The financial services industry is gearing up to start rolling out commercial products based on blockchain technology – and is spending about $1.7 billion a year on distributed ledger technology (DLT). This is according to a report by Greenwich Associates, Blockchain Adoption in Capital Markets—2018, which suggests that financial institutions are now ready to progress past the proof-of-concept stage of DLT product development and are ready to deploy their systems and platforms. The report, which Greenwich says is one of the largest and most comprehensive studies on this topic, was based on 200 interviews with market participants, with questions on blockchain budgets, team sizes, use case exploration, key challenges and other issues.

The study found that:

• blockchain budgets increased 67 per cent last year;
• 10 per cent of the financial institutions surveyed have blockchain budgets in excess of $10 million;
• headcount dedicated to blockchain initiatives doubled in 2017;
• the typical top-tier bank now has about 18 full-time employees working on blockchain technology;
• 14 per cent of the financial institutions in the study claim to have successfully deployed a production blockchain solution;
• payments and trade finance are the businesses targeted most frequently.

The report also found that cost reduction is the biggest driver of blockchain investment and development for financial service firms. Greenwich Associates said that DLT has been a top focus for financial services firms for the last few years. But it added that product development has been “unable to keep up with the hype”. The firm's Richard Johnson commented: “More than half the executives we interviewed told us that implementing DLT was harder than they expected. Nevertheless, more than three-quarters of projects currently under development are expected to be live within two years.”