Blockchain in Banking Sector Market Size, Share, By Component (Platform/Solution and Blockchain as a Service), By Type (Public, Private, Hybris, and Consortium), By Deployment (Proof of Concept, Pilot, and Production), By Application (Digital Identity, Payments, Smart Contracts, Supply Chain Management, Internet of Things (IoT), and Others), By Industry (BFSI, Energy & Utilities, Government, Healthcare and Life Sciences, Manufacturing, Telecom, Media & Entertainment, Retail & Consumer Goods, Travel and Transportation, and Others), and Region - Trends, Analysis and Forecast till 2034

Blockchain in Banking Sector Market Size was valued at USD 5.3 Billion in 2024 and is expected to reach USD 21.1 Billion by 2034, growing at a CAGR of 16.4%

Blockchain is a data collection and record system known as a technology database connected to cryptography. Blockchain is a decentralized digital ledger that records all transactions on a peer-to-peer network. Data is stored in a block format that is cryptographically secure and cannot be changed by altering subsequent blocks. Blockchain records transactions with Bitcoin, Litecoin, Ethereum, and many other cryptocurrencies. A blockchain records information that makes it difficult or impossible to change, hack, or defraud the system. A blockchain is a digital ledger of transactions that is duplicated and distributed across a network of computer systems on a blockchain. Blockchain is the best technology for distributing this data because it allows for entirely transparent, instantly shared data to be stored in an immutable ledger that is only available to authorized network users. The blockchain network can track orders, payments, accounts, production, and more. The blockchain market is increasing and is expected to continue to do so in the future, with the increasing number of innovations and consumer awareness of the benefits of blockchain technology expected to propel the industry shortly.

Key Drivers of Target Market:

Higher Efficiency and Cost Reduction

• Blockchain can automate several banking activities, thereby saving the workforce time and effort spent on the same. Banking activities include trade finance, payments, and regulatory compliance. Blockchain-based platforms and systems have triggered considerable savings in cost and efficiency enhancement.
• Blockchain provides security and transparency to transactions through distributed ledger technology, reducing the possibility of fraudulence and errors. This increases trust and confidence within a financial system.
• Blockchain can wash away much of the banks' problems in terms of compliance with convoluted regulations, providing an immutable audit trail of transactions, especially in areas such as Know Your Customer and Anti-Money Laundering.
• Blockchain empowers new financial products and services, such as new trade finance platforms—for example, cross-border payment solutions—and tokenized securities.

Rising demand for faster payments

• Clients are increasingly demanding faster and more convenient payment methods. Blockchain can help realize real-time or near-real-time cross-border payments.
• Most banks are eying this area of disruptive technology and readily invest in the pilot project to reap its potential benefits. This openness to innovation is driving the market growth.
• Industry consortiums and collaborations of bank technology companies are driving the creation of blockchain solutions in banking.

Restrains:

Technological Challenges

• The existing blockchain platforms cannot support vast transaction volumes required by big banks.
• Most blockchains are faced with the challenges of interoperability, where the different blockchain platforms can barely communicate and transact with each other.
• Though blockchain is generally very secure, a few potential vulnerabilities might need to be dealt with.

Regulatory Challenges

• There is a lack of clear and consistent regulations about blockchain technology in banking that makes the situation uncertain for the financial institutions.
• Banks must comply with extant regulations like anti-money laundering and know-your-customer while using blockchain.

Opportunities:

Rising demand for grid services

• Blockchain will help automate manual tasks involving intermediaries; transaction processing time shortens while reducing operational costs. Blockchain is immutable and hence transparent; the roles of this in record-keeping would reduce mistakes and discrepancies to the least possible, saving time and resources. With its encryption techniques and distributed ledger technology, blockchain provides a high degree of security against fraud and cyber-attacks. All participants within a blockchain network benefit because each has a copy of every transaction that is executed within the system; to that extent, more light is brought to the financial system.

