Bain: blockchain can reduce trade finance costs by 50%+

Bain and Company released a report about disruption in transactional banking. The report predicts that distributed ledger technology (DLT) could reduce trade finance operating costs by 50 percent to 80 percent. Additionally, they estimate three to four-fold improvements in execution times.

Appeal of transactional banking

While global banks like Citigroup, HSBC, and JP Morgan have focused on the sector for years, others are now entering. Bain point to the stability of income and the lower-cost deposits which help banks liquidity ratios. Also, there’s the potential to cross-sell other products. But most of all there’s the high return with HSBC expecting transaction banking to return 20% on tangible equity.

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