The blockchain industry has come to an interesting crossroads. On the one hand, major banks are pushing to deploy this technology as soon as possible. But on the other hand, there are those who think this is all just hype and do not see a first mover advantage. David Gunn, a financial analyst, feels this lackluster attitude will end up costing the banks a lot of revenue in 2016.
Should Every Bank Get A Blockchain?
While the obvious answer to that question is “no”, there is something to be said for at least showing interest in the concept. Banks are having a hard time dealing with innovation and change, as they always have. Not getting involved in distributed ledger technology could lead to reduced revenue, of up to US$150bn.
Bain’s David Gunn, a financial analyst, stated the following:
“The wave of investment in digital currency startups clearly signals that payments channels are attracting a new degree of interest, and new competitors are changing customer expectations. Innovation is upon us, and doing nothing is not a viable option. Now is the time for banks to move from experimentation to action.”
Moreover, it seems as if banks have taken the wait-and-see approach to blockchain technology, which is a wrong decision. Instead of running valuable trials and experiments, financial institutions have been participating in conferences and twiddling their thumbs. Sooner or later, distributed ledgers will impact trade finance and international payments. Right now, banks are not prepared for this change.
Truth be told, researching the potential and impact of this technology takes time, and everyone understands that. But remaining in limbo in the “experimentation stage’ will hurt these institutions more than anything. Granted, there are challenges and issues to look into, but a more active approach is well warranted at this stage.
The potential of distributed ledgers is well documented by now. The entire financial ecosystem has been designed to generate a lot of revenue for individual banks. Failure to participate in blockchain efforts will cut into the revenue gains year over year until proper solutions are created. Whether or not these findings by Bain will force a rude awakening for the financial industry remains to be seen.
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