Blockchain technology, often referred to as distributed ledger technology (DLT), is a means by which the participants in a distributed network can each maintain a copy of an immutable ledger of transactions and where transactions can be executed without the need for a single, central, coordinating authority. This ability to execute transactions effectively without the presence of a central authority is regarded by many as the chief benefit of blockchain technology, as it creates the promise that organisations will be able to transact business with one another without being subject to third-party control.  

In banking, this disintermediation has serious ramifications for billions of dollars of global business. DLT could enable two parties to transact without requiring a third party for oversight or intermediation, reducing counterparty risk and arbitrage, as well as the role of ‘parasitic’ supporting entities that act as bottlenecks and profit from opacity in the system. 

However, not all companies are equal when it comes to their capabilities and investments in the key themes that matter most to their industry. Understanding how companies are positioned and ranked in the most important themes can be a key leading indicator of their future earnings potential and relative competitive position.  

According to GlobalData’s thematic research report, Blockchain in Banking, leading adopters include: Amazon, PayPal, Alphabet, Apple, Revolut, ACI Worldwide, Amex, and JPMorgan Chase. 

Insights from top ranked companies  

JPMorgan Chase 

JPMorgan Chase is now testing the use of blockchain to facilitate cross-currency payments between London and Tokyo. This technology would allow for instantaneous settlement within banks. Similarly, fintech start-up Ripple, with its XRP currency, is helping banks transact instantly and directly with other banks around the world. In both cases, enabling instant point-to-point settlement and providing end-to-end visibility for each settlement will significantly reduce the operational costs and risks associated with reconciling exceptions and failures. 

Amazon 

In 2019, Amazon launched Amazon Managed Blockchain (AMB), a fully managed service which acts to streamline the process of joining public networks or creating scalable private networks. It utilises frameworks such as Hyperledger Fabric and Ethereum. It eliminates the need for a centralised authority when creating networks, meaning just a few clicks are required to meet the demands of thousands of applications running millions of transactions. AMB’s Ethereum Mainnet nodes run on the Ethereum Proof-of-Stake (PoS) network following the recent Ethereum merge. 

To further understand the key themes and technologies disrupting the payments industry, access GlobalData’s latest thematic research report on Blockchain in Banking.   

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