Blockchain technology has the potential to significantly reduce the costs and time involved in cross-border banking transactions, increasing banks’ efficiency but putting pressure on their fees and commissions, Moody’s Investors Service said in the report on the possible impact of blockchain on banking systems.

“Banks could benefit significantly from the development and implementation of blockchain technologies in terms of enhanced efficiency, cost savings and risk reduction. But the adoption of these technologies will also limit processing fees, commissions and gains on foreign exchange transactions, which will pressure revenue,” said Colin Ellis, Moody’s Managing Director for Credit Strategy and the report’s co-author.

According to the Moody’s report, Swiss banks would be most exposed to reductions in fees and commission, with 50% of their revenue coming from that source. Italian, Canadian, and Israeli banks follow at around 35%.

At the same time, banking systems with significant cross-border transactions - including those in the United Kingdom, Belgium and Switzerland - may see the most disruption from the technology that underpins crypto-currencies such as Bitcoin. Moody’s also notes in the report that blockchain could cause potential disruption in cross-border transactions.

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