Algorithms, Platforms, and Blockchain: Future Scenarios of Finance in the Era of Digital Disintermediation (Futuri)

Summary

• Digital payment transactions in the European Union increased from 4.8% of total transactions in 2007 to 73.3% in 2014.p.3
• The share of European citizens using internet banking expanded from 25% in 2007 to 44% in 2014, with national rates spanning from 90% in Iceland to 4% in Romania.p.3
• European credit institutions and bank branch counts shifted from expansion in 2008 to closures in 2014, reaching rates of -5.9% and -3.4% respectively.p.4
• Citi Research projects full-time banking employment in the EU to decline by -45%, falling from 2.9 million in 2015 to 1.8 million in 2025.p.4
• Venture capital investments in Europe did not exceed one-seventh of US levels in 2015, while Italian VC investments represented only 0.04% of GDP in 2011.p.5
• Over the past three years, $1.4 billion was invested in blockchain in the US, while 80% of banks are expected to launch blockchain initiatives.p.8

Key insights

1. Automated software and robotic process automation (RPA) are increasingly replacing routine back-office tasks across financial institutions.p.1
2. Routine tasks across high-employment sectors face an automation probability between 0.6 and 1 according to Oxford Martin School estimates.p.2
3. European digital payment adoption expanded rapidly to represent 73.3% of total transactions by 2014.p.3
4. Automation and 24/7 digital banking access drove European bank branch numbers to shrink by -3.4% in 2014.p.4
5. European full-time banking workforce is expected to collapse from 2.9 million in 2015 down to 1.8 million by 2025.p.4
6. Italy's venture capital funding reached only 0.04% of GDP in 2011, highlighting a significant gap in financing innovative startups relative to the US.p.5
7. More than 90 central banks worldwide are assessing scenarios for distributed ledger and blockchain technologies.p.8