I have published several blogs on the eroding relevance of traditional banking and financial services. This age-old industry is increasingly susceptible to all kinds of new competitors, and must re-imagine itself in order to stay indispensable. Here is yet another example of the looming dangers.
Per Business Insider: “Banks are going wild for the blockchain, the technology first invented to underpin bitcoin. Also known as "distributed ledger" technology, blockchain uses complex cryptography and a wide network of duplicated ledgers to let people transact directly with one another online without going through a middleman.
Transactions must be signed off on by both parties and the record cannot be changed once a deal completes. Finance firms believe the technology has the potential to strip out a huge amount of cost by speeding up transactions and removing the need for people to work through a clearing or settlement house.
Santander has estimated $20 billion worth of savings can be made using the technology and Goldman Sachs claims the technology could revolutionize ‘well, everything.’ But Citi warns that there's a risk the technology could also reduce banks to just "dumb pipes" — simply infrastructure providers who let more nimble fintech startups funnel money around, deal with clients, and, as a result, take home the bulk of fees.”
Now this seems like a scenario that should have incumbent market players’ attention, and thinking deeply about new directions and ways to sustain customer value.
You can read the entire, thought-provoking article here: