of assets on behalf of shareholders in the conventional financial model. As a consequence, the risk of an end user failing to handle his or her keys, resulting in the complete and permanent loss of those properties, is known as key management risk.

Code and Cryptography Risk: Regardless of one’s level of trust in a new technology, it should be checked to ensure that the systems are functioning properly. The right level of assurance necessitates a high level of technological competence, which is in short supply right now. Before, during, and after deployment, blockchain projects must test their own code for bugs. The risk of using a poor encryption method without a sufficient amount of randomness to achieve the desired degree of protection can result in exploitation, or the underlying code may not be properly audited by developers, failure to test the code, and a hurry to implement may result in significant financial loss.

Top Market Opportunities

Trade finance

The lifeblood of global trade is trade finance. The global trade financing deficit, according to the International Chamber of Commerce, is estimated to be about $1.6 trillion, with especially dire implications for small and medium-sized enterprises and emerging market growth.

Financial institutions fill the gap between exporters who need payment guarantees before they can ship and importers who need information about whether products have been shipped in this section. Approximately $18 trillion in annual trade is financed in some way, whether by credit, insurance, or guarantee. The trade finance sector is worth more than $10 trillion per year. However, the supply chain management system is inefficient and time-consuming.

By bringing accountability, traceability, and immutability to supply chains, blockchain will positively transform trade finance. Using distributed ledger technology to store financial information can help to deter documentary fraud, make real-time approval of financial documents easier, free up capital stuck in the clearance process, lower counter-party risk, and speed up settlement.

Trade finance is one of the financial services segments that has struggled to keep up with technical advancements and digital evolution; however, blockchain technology has the potential to bring about a necessary transformation. The existing legal situation in trade finance may be moved to the blockchain, resulting in increased legal certainty. True innovation potential exists in the technical capabilities of delivering confidence, security, risk mitigation, and quick processes at low cost.

Global payments (remittances) Payments across international borders are ripe for disruption. Individual customers and small and medium-sized businesses are currently subjected to high transaction costs, lengthy delays, and confusion when making cross-border payments. Transferring Funds Western Union, MoneyGram, and Euronet Worldwide, for example, have spent decades developing franchise companies all over the world. The market is also large, with remittances estimated to be worth more than $601 billion in 2016. Fees in the global remittance industry now total $40 billion a year.

Depending on the volume of the corridor, such fees usually range from two to seven percent of the overall transaction value, plus foreign exchange fees represent 20 percent of the total cost. Bank wire transfers are much more costly, with fees ranging from 10% to 15%. Banks often appear to concentrate their efforts on particular corridors with a strong branch network, leaving certain corridors without the money transfer services they need.

Blockchain technology could be used to solve current problems with the correspondent banking system and international money transfers in the area of payment transactions. Excluding third parties, direct money transfers, and effective interbank settlements could reduce the fee-intensive and fragmented processes of cross-border, non-cash transactions. The ability for a dynamic marketplace of liquidity providers to ensure the best exchange rates for foreign exchange and payment transactions.

Over the Counter (OTC) market

Blockchain technology has the potential to restructure the OTC market system and eliminate redundant market participants. Smart contracts that automate the execution of OTC agreements may be able to save a lot of money. Customers would no longer have to rely on their brokers if direct trades could be conducted without the involvement of trusted third parties. The technology has the potential to reduce settlement risks by allowing for nearly instantaneous settlements and avoiding T+3 day settlement times.

Market Drivers

Blockchain enables faster and less expensive payments

With little or no intermediaries, blockchain technology can allow direct and secure payments both domestically and internationally. Furthermore, blockchain will streamline the process and, as a result, greatly reduce costs. Another significant advantage is that it reduces transaction time from hours to seconds.

According to Jupiter Research, by the end of 2030, blockchain implementations will allow banks to save up to $27 billion on cross-border settlement transactions, reducing costs by more than 11%.

Surging Demand for Increased Scalability, Transaction Speed, and Reduction in Processing Costs

With its improved cryptographic protection and transparency, blockchain technology is transforming the banking and finance field. Financial institutions are estimated to be susceptible to financial crimes on a daily basis, which is one of the main reasons why banks and financial institutions are turning to blockchain solutions. Blockchain transactions will remove the need for third-party payment gateways, allowing for faster financial transactions. As a result, such factors are expected to provide significant market growth opportunities in the coming years.

Furthermore, blockchain is well-known for its improved security, as it provides cryptographic security for its databases and transactions, which is a key factor that increases transparency and reduces fraud, and is expected to drive market growth.

