McKinsey: Retails Banks Remain Nervous and Cautious to Embrace Blockchain
Henry Chan Jun 10, 2019 16:00
The global management consultancy firm McKinsey & Company argued that blockchain adoption remained slow, as reported by Bloomberg on 7 June. Compared to investment banks, retail banks remain nervous and cautious to embrace blockchain due to tight regulations and conservative customer environment.
The global management consultancy firm McKinsey & Company argued that blockchain adoption remained slow, as reported by Bloomberg on 7 June. Compared to investment banks, retail banks remain nervous and cautious to embrace blockchain due to tight regulations and conservative customer environment.
McKinsey emphasized cost efficiency is the most important factor when it comes to blockchain adoption for retail banks. The areas of blockchain adoption includes fraud prevention, risk assessment, managing Know Your Customer procedures and processing remittance payments. McKinsey added “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 estimated that retail banks can save $4 bn annually if they adopt blockchain-based cross-border payments, as well as $1 bn annual cost savings in new clients onboarding. Besides, $9 billion can be saved by using blockchain solutions for fraud prevention (see exhibit 1).
Exhibit 1: Potential Cost Savings by Retail Banks
Source: McKinsey Global Banking Pools, McKinsey Global Payments Map
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