RESEARCH REPORT

In brief

In brief

  • With top benchmarking firm McLagan we’ve created an in-depth impact analysis with fact-based estimates of cost savings and benefits of blockchain.
  • Mapped McLagan’s aggregated operational cost data from eight of the world’s largest investment against our High-Performance Investment Bank model.
  • Initial savings of $8 billion on a cost base of $30 billion, approximately 27% across eight banks surveyed.


As the struggle to raise profitability continues, innovations like blockchain could offer investment banks a lifeline. As with many new technologies, it’s generating much excitement. Some analysts have likened its disruptive potential to that of the Internet, with the power to drive dramatic efficiency gains, save $billions and substantially reduce risk.

Our research demonstrates how and where blockchain could cut costs and deliver savings of more than 30% across the middle and back office.

What’s the issue with investment banking?

Investment banking middle and back office operations are deeply inefficient with:

Costly reconciliation processes and systems

  • fragmentation
  • manual processing

Cumbersome trade confirmation processes

  • reconciliation
  • clearance

Data quality issues that lead to trade breaks

  • transparency
  • auditability

Complex regulatory reporting requirements

  • legal entities
  • mutualized data

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The blockchain opportunity

Many analysts liken the disruptive potential of blockchain's distributed ledger technology—a new type of database system—to that of the Internet. In addition to reshaping the financial infrastructure as we know it, our research pinpoints where blockchain will have the biggest impact on a bank's bottom line.

Our blockchain research

To conduct the study, we joined forces with McLagan, a business unit of Aon plc, and world-class capital markets benchmarking provider. Mapping data from eight of the world's largest investment banks against our proprietary High Performance Capital Markets model produced compelling results.

The impacts of blockchain on investment banking

The report demonstrates how a blockchain-based database system could reduce costs and:

70%

Potential cost savings on central finance reporting.

50%

Potential cost savings on centralized operations.

>30%

Potential cost savings on compliance.

50%

Potential cost savings on business operations.

Are you ready for blockchain?

The blockchain genie is out of the bottle. If you're not on board already, now's the time. Read the report, discover what the buzz is about and explore what blockchain could do for you:

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Blockchain is challenging the industry to transform data-sharing processes. Early adopters are best placed to optimize costs and drive new revenues.

David Treat

Senior Managing Director – Blockchain MPS Global Lead

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