Increase in need for Transactions Transparency and Accountability

By replacing intermediaries with encrypted digital records, blockchain technology reorganizes transaction management. Furthermore, it helps all stakeholders in the banking network to exchange and agree on critical business details and transactions.

It also provides faster transaction processing speeds as well as transaction and information traceability to all network participants, indicating that the blockchain is expected to expand in the BFSI industry. Furthermore, blockchain is well-known for its improved security, as it provides cryptographic security for its databases and transactions, which is a key factor that adds transparency and reduces fraud, and is thus expected to grow in popularity.

Greater Adoption in Cross-border Payments

The global payments system’s architecture boundaries, as well as a variety of policies and processes, are major drivers for blockchain in the BFSI industry. According to a survey of 300 professionals from foreign companies, 64 percent of respondents want real-time payment monitoring, while 42 percent want instant payments. Increased transaction speed provided by blockchain technology aids in the creation of an effective and real-time global payment system that supports monetary policy, other compliances, and privacy.

Market Restraints

High Costs Involved at Initial Stage

Due to its multi-tasking capabilities through multiple applications, the blockchain technology market is rising at a rapid rate. To establish specialized infrastructure and architecture, large amounts of venture capital funds and investments are needed. The method of setting up and ensuring operability, on the other hand, is much more complicated and necessitates the use of skilled personnel.

This method also uses a lot of bandwidth, electricity, data centres, network components, cooling systems, and other resources. Since blockchain technology is still in its early stages, there are only a few startups and businesses that provide it. Uncertain regulatory and government requirements, as well as a lack of funds and investment, could stymie their progress.

Scalability

The blockchain industry’s ability to handle a large number of users at once remains a challenge. To process a single transaction, blockchain technology uses many complex algorithms. The total number of coinbase users was estimated to be 56 million as of Q4 FY’ 2021. The average transaction has risen significantly as more people have become used to it. It has a significant impact on transaction processing speed because a larger number of people means more machines writing and accessing the network, resulting in a more cumbersome system overall.

Privacy

Blockchain is an open ledger that can be used by anyone. In certain instances, it is essential, but when used in a sensitive setting, it becomes a liability. Blockchain technology also has a long way to go until it is widely accepted. The ledger needs to be redesigned in such a way that it can only be accessed by those who are allowed to see it.

Industry Challenges

Limited Awareness about blockchain

The lack of knowledge of blockchain in the banking vertical is one of the major roadblocks to its growth in the BFSI market. Blockchain is mostly unknown, and its reputation has been tarnished by the unregulated cryptocurrency sector. Businesses interested in blockchain should potentially set up an internal team to learn about the technology, its implications, and potential applications. Blockchain is thought to be a complete technology that would eventually replace current ones. This confusion has also hampered its implementation.

Complex to understand and adopt

The nuances of blockchain technology make it difficult for a layperson to grasp and appreciate its benefits. Before jumping into this ground-breaking programme, one must first read it and grasp the concepts of encryption and distributed ledger. Another factor that makes blockchain difficult to implement is that, in comparison to the costs associated with blockchain, financial institutions are capable of providing safe payment gateways and other services at reasonable rates.

Technology Trends

Technology has been a disruptive factor in the digital era, some of the emerging trends in the Blockchain in BFSI Market include

Blockchain As A Service

BaaS, or Blockchain As A Service, is one of the newest blockchain trends. BaaS is a recent blockchain trend that has already been adopted by a variety of businesses and startups.

BaaS is a cloud-based service that allows users to create their own digital products using blockchain technology. The majority of these digital goods are smart contracts or frameworks that can function without the need for a full blockchain-based system to be set up. Microsoft and Amazon are only a couple of the well-known companies working on blockchain technologies that offer BaaS.

Ricardian Contracts

A Ricardian contract is a human-readable legal document that is also negotiated upon and signed by all parties to the contract. Following that, it is translated into a machine-readable contract that clearly specifies the parties’ stated intentions.

The Ricardian contract’s flow will easily automate operations on various blockchain applications that use this technology. Ricardian contracts are smart contracts that can be read by both computers and humans.

Hybrid Blockchains

In the blockchain world, hybrid blockchain is a new idea. It can be described as a blockchain that tries to combine the best features of both public and private blockchain solutions. Hybrid blockchain runs in a closed environment, ensuring the security of all data on the network.

Transaction costs are said to be much lower in hybrid blockchains because the network’s powerful nodes make the process of verifying transactions easy and fast. Another benefit is that it defends against more than half of all threats because hackers are unable to gain access to the blockchain network.

