Introduction
Blockchain is everywhere; Yes, you’ve heard it right. Now, blockchain is one of the trending technologies in the world. In many areas, blockchain technology has the potential for operations and other high-end objectives.
This enables the financial and banking sectors to develop and evaluate their business operations more effectively with the help of blockchain technology. The market share of blockchain applications in banking is anticipated to grow its total market share at a CAGR of 58.1% from 2021 to 2026.
Banks also aim to adopt Generative AI for better performance and improvement in decision-making and risk management. AI is a promising new technology that can change the banking sector operations at different levels, making it more accessible for the business and other users.
Let’s explore the recent blockchain and AI trends in banking sectors from October to November 2023.
1. DLT to establish a 24/7 payment infrastructure in real-time
Fnality International Ltd., a company specializing in constructing blockchain systems to tokenize major currencies for central banks, announced that it secured $95 million (£77.7 million) in funding. Each Fnality Payment System employs Distributed Ledger Technology (DLT) to establish a continuous 24/7 payment infrastructure that minimises settlement cycles to nearly real-time. This represents a substantial advancement in the speed, functionality, and resilience of wholesale payments while also enhancing intraday liquidity management.
2. Banking, finance, and insurance are the highest users of AI
Global Machine Learning shares that the end usage of AI in banking, finance, and insurance is the highest usage of AI, which is about 18% compared to other industries and sectors. A British multinational universal bank that uses fraud detection using an AI tool that prevents fraud by forecasting merchant payment transactions through real-time monitoring.
3. Explosive growth: Blockchain reshaping the global banking and financial services market
The global banking and financial services market using blockchain has witnessed remarkable growth, increasing rapidly from $1.89 billion in 2022 to $3.07 billion in 2023, marking a compound annual growth rate (CAGR) of 62.1%. This predicts $17,583.4 million by 2026 and soaring to $60,270.6 million by 2031.
4. The future predictions of AI in banking sectors
The future of banking with generative AI will likely have a huge impact. The new technology will result in the revelation and expansion of banking operations with the AI’s role. According to a report by International Data Corp (IDC), global spending on AI is expected to reach $166 billion in 2023 in banking, one of the largest contributors by industry at about 13%. rising to about $450 billion by 2027. Besides AI's role in banking, the huge number of banks' term use cases will likely focus on offering innovations to gain small efficiency and bring other improvements across the business.
It's a wrap-up
The recent developments reflect a growing upward trend in blockchain technology from traditional banking operations to digital management to cross-border payments and other services. This shows the increase in banking sectors and recognition of blockchain networks, which gives immense benefits and efficiencies. Blockchain and even generative AI are transforming banking functionality for better improvement and innovations by reducing costs, risk, and other benefits to banking operations.
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