Crypto Popularity to Spur Growth in Blockchain-Powered Banking, Financial Services

The surging use of cryptocurrencies is expected to enhance the development of blockchain in the banking and financial services market, according to The Business Research Company. 

The report noted that the worldwide blockchain in banking and financial services market size is anticipated to hit $1.89 billion this year from $1.17 billion recorded in 2021.


As a result, recording a compound annual growth rate (CAGR) of 61.9%. The report added:

“The blockchain in banking and financial services market is expected to reach $12.39 billion in 2026 at a CAGR of 60%.”

Reinsurance companies have been adopting blockchain technology for more accurate, faster, and more efficient compliance checks and claim settlements.


 For instance, Ryskex, an insurance company, deploys a blockchain-powered platform to streamline insurance analysis and minimize risks. The report stated:

“Blockchain technology allows for safe data management across different interfaces and stakeholders while maintaining data integrity. The system reduces operational expenses across the board, from identity management and underwriting to claims processing, fraud management, and reliable data availability.”

With SAP SE being the biggest company in the blockchain in the financial market, it is continuously adopting cutting-edge technologies to streamline processes. 


For instance, it revealed plans to incorporate blockchain technology into its supply chain traceability platform to enhance stakeholders.


Nevertheless, the report highlighted that blockchain scalability is the major stumbling block toward market growth.


Meanwhile, the benefits rendered by blockchain technology, such as transparency, transaction security, and detection of fraudulent activities, are expected to be major catalysts enhancing the fintech industry, Blockchain.News reported. 

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Blockchain in Fintech Sector Expected to Hit $31.4B by 2030

Blockchain in the fintech market is anticipated to reach $31.4 billion by 2030, given that the penetration of this cutting-edge technology in the financial industry has boosted app-based operations.

The study by Market Research Future (MRFR) pointed out that a compound annual growth rate (CAGR) of 47.9% would be recorded in the forecast period between 2021 and 2030. 


Open banking and the high adoption of international payment platforms are the key driving forces behind the market expansion.


Since blockchain technology aids transparency, transaction security, and detection of fraudulent activities, it has been a major catalyst in the fintech industry’s growth even during the pandemic. 


Working capital has become fundamental in the current era where inflation and surging interest rates continue wreaking havoc. As a result, the fintech sector aims to fill the void as companies seek to attain greater economies in the mission-critical cash cycle. 


Therefore, blockchain is expected to unlock more opportunities by automating supply chain finance.


North America takes the lion’s share in the fintech and blockchain market, followed by Europe and the Asia Pacific. Per the report:

“North America heads the global blockchain in the fintech market, witnessing the growing adoption of advanced technologies. Besides, the growing fintech industry and the rising demand for secure payment processes from online applications boost the region’s market shares.”

Moreover, market growth in Europe is anticipated to soar based on surging payment security and internet connectivity needs. 


On the other hand, the increasing numbers of call centres, websites, and mobile applications in the Asia Pacific region are expected to foster more development in the blockchain in the fintech market. 


Meanwhile, the fintech sector in Singapore made notable strides in 2021 by hitting $3.94 billion, with crypto and blockchain funding contributing nearly half at $1.48 billion, Blockchain.News reported. 

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Banking Infrastructure Needs Blockchain Technology to Meet Rapid Fintech Enviroment, HashCash CEO Says

With the fintech industry making significant strides within a short time, the banking sector ought to integrate blockchain technology to keep pace with this area, according to HashCash CEO Raj Chowdhury. 

For a holistic transformation to be witnessed in the conventional financial landscape, Chowdhury believes the adoption of cutting-edge technologies like blockchain should happen even though digitalisation, improved UI/UX, and competitive pricing are happening at the front-end. 

Blockchain adoption continues to tick based on various factors, such as improved transparency, better capital optimisation, decreased counterparty risks and errors, instant cross-border payment settlements, and bypassing intermediaries.

These attributes are expected to make blockchain in the supply chain market surpass $14.88 billion by 2028. 

Chowdhury pointed out:

“Originally designed as a platform for an alternative to the existing fiat currency system, blockchain is now built to answer the challenges in the existing banking infrastructure, and help them deliver better services.”

Blockchain technology is also creating fintech opportunities through smart contracts because they help eliminate people-intensive paperwork and escrow service requirements. 

Chowdhury added:

“The traditional universal banking model offering all-in-one services has seen an alternative with separate fintech businesses offering specialized services. From wealth management, payment services, to loans- the focused specialization of fintech increases customer expectations leading to competition with the BFSI sector.”

The significant worldwide proliferation of fintech services has prompted paradigm shifts and innovations like embedded finance and banking-as-a-service through cloud API connectivity. 

According to KPMG’s Pulse of FinTech report, the fintech industry in Singapore made notable strides in 2021 by hitting $3.94 billion, with blockchain and crypto funding contributing nearly half at $1.48 billion. 

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US Federal deposit insurer lists “crypto-asset risks” among its top priorities for the year

Martin J. Gruenberg, the acting chairman of the Federal Deposit Insurance Corporation, or FDIC, named “crypto-assets” among the agency’s key priorities in 2022, alongside addressing financial risks associated with climate change and promoting amendments to major federal statutes relevant to FDIC’s jurisdiction.

A Feb. 7 statement outlines five key areas that the agency deems most important for its mission of maintaining public confidence in the U.S. financial system. Number four on the list is evaluating “crypto-asset risks.”

Acknowledging the rapid pace with which digital asset-based products are becoming part of the financial landscape, the statement emphasizes systemic risks that this process could pose. Gruenberg further maintains that all federal banking agencies should join forces in assessing these risks and determining the scope of crypto-related activities which banks can safely undertake. As per the statement, the next step would be drafting a comprehensive guidance for banking organizations:

To the extent such activities can be conducted in a safe and sound manner, the agencies will need to provide robust guidance to the banking industry on the management of prudential and consumer protection risks raised by crypto-asset activities.

The FDIC is an independent agency tasked with providing deposit insurance to U.S. banks’ clients, as well as supervising financial institutions for risk management and consumer protection standards. The regulator has recently undergone a change of leadership, with former chairperson Jelena McWilliams stepping down on Feb. 4.

Gruenberg’s statement echoes those previously made by McWilliams as she discussed the U.S. banking agencies’ ongoing effort to provide banks with guidance on activities involving digital assets.