Regulatory Trends

Governments Will Tighten Regulations Related to Blockchain

Regulators will intensify their quest for tougher and tighter control in 2021 and beyond, as a final pattern. After a long absence, policymakers around the world will undoubtedly introduce a slew of fintech legislation in the coming years. The growing digitalization of the economy, sparked by the COVID pandemic, is now being closely monitored by regulators around the world. The most pressing issues would most definitely be digital finance, cryptocurrencies, and blockchain.

When the number of financial transactions take place outside of conventional institutions and processes, regulators can no longer disregard issues like DEFI. Meanwhile, policymakers in the European Union are working to establish a European-wide regulatory framework for crypto assets markets, which will include the proliferation of token investments as a sophisticated investment mechanism.

Other Key Market Trends

Some of the other significant trends witnessed in the Blockchain in BFSI Market include:

An Expected Rise of Federated Blockchains

Federated Blockchain is, in fact, one of the most promising blockchain trends currently available. It’s just a more advanced version of the simple blockchain model, which makes it ideal for a variety of applications. Instead of following a single stable, trustworthy node, the federated blockchain works under multiple authorities.

According to experts, the use of federated blockchain would increase in 2021 since it offers private blockchain, a more personalized outlook. Federated blockchains are conceptually similar to private blockchains, but with a few additional features. Unlike private blockchain, which is operated by a single entity, federated blockchain allows multiple authorities to manage pre-selected nodes. This chosen group of nodes will validate the block in order to continue processing the transactions.

Blockchains Will Establish Secure Digital Identity

Digital identity solutions will assist us in securing our online presence and reducing online fraud and identity theft significantly. Data is stored in a decentralized, trusted, and immutable manner using blockchain technology.

A user’s single digital identity can be maintained in a safe and incorruptible manner using blockchains. This single digital identity can always be updated with the most up-to-date user data. Online networks are developing and integrating a number of digital identity solutions. This pattern is expected to continue this year.

Impact of COVID-19

Covid 19 Will Continue to Accelerate Enterprise Blockchain Adoption

The lockdowns and restrictions imposed by the Covid-19 pandemic have had an impact on every business. One advantage of the pandemic is that it has compelled companies to rethink their systems and digitize their activities in order to keep their day-to-day operations running. Managers also understood the importance of embracing new technology and incorporating them into their activities sooner rather than later.

Defense, smart contracts, instant auditability, and trust have all been identified as requirements by businesses. Blockchain technology can aid in the delivery of solutions that promote trust and accountability. Blockchain databases and features in the solution will continue to be used by businesses.

Market Size and Forecast

Blockchain in Financial Services Industry is valued at US$ 1.44 Billion in 2020 and is poised to grow at a CAGR of 74% in the forecast period (2020 – 2025) to reach a Market Size of US$ 23 Billion in 2025.

Increased demand for transaction transparency and accountability via GRC Management Solutions, increased adoption of cross-border payments, digital ledger and consortium blockchain, and increased bank investment in blockchain-based solutions all contribute to the global blockchain in the BFSI industry’s growth.

Furthermore, increased demand from emerging economies, as well as increased demand for increased scalability, transaction speed, smart contracts, and lower processing costs, are expected to generate a range of Blockchain opportunities in the BFSI sector in the near future.

Market Size based on Application

The payments segment of Blockchain dominated the Finance industry in 2020, accounting for over 44% of global sales. Blockchain technology increases the reliability of payment systems, lowers operating costs, and increases transparency. These advantages of blockchain technology are driving the segment’s growth by growing its use in payment solutions. At the same time, blockchain eliminates the need for middlemen in payment processing, which is a major driver of the segment’s development.

The payments segment generated revenues of US$ 634 Million in 2020 and is expected to grow at a CAGR of 68% to reach a Market Size of US$ 8.48 Billion in 2025.

The smart contracts segment is expected to grow at the fastest rate in the forecast period. Smart contracts distributed over a blockchain network have irreversible terms and conditions. Third parties can’t tamper with or hack the data in contracts thanks to blockchain technology. As a result, businesses in a variety of industries are implementing blockchain-based smart contracts to cut down on the costs of implementation, authentication, fraud prevention, and arbitration.

The Smart Contracts segment accounts for 16% of the Market Share and is expected to attain a market value of US$ 4.6 Billion in 2025 from a valuation of US$ 230.4 Million in 2020 growing at a healthy CAGR of 82%

Digital Currency segment was valued at US$ 316.8 Million in 2020 and is poised to grow at a healthy CAGR of 80% to reach a Market Size of US$ 5.99 Billion in 2025.

