Distributed Ledger technology systems in securities post-trading services. Evidence from European global systemic banks
Marco Cucculelli, Martino Recanatini
Abstract
Building on the fast developing – yet not consolidated – literature on blockchain and the financial system, this paper aims to investigate how Distributed Ledger Technologies (DLTs) may affect the banking sector performance by influencing the efficiency of the securities post-trading process. Three different scenarios have been developed and used as a framework to assess the impact of the adoption of blockchain technologies on the cost reduction in a sample of 12 Global Systemic Banks in Europe. By using DLT systems, the expected savings in the post-trading processes are sizable and mainly concentrated in IT expenditures and wages associated with core post-trade functions. Moreover, DLT systems emerge as a catalyst for innovation in post-trade process, as they improve timing window and data quality.