BCG Platinion and Crypto.com have published a study suggesting that major European financial companies are increasingly considering the adoption of decentralized finance (defi services) or already contributing to it. The research involved more than 400 institutions.
Most Financial Institutions Already Integrating Defi or Considering it
Boston Consulting Group (BCG)’s advanced technology solutions arm BCG Platinion and the crypto finance platform Crypto.com have made public the results of their survey of 411 European financial institutions concerning their attitudes to the rapidly growing defi space. The respondents are active in the insurance, banking and trading sectors. The study was conducted by London-based market research company Sapio Research.
The findings appear to be encouraging for the prospects of defi adoption by institutional actors. 86% of the participating companies claimed to be already assessing or implementing defi-based services. The figure included companies with a turnover or balance sheet of above £10 billion.
Of the respondents already working on defi-powered tools, 39% have chosen to join or adopt an existing consortium, platform or application, while 24% are developing their own solutions. 22% are planning to move forward together with competitors. 42% of the corporate defi pioneers are reported to be using it to decentralize their approach to asset management, and for 38%, defi is a way to bring faster, more secure, payment processing.
Issues Remain But They May Not Be Critical
The surveyed companies did cite certain challenges that they were facing in their potential or ongoing defi adoption. 70% of them said that fraud concerns were impeding wholesale implementation of defi solutions. 61% admitted hesitation over the absence of regulation, and the regulatory concerns tended to increase with the company’s turnover and AUM. The other key issues raised by the study participants included defi’s frequent reliance on excessive collateralization of loans and the lack of recovery mechanisms.
Interestingly, however, only 15% of the financial institutions polled considered defi as a threat to their business and expressed opposition to its implementation. This is an unexpected revelation, given the predominant perception of legacy financial providers as enemies of innovation in the crypto space.
The two companies that commissioned the study expressed strong satisfaction with its findings. Co-founder and CEO of Crypto.com Kris Marszalek commented, “The research shows that defi's adoption is not limited to just the blockchain industry; traditional financial institutions of all sizes are viewing defi not as a competitive threat but rather as a valuable instrument to delivering more decentralized, efficient financial services. This is shown in their warming attitudes towards defi and its integral role in future plans for the vast majority of them."
In turn, Managing Director of BCG Platinion Kaj Burchardi added that “As markets evolve towards decentralisation, there will be a growing demand for approaches like defi which can provide a more efficient and more open way of banking, trading and investing.” He did try to downplay the hype somewhat, admitting that “there is still some progress to be made in order to bring defi into the mainstream, especially in security and compliance.”
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