Are Banks and the Capital Markets Ready to Embrace Blockchain?

Very few banks, or even countries, emerged unscathed from the rubble of the 2008 global financial crisis. The aftermath of the worldwide recession coincided with profound technological innovation and breakthroughs that have forced banks and other financial service providers to reconsider their approach to doing business. New regulation and investor demands have forced banks to move toward a more efficient, transparent and compliant operating model. Although Wall Street has cottoned on to these developments, the big question still remains: Are banks ready to leave old business processes behind to embrace new blockchain-based technological breakthroughs?

Now, more than ever, distributed ledger technology offers real-time solutions for banks to overcome the challenges sweeping across the financial world. Immutable data storage and tracking records can offer cost-savings on an enormous scale for banks while removing cumbersome manual processes. All of this will serve to boost value-added activities and better manage banks’ compliance and risk management operations. As the coronavirus pandemic sends markets into a tailspin, banks are once again facing the same crossroads, which lay before them between 2008–2012.

Can capital markets replicate the fintech payments revolution?

It is fair to say that something of a fintech revolution has already swept across the payments landscape. Digital banking mobile apps and business-to-business payments technology have been enhancing the user experience in sending and receiving payments. Companies such as Stripe are processing billions of dollars in online business transactions per year, while crypto exchange Coinbase has branched out to offer broader services. The lower transaction costs, improved technology and multi-service offerings of these fintech companies have greatly enhanced payment services for millions across the world, which has, in turn, disrupted and challenged the status quo of traditional retail banks.


Source Link