New Products and Services

• With blockchain, one can make cross-border payments faster and at lower transaction fees. Of course, that would be very advisable for businesses and people. Blockchain can simplify trade finance by doing away with paper-based processes for trade finance transactions, bringing efficiency to the same.
• This means that blockchain-based self-executing contracts can automate several financial agreements, eliminating manual intervention and consequently reducing costs. Fractional ownership: Through blockchain, ownership of fractional shares of assets can be allowed, which expands the base of prospective investors in such assets.

The market is segmented based on Components, Type, Deployment, Application, Industry, and Region.

Components Insights:

• Platform/Solution: This refers to the underlying blockchain platforms themselves, such as Ethereum or Hyperledger, and specific blockchain-based solutions developed for banking applications, such as trade finance and cross-border payments.
• BaaS: Blockchain as a Service is a cloud-based service that offers banks blockchain infrastructure and tools without having to build their blockchain network.

Type Insights:

• Public Blockchains: It is not really practical for banking, for instance, with sensitive concerns regarding privacy, but still usable for other applications, such as international remittances or KYC identity management if privacy issues are addressed.
• Private Blockchains: Banking will take off with this one because of the benefits of control, security, and efficiency in using these permissioned ledgers for trade finance, cross-border payments, and internal record-keeping.
• Hybrid blockchains: They combine both public and private blockchain features and are, therefore, a good compromise between security and openness with enough flexibility.
• Consortium blockchains: These are permissions and governed by a consortium of various banks or financial institutions. They could be used, for example, in trade finance platforms or interbank settlements.

Deployment Insights:

• Proof of Concept (PoC): This is the stage at which banks determine whether blockchain technology might prove feasible and useful if applied to actual use cases. Because of its minimal scale and short duration, the market size for PoC can, at times, become very hard to estimate.
• Pilot: If a PoC proves to have some potential, banks might kick off a pilot project to test the technology in a more controlled environment with accurate data. Compared with PoCs, the potential market size of pilots could be bigger but still limited.
• Production: Banks move to full-scale production deployment after the pilot's success. This represents the most significant potential market size segment since it means broader adoption and ongoing operational costs.

Application Insights:

• Digital Identity: Secure storage of customer identities, fighting fraud, and reducing complexity during onboardings are just a few possibilities for blockchain. This use case has been gaining interest, but market size data may be scarce.
• Payments: Blockchain facilitates faster, more transparent, and less-cost cross-border transactions. This is an application of enormous potential. Some reports estimate that the global blockchain payment market will go as high as $1,432.02 billion by 2027. However, isolated data for banking sector adoption might need to be more readily available.
• Smart Contracts: Such self-executing contracts have enormous potential for automating many banking processes, improving efficiency, and reducing errors. While little market-size data is available, the growth in smart contract platforms suggests considerable interest in this application.
• Supply Chain Management: Blockchain offers real-time tracing of goods along the supply chain. This increases transparency while reducing fraudulent activities. This may be one of the use cases relevant for trade finance and could form a large potential market, but data may be limited.
• Internet of Things (IoT): Safe and automatic payment solutions can be provided by integrating blockchain with IoT devices. However, this use case is still in its infant stage, and for that reason, data linked to market size may not be available.
• Others: Blockchain research is ongoing in several other banking applications, such as regulatory compliance, trade finance platforms, and loyalty programs.

Industry Insights:

• BFSI: It comprises all financial institutions, including banks, investment firms, insurance companies, payment processors, and other financial intermediaries.
• Energy & Utilities: This segment covers producing, transmitting, and distributing energy—electricity, oil, gas, etc.—and utilities—water, waste management-related companies, etc.
• Government: It consists of all government administration levels, from local municipalities to national agencies. This includes various departments that deal with public services, defense, and social security, among others.
• Healthcare and Life Sciences: Companies and institutions that provide healthcare delivery, medical research, pharmaceuticals, biotechnology, and medical devices.
• Manufacturing: This industry consists of companies transforming raw materials into finished goods. Examples of industries in this category include automobiles, chemicals, electronics, food processing, and textiles.
• Telecom: It consists of those businesses that are primarily involved in providing telecommunications services, such as telecommunications mobile phone networks, Internet Service Providers (ISPs), and Cable TV operators.
• Media & Entertainment: Companies that produce and distribute content, such as television networks, film studios, music labels, and publishing houses.
• Retail & Consumer Goods: Companies that sell directly to consumers include brick-and-mortar stores, online retailers, and consumer goods manufacturers such as clothing, electronics, and household goods.
• Travel and Transportation: It involves the industries associated with companies offering transportation services, such as airlines, railways, shipping companies, and car-hire services. It also includes companies engaged in the travel business, such as hotels, online travel agents, and tourist boards.
• Others: This is an odd-ball category for all the industries that did not get special mention above. It could include agriculture, mining, construction, education, and professional services.

