The value of global blockchain transactions is set to reach an unprecedented $3.4trn by 2023 as financial institutions increasingly look to the technology to improve their bottom lines.
That is according to a new report from Juniper Research, which expects the value to reach $3.4trn (£2.6trn) by 2023, representing a compound annual growth rate (CAGR) of 87% over five years.
And cross-border transactions are forecast to rise to $1.3bn with a CAGR of 82% over four years.
The researchers also expect smart contracts to be central to blockchain uptake, particularly in the context of increasing accuracy and transparency.
They found that 66% of financial institutions are at least considering blockchain with smart contract capabilities, with 21% hoping to use it for financial management, and just 1% looking at it for cryptocurrency.
“This is exemplified by JP Morgan Chase’s use of smart contracts to reduce compliance costs via the Quorum platform, a distributed ledger transaction network built on Ethereum,” Juniper Research said.
After scoring 19 blockchain vendors for agility, presence and innovation, the researchers also revealed that IBM, Infosys Finacle, Interbit, Deloitte and Digital Asset are the leading companies in the field.
They predict that banks will save close to $27bn a year by 2030 through blockchain implementation.
This comes on the same day that insurance firm Generali Employee Benefits (GEB) and Accenture unveiled a new blockchain solution to reduce processing errors through smart contracts.
It is hoped that this will streamline GEB’s operating model for captive services, which include life, short and long-term disability, accident and healthcare insurance.
A prototype last year showed that the technology could lower costs, save time and improve data quality for all stakeholders.
“The use of blockchain technology allows for a truly connected ecosystem and a seamless partnership between clients, advisers, local insurers and Generali,” GEB CEO, Sergio Di Caro, said.
“Blockchain will change not only our network, but the employee benefits industry as we know it.”
Insurance technology companies attracted $3bn (£2.4bn) of investment in the first half of 2019 worldwide, and are on track to receive a record $6bn by the end of the year.
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