Totally 86% of traditional companies are implementing or at least considering blockchain-based decentralized finance technology, says Boston Consulting Group.
More than four out of five traditional European financial institutions now see decentralised finance, or DeFi, as a technology worth implementing or at least considering.
That's according to "The Sudden Rise of DeFi," a new study of 411 insurers, banks and trading companies released by Crypto.com and the BOSTON Consulting Group BCG Platinion with an IT focus on October 22.
Specifically, 86% are implementing or evaluating services based on a decentralized structure.
Noting that the blocked value in DeFi grew an impressive 1,500%, to $8 billion, the report concluded that the "ability to borrow, make loans, deposit funds into a savings account or trade complex financial products, all without asking anyone because permission is gaining strength."
Larger companies are shifting more aggressively to DeFi, with 71% of those with a balance sheet above $13.1bn (£10bn) implementing or evaluating the technology, compared with 51% of those below $131m (£100m).
"Research shows that the adoption of DeFi is not just limited to the blockchain industry," crypto said. with co-founder and CEO Kris Marszalek. "Traditional financial institutions of all sizes are seeing DeFi not as a competitive threat, but as a valuable tool for delivering more decentralized and efficient financial services."
Of the companies surveyed, 38% - and 61% of the largest companies - are using DeFi to "facilitate faster and safer payment processing services," the study concluded.
Two-thirds of respondents - 67% - believe DeFi will open up new revenue streams, while 70% believe it can make financial transactions faster and cheaper.
"As markets evolve toward decentralization, there will be a growing demand for approaches such as DeFi, which can provide a more efficient and open form of banking, trade and investment," concluded Kaj Burchardi, managing director of BCG Platinion.
"It is encouraging to find that financial institutions are already seriously and strategically collaborating with the cryptographic community to begin building a new generation of governance and technologically resilient solutions that will make financial services more accessible."
Work to be done
That said, the report found serious concerns about the lack of regulation, with 61% saying it made them hesitate - a concern that worsened for companies with higher turnover or more assets under management.
Almost the same number - 60% - said the lack of recovery mechanisms is worrisome.
Fraud security concerns are another challenge, with 70% saying it prevents DeFi adoption across the enterprise.
Still, the risk of vulnerabilities in smart contracts that put assets at risk is the biggest concern of DeFi research participants.
"There's still a lot of progress to be made to bring DeFi into the mainstream, especially in security and compliance," Burchardi said.
This is something that European regulators recognise. The European Commission last month unveiled "ambitious" proposals to regulate cryptocurrency assets and service providers. Unfortunately, it also predicted that it would take four years for these regulations to enter into force.