Regional Insights

• North America: This region currently shows maximum adoption of blockchain in banking because of the strong presence of established financial institutions and technology companies actively exploring the technology.
• Asia Pacific: With rapid economic growth and a rising tech-savvy population, this region is expected to observe an increase in blockchain adoption within the banking sector. China is one of the major countries in this region.
• Europe: European countries, on the other hand, are slowly recognizing the power of blockchain and are applying regulations that can facilitate its adoption in the banking sector. This region may show huge growth shortly.
• Latin America: Like the Middle East and most of Africa, it is very much at an early-adopter stage. However, various pilot projects and initiatives have explored blockchain's potential for banking.
• Middle East and Africa: This region is still nascent in blockchain adoption within the banking sector. Interest among governments and growing awareness may result in future growth.

Blockchain in Banking Sector Market Report Scope:

Segments Covered in the Report:

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2024 to 2034. For the purpose of this study segmented the target market report based on Components, Type, Deployment, Application, Industry, and Region:

Segmentation:

By Components:

• Platform/Solution
• Service

By Type:

• Public
• Private
• Hybrid
• Consortium

By Deployment:

• Proof of Concept
• Pilot
• Production

By Application:

• Digital Identity
• Payments
• Smart Contracts
• Supply Chain Management
• Internet of Things (IoT)
• Others

By Industry:

• BFSI
• Energy & Utilities
• Government
• Healthcare and Life Sciences
• Manufacturing
• Telecom
• Media & Entertainment
• Retail & Consumer Goods
• Travel and Transportation
• Others

By Region:

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Russia
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • Israel
  • South Africa
  • Rest of Middle East & Africa

The key players operating the Blockchain in the Banking Sector Market include International Business Machines Corporation, Amazon Web Services, Inc., Microsoft Corporation, SAP SE, Intel Corporation, Oracle Corporation, Bitfury USA, Inc., Cegeka NV, Earthport plc, GuardTime AS, Digital Asset Holdings, LLC, Chain, Inc., Huawei Technologies Co., Ltd., BlockCypher, Inc., and Symbiont.io, Inc.

• In January 2023, Next Bank, a Taiwanese digital bank, went live with Temenos. With Temenos' open platform, Next Bank is empowered to bring products to market rapidly and serve its customers with excellence. In the near future, the bank plans to offer foreign exchange services, including remittance services for migrant workers, as well as investment tools that will help in wealth management. Powered by Temenos, Next Bank has a target of onboarding nearly 300,000 users in just nine months.
• In December 2022, Wells Fargo rolled out a single, integrated digital banking platform for its corporate investment and commercial banking clients. Interested in this launch as much as any bank would, it hopes to harness artificial intelligence and machine learning to provide tailored corporate and commercial financing solutions to organizations dependent on distinct needs.

• International Business Machines Corporation*
  • Company Overview
  • Product Portfolio
  • Key Highlights
  • Financial Performance
  • Business Strategies
• Amazon Web Services, Inc.
• Microsoft Corporation
• SAP SE
• Intel Corporation
• Oracle Corporation
• Bitfury USA, Inc.
• Cegeka NV
• Earthport plc
• GuardTime AS
• Digital Asset Holdings, LLC
• Chain, Inc.
• Huawei Technologies Co., Ltd.
• BlockCypher, Inc.
• Symbiont.io, Inc.

“*” marked represents similar segmentation in other categories in the respective section.