Blockchain technologies could significantly improve financial institutionsâ€™ efficiency: KPMG
Blockchain technologies can create compelling efficiencies and meaningfully reduce reconciliations and errors, according to Eamonn Maguire, the global lead for KPMG’s blockchain practise, speaking at a seminar on the emerging opportunities offered by blockchain.
A blockchain is a permanent record of transactions in a network. Blockchain-based systems make the process of gathering, sharing and reporting information - to both clients and regulators – much more efficient.
While blockchain technology is set to disrupt financial services, Maguire indicated that the technology could also add significant value to organisations by improving efficiency, streamlining and automating back office functions, reducing costs and capital and creating new business models and revenue opportunities.
Maguire, who also leads KPMG’s blockchain practise in the US, said: “The financial services sector was the first major adopter of blockchain technologies – primarily because blockchain could help cut operating and capital costs - a growing burden for financial services companies after years of increasing regulatory overheads.”
Banking and capital markets companies are exploring blockchain technologies across multiple areas, from trading to settlements, and in many other areas of financial services. KPMG anticipates that a number of banks in the UAE could employ blockchain solutions to, for example, digitise and validate customer information.
“The UAE government is whole-heartedly supporting the emergence and implementation of blockchain technologies – and this is very encouraging. Digital transformation in the financial services sector is now shifting from the front office to the middle and back office; and blockchain is one of the key enablers for this. Globally, banks are forming syndicates and leveraging blockchain for know your customer (KYC) compliance, mortgages and trading. In the UAE, a number of sectors - the remittance and payments industry is a prime example – could immediately benefit from blockchain. Banks and other financial institutions in the UAE must consider how blockchain can support digital transformation, encouraging future growth,” said Farhan Syed, a partner with KPMG in the Lower Gulf and leader of their digital transformation practice.