Record Keeping segment contributed 11% of the market share and is projected to grow at a CAGR of 74% to reach a Market Size of US$ 2.53 Billion in 2025 from a value of US$ 158.4 Million in 2020

Compliance Management segment attained a Market value of US$ 72 Million in 2020 and is expected to grow at 72% to reach a Market Size of US$ 1.08 Billion in 2025.

The other segments generated to the range of 28.8 Million in 2020 and is poised to grow at a CAGR of 77% to reach a Market Size of US$ 500 Million in 2025.

Market Size based on End User

In 2020, Banking segment dominated the industry, accounting for more than 60% of global sales. Blockchain technology is used in banking segment to manage financial transactions in companies. The market for blockchain technology in banking segment is being driven by the technology’s ability to provide safe and efficient transactions.

Because of factors like increasing cryptocurrencies, strong compatibility with the business ecosystem, rapid transactions, and lower overall cost of ownership, the technology is expected to be widely adopted in this vertical.

Banking segment contributed to about US$ 864 Million in 2020 and is projected to grow at a CAGR of 74% to reach a Market Size of US$ 13.78 Billion in 2025.

Insurance segment accounted for 32% of the Market Share and generated revenues to the range of US$ 460.8 Million in 2020 and is expected to grow at a CAGR of 69% to attain a Market Value of US$ 6.35 Billion in 2025.

The NBFC (Non-Banking Financial Services) segment was valued at US$ 115.2 Million in 2020 and is poised to reach a Market Size of US$ 1.68 Billion in 2025.

Regional Analysis

North America dominated the Blockchain in BFSI industry, accounting for over 38% of global revenue. Organizations in the area are increasingly adopting blockchain technology, which is propelling regional business growth. Payment and wallet applications, smart contracts, and digital identity identification solutions are being implemented in industries such as government, retail, and BFSI, necessitating the use of blockchain technologies. In addition, the emergence of a large number of players in the area is boosting regional market development.

North America held market share of 38% and totaled US$ 547.2 Million of total revenue in 2020 and is projected to grow at a CAGR of 66% to reach US$ 6.9 Billion in 2025

Asia Pacific is projected to grow significantly in the forecast period. In recent days, governments in countries such as China, Japan, and India have pushed for the use of blockchain technology. The governments of these countries are encouraging the use of blockchain because of the benefits it provides to a variety of industries, including improved transparency and productivity. For example, the South Korean government announced a USD 880 million investment in blockchain development projects in 2019.

APAC accounted for 25% of the market share and attained a valuation of US$ 360 Million in 2020 and is projected to grow at a CAGR of 78% to reach a Market Size of US$ 6.43 Billion in 2027.

Europe attained a Market Size of US$ 317 Million in 2020 and is estimated to grow at a CAGR of 73% to reach a valuation of US$ 4.91 Billion in 2025.

South America is witnessing significant growth rate of 75% and it accounted for 10% of the market share and market size of US$ 144 Million in 2020 and is expected to reach US$ 2.36 Billion in 2025.

Middle-East & Africa constitutes 5% of the market share and generated revenues of US$ 72 Million in 2020 and is expected to grow at a CAGR of 74% to reach US$ 1.15 Billion in 2025.

Market Outlook

Blockchain in Financial Services Industry is pegged at a valuation of US$ 1.44 Billion in 2020 and is poised to grow at a CAGR of 74% in the forecast period (2020 – 2025) to reach a Market Size of US$ 23 Billion in 2025. Blockchain technology in BFSI is expected to see the most investment in the coming years. Due to its intriguing characteristics such as redundancy, decentralization, and transparency, these factors are likely to drive blockchain adoption across a wide range of industries, from financial services and insurance to non-bank financial institutions (NBFIs).

For solving issues associated with conventional options, the blockchain technology is expected to see increased demand and investment across different applications and industry verticals, allowing businesses to gain an advantage over rivals. Technology has been ingrained in both business-to-business and business-to-consumer transactions, goods, and services.

Despite some skepticism, Blockchain technology is poised to gain greater acceptance in the post-pandemic period among Banking, Financial and Insurance services firms. By 2023, the technology is expected to receive a significant investment of $14.4 billion worldwide thereby providing plethora of opportunities for Market Participants.

