Capgemini and LinkedIn, in collaboration with Efma, have released World FinTech Report 2017 which addresses several questions surrounding fintech and disruptive technologies such as blockchain.

The report is backed by a survey of over 8,000 customers in 15 countries, as well as over 100 interviews with senior-level executives, and an Executive Steering Committee which comprises of representatives from Santander, AXA, DBS Bank, Morgan Stanley, Fidor Bank, Barclays, BBVA, The Finanser, Capgemini and LinkedIn among others.

According to the report, blockchain technology is increasingly penetrating the financial services industry with numerous applications including enhanced transfers of digital assets, identity management, and better management of reward and loyalty solutions. Across other domains, blockchain use cases are seen in notarization services and letter of credit processing in banking, payment authorization and clearing in payment, and automation of claims processing and p2p insurance in the insurance industry.

“For the incumbent financial services institutions there is a real challenge right now to digitalize all of their operations. The urgency of doing that is becoming more and more obvious every day as we see the open sourcing of FS with institutions using apps API, Analytics, Blockchain, Mobile – all the technologies that are currently enabling FinTech companies to open source everything. If a bank does not step up to that challenge then it will disappear”, Chris Skinner CEO, The Finanser and Author, ValueWeb, said in a statement.

The payments domain is an early adopter of blockchain technology, and capital markets use cases are the second most relevant, the report said. The authors anticipate that blockchain solutions related to payments will be implemented most quickly, while applications that span all domains including employee reward solutions, token-based royalty solutions, and identity management solutions are expected to be implemented within the next three years.

In addition, blockchain applications in the insurance sector such as claims processing and peer-to-peer insurance are also expected to be implemented within the next three years.

When asked about the most relevant blockchain use cases in the financial services industry, 78.9% of executives gave the highest rating to payment authorization, clearing and settlement, followed by cross-border payments (77.5%), according to the survey.

However, the report pointed out that despite the recent interest and ongoing work on the technology, the industry as a whole is struggling to understand blockchain. According to the survey:

“Most financial services executives (60.0%) display only a basic understanding of blockchain technology and less than 10.0% feel they have a very good understanding”