Aite estimates that capital markets will spend $75 million in 2015 on one developing blockchain technology, more than twice what they spent in 2014. This will grow each year, reaching $400mn by 2019 as organisations look for cost savings and greater efficiency, the consultancy predicts.
Blockchain is best known in relation to bitcoin but it can also be described as a public ledger solution with storage capacity that is secured by cryptography and a system of algorithmic problem-solving.
The Royal Bank of Scotland has said that it is investigating the potential of blockchain, and Barclays is working on a proof of concept with a start up bitcoin exchange to explore its use in financial services.
In April, the Wall Street Journal reported that UBS is opening a blockchain research lab in London, and BNY Mellon chief information officer Suresh Kumar told the Wall Street Journal in April that the bank is experimenting internally with the use of blockchain to make transactions more efficient.
Banks are not giving away much information about their blockchain research, Aite said in the full version of the report, seen by e-Financial News.
"This is not because the banks deem this a trade secret; the simple and harsh reality is that the banks themselves are not clear on how this technology will evolve and ultimately be adopted," Aite said, according to e-Financial News.
Early thinking on the technology is about automating paper-based systems that lack existing IT infrastructure, the report said.