Traditional Banking vs. High Tech – What Future For the Banking Sector?

Between the creation of the new currencies, such as cryptocurrencies, what will tomorrow’s banking look like? While people worldwide are demanding more transparency and simplicity of their transactions, the emergence of blockchain and bitcoins raises the questions of the future of the banking sector.

In monetary transactions, blockchain technology for storing and transmitting information can be compared to a public ledger, anonymous, and unforgettable. The database was created in 2008 by Satoshi Nakamoto, along with bitcoin, already appealing to many companies thanks to its value tradable internationally.

Bitcoin: from B2B to C2C?

The first neutral and egalitarian world currency, which has already attracted a large number of companies since its creation, also has another advantage: its peer-to-peer economic exchange model. This model implies that each entity on the network is both client and server, meaning that bitcoin represents disintermediated and secured transactions in B2Bs as well as C2Cs. Bitcoin price has grown exponentially from $ 1,100 in May 2017 to $ 19,500 in December (+1 672%) today at $9,223

If financial transactions between companies are already carried out largely without the intervention of a third party, disintermediation is increasingly attracting the private sector, responding to the demand for ease of use and transparency of consumers. Therefore plans to expand it to financial transactions between individuals.

In the short term, it’s still hard to talk about a cryptocurrency revolution because of its lack of regulatory and fiscal frameworks. However, the accelerated pace of innovations in payment media and the meteoric growth of adoption of these methods among consumers tend to change the situation.

The Position of Big Economic Players

While the Japanese financial authorities widely promote technological innovation, by granting cryptocurrency already a self-regulatory status and possible use in almost all sectors, consumers worldwide are perplexed as to the introduction of new technologies as a means of payment.

Many banks are already convinced of the usefulness of blockchain in the financial sector, as demonstrated by the creation of the first international interbank information network (INN), launched on an experimental basis by the American investment bank JP Morgan in 2017, already joined by more than 75 members. If the initiative should allow an acceleration of international interbank payments and reduce its costs, the fact remains that an extension of blockchain to the private sector tends to modify the banking sector’s very structure.

Are Traditional Banks Doomed to Disappear?

If the blockchain leads to the final disintermediation of financial transactions, what is the future of traditional banking? 

The traditional banking sector will have to modify its customer service in depth to measure up to the competition created by virtual currencies. Also, it will be a question of concentrating on the protection of personal data in the context of financial transactions.

 The services offered by the various establishments in the tertiary sector will relate to the agreements concluded with the different types of emerging blockchains in terms of cryptocurrency. Traditional banks will then have to take on the role of regulatory authority to enable technological innovation.

Fortunately, many online banking platforms understand the needs of customers who always strive to be a step ahead. Banks offering digital wallets for their clients are the best choice for those searching for personalized and timesaving digital banking experience. 

If you are one of them, open your digital account for whatever purpose you want, business, or personal, and all will be accomplished in a blink of an eye. Tracking of your savings and transactions is at your fingertips. After your registration at the website, you will also have the opportunity to get an international bank account. In case you are into cryptocurrencies, you pay minimum percent for OTC fiat money for crypto services and receive your money within a minute. 

Conclusion

The center of the progress and changes in banking should start from the users’ perspective, from their needs. When it comes to the capability of banks to adopt new technologies, the question is no longer technology itself, because it is already available. What makes the difference between banks who are successful and those who are less is the capability of understanding customers’ needs, problems, and challenges that all mankind is facing.

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