Blockchain technology is estimated to have the potential to save the financial services industry up to $20 billion by 2021. Interest in the technology has as a result been gaining speed, with consulting firms joining the bandwagon. In a bid to stay ahead of the game, Accenture has launched a new, dedicated blockchain practice, as well as struck a partnership with blockchain expert Digital Asset Holdings.
Blockchain technology has been garnering considerable interest within the consulting industry in recent years. The technology provides a range of potential solutions to issues faced by financial services players in a number of domains. The technology, which provides a distributed public ledger, is highly tamper and revision proof, bolstering security, as well as reducing the costs involved with managing the network. Industry estimates suggest that blockchain technology has the potential to knock more than $20 billion annually off the costs in the financial services industry by 2021.
Not surprisingly, in a bid to capitalise on the potential, organisations are ramping up their investments in the terrain. Investment into blockchain-enabled functions are estimated at $75 million in 2015 growing to $400 million by 2019.
Among the consultancies expanding its blockchain capabilities is Accenture, with more than 370,000 employees one of the largest players in the advisory and technology landscape. The firm has unveiled that it has launched a specialised blockchain practice targeted at financial services industry demand. The new service line will be part of the firm’s wider financial services group, and is aimed at supporting the integration of blockchain technology into operations, allowing financial services clients to increase operational efficiency, security, and client service, as well as to capture new revenue channels. The new practice is already providing advisory support to a number of major banking institutions and regulators, says Accenture.
“Blockchain and distributed-ledger technologies enable the financial industry to move away from reconciliation-based processes that are expensive and inefficient,” says David Treat, Managing Director and Global Head of Accenture’s capital markets blockchain practice. “Our new practice, which builds on the strong growth of our global capital markets business, can help clients move from concept to production in the shortest possible time, improving efficiency and unlocking new revenue streams.”
Digital Asset Holdings
One of the first announcements of Accenture’s new practice is that the firm has entered into partnership with New York headquartered Digital Asset Holdings. Founded in 2014, Digital Asset Holdings provides blockchain settlement and ledger services for financial assets. The company’s various solutions provide improvements to post-trade processing efficiency and security, while reducing cost, latency, errors, risk and capital requirements.
Through the partnership, Digital Asset will gain increased scope and scale of its operations to an expanded range of global clients, as well as considerable support from Accenture in the areas of feasibility studies, business case assessments and operating model design through to full-scale systems integration, cybersecurity and cloud consulting. Accenture’s investment in Digital Asset Holdings is part of a $50 million round of funding collected by the company last month* – the capital provided by the consulting firm has not been disclosed.
“Accenture is a renowned leader in large-scale systems transformation and the development of complex technology infrastructure,” says Blythe Masters, CEO of Digital Asset. “Working together, we can dramatically accelerate the adoption of blockchain technology globally. Our products and software combined with Accenture’s expertise at integrating new technologies with existing systems will help institutions reduce settlement latency, risk, operating costs and capital requirements.”
The consulting firm has also become a member of the open source Linux Hyperledger project. The project seeks to leverage blockchain digital technology for recording and verifying transactions. Other recent investments in blockchain technology completed by Accenture include the launch of a Blockchain Centre of Excellence in Sophia Antipolis, France, and an investment in Ripple.
In a similar deal, Digital Asset Holdings also signed partnerships with Broadridge and PwC.
* Other firms that participated in the funding round are ABN Amro, ASX Limited, BNP Paribas, Broadridge Financial Solutions, Citi, CME Ventures, Deutsche Börse Group, ICAP, J.P. Morgan, Santander InnoVentures, The Depository Trust & Clearing Corporation (DTCC) and The PNC Financial Services Group.