A Bloomberg report has quoted management consultancy firm McKinsey & Company, who says that retail banks are slower to adopt blockchain technology thanks to restrictive regulations and conservative consumer environment on their side.
According to the article, retail banks were even characterized as “nervous and cautious” about the emerging technology, when compared to their investment banking counterparts, who had bigger risk appetites.
The authors of the report did see some silver linings, including the potential for retail banks to come up with big gains from blockchain integration across several applications such as KYC compliance, remittance, fraud prevention and risk assessments. Cost efficiencies stand out as the critical benefit of blockchain in streamlining retail bank expenses:
“Almost all of their attention, especially in developed markets, is on cost reduction. And where cost reduction is front and center they are prepared to look at petty much any opportunity.”
McKinsey has put an estimation of USD 4 billion in annual savings simply by adopting blockchain solutions to use in cross-border payments. New clients and their onboarding costs could save an additional USD 1 billion every year. One step further in fraud prevention and blockchain applications could rein in a hefty savings of up to USD 9 billion.
Even with all that, co-author Atakan Hilal says: “It’s rather difficult in retail banking to change consumer behavior.”
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