Technology Roadmap

Blockchain is becoming more widely recognized as a game-changing technology that has the potential to disrupt industries by allowing process efficiencies, cost optimization, and the creation of new operating and revenue models. According to Everest Group report, the financial services sector has accounted for nearly 60% of all blockchain use cases since the technology’s inception with the cryptocurrency bitcoin. FX settlement, real-time payments, OTC derivatives clearing, P2P lending, cross-border lending, compliance reporting/audit, bond issuance, P2P insurance, trade finance, KYC as a public utility, event-driven insurance, and core banking are some of the use cases of blockchain in financial services.

Between 2009 and 2018, the enterprise blockchain adoption storey was promising, with financial services seeing the most adoption. There have been significant investments in developing proofs of concept and forming consortia, which have laid the groundwork for scaling blockchain adoption.

In 2018, there was a lot of progress from proofs of concept to live blockchain deployments, particularly in financial services, where more than 22% of the PoCs made it to the live deployment stage. Leading technology firms’ Blockchain-as-a-Service offerings have further prepared market participants for adoption. Including the fact that adoption is on the increase (as shown in the diagram below),

Competitive Landscape

The Competitive Landscape of the Blockchain in BFSI market is highly fragmented. To reinforce their market positions, market players are focusing on alliances, product innovation, research and development, and geographic expansion. Circle Internet Financial Limited, for example, completed the acquisition of SeedInvest, an equity crowdfunding site, in March 2019. The purchase was made with the intention of launching a token marketplace that would enable individuals and businesses to raise capital and engage with investors using open crypto infrastructure.

Market players are also concentrating on improving their product offerings in order to better respond to changing consumer needs and remain competitive. For example, IBM Corporation announced the launch of a cloud solution for blockchain networks in July 2016. Against hacking, counterfeiting, and other risks, this cloud solution ensured the protection of asset transactions.

Key Market Developments

In March 2020, Alphapoint successfully raised $5.6 million in a new investment round, bringing its total capital raised to $23.9 million. New trading features, such as enhanced margin trading and liquidity solutions, as well as advanced brokerage capabilities, will be developed with the latest investment.

In February 2020, Microsoft incorporated Lition blockchain into Azure, allowing Microsoft Azure’s global enterprise clients to easily build, test, and deploy Lition side chains and applications on its platform.

In January 2020, IBM and Digital Asset Holdings (DAH) upgraded the Hyperledger Fabric. Smart contracts can be written in commonly used programming languages that support Ethereum’s Solidity smart contract language, such as Go, Java, and Javascript.

Competitive Factors

Players in the Blockchain in BFSI Market use a variety of strategies, including product launches, acquisitions, and R&D. Major companies such as Alphapoint, Auxesis Group, Amazon Web Services, Inc. (AWS), Bitfury Group Limited, Hewlett Packard Enterprise Development LP (HPE), International Business Machines Corporation (IBM), Infosys Limited, Microsoft Corporation, Oracle Corporation, and SAP SE are expected to dominate the blockchain in BFSI driver market.

Key Market Players

The Key players in the Blockchain in BFSI Market include:

AlphaPoint, based in New York, is a blockchain and financial services technology firm. The firm creates and distributes a white label trading software platform for digital asset transactions, brokerages, liquidity, digital asset wallets, and asset tokenization.

Auxesis Services and Technologies provides enterprise blockchain and distributed ledger solutions to its clients. The company’s range of services includes idea evolution, technology, cyber security, development, maintenance, and funding. Auxesis Services and Technologies was founded in 2014 by Kumar Gaurav and is based in Mumbai and London.

Bitfury is the leading full-service Blockchain technology company and one of the blockchain ecosystem’s largest private infrastructure providers. Bitfury creates and distributes both software and hardware solutions that allow companies, governments, organisations, and individuals to safely transfer assets through the blockchain.

Strategic Conclusion

Blockchains have the potential to upgrade and change the underlying technology of payment clearing and credit information systems in banks. Blockchain implementations also encourage the creation of “multi-center, weakly intermediated” scenarios, which will improve the banking industry’s efficiency.

It’s worth noting that regulatory, performance, and protection issues have often ignited heated debate during the development of new financial innovations. Present roadblocks, on the other hand, will not stop history, as the technological, regulatory, and other issues surrounding blockchain technology will eventually be resolved. As a result, the possibility of incorporating blockchain technology into the financial services segment is promising.

References

Appendix

OTC – Over the Counter
BFSI – Banking, Financial Services and Insurance
DAH – Digital Asset Holdings
ICOs – Initial Coin Offerings