According to the latest report from Goldman Sachs Investment Research, implementation of blockchain technology could save capital markets $2 billions in the US and $6 billions globally on an annual basis.
The report showed that this projection is limited to cash securities – equities, repo and leveraged loans – and that the savings could be even larger. For example, Goldman Sachs expects applications of the technology eliminating additional costs markedly across the foreign exchange (FX), commodities and OTC derivatives markets.
The report from Goldman Sachs provided also estimates for the potential cost savings that could be achieved by organizations, using alternative implementations of the technology.
For example, it expects the use of blockchain-based identity management as creating up to $9 billions in cost savings through 2020 in the peer-to-peer lodging industry by enabling the guests and hosts necessary to such business models to better manage disputes.
Furthermore, the report examined the blockchain’s potential role in US energy markets, anti-money laundering (AML) and know-your-customer (KYC) compliance and in underwriting title insurance.
In addition to those three industries, Goldman Sachs report sees also blockchain playing a role in reducing suspicious transactions, generating between $3 billion and $5 billion in cost savings, while title insurance would reach between $2 billion and $4 billion in savings through reductions in errors and manual processes.
Generally, Goldman Sachs stated that such widening of blockchain technology should be seen as a business opportunity, arguing that prior public statements on its potential have been perhaps too narrowly defined.
The report added:
“A key takeaway across these applications is that blockchain is not just about disintermediating the middleman. In some cases, blockchain could disrupt markets and existing participants, while in others, it promises to help drive cost savings by reducing labor-intensive processes and eliminating duplicate effort.”
Generally, this report is the latest sign that Goldman Sachs is monitoring the industry for another opportunities.
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