Crypto 101 for banking system: How to Survive & Thrive for a bank in the wake of Cryptocurrency: The traditional financial system is based on the safe tracing, storage, and transfer of assets and valuables. Its infrastructure has evolved over several centuries, and in general, the banking system manages to perform these functions, although not 100%. The emergence of blockchain technology made possible the existence of decentralized platforms and has demonstrated that it is safe and secure to store and transfer assets without using banking structures.
Crypto 101 for banking system: How to Survive & Thrive for a bank in the wake of Cryptocurrency
The traditional financial system is based on the safe tracing, storage, and transfer of assets and valuables. Its infrastructure has evolved over several centuries, and in general, the banking system manages to perform these functions, although not 100%. The emergence of blockchain technology made possible the existence of decentralized platforms and has demonstrated that it is safe and secure to store and transfer assets without using banking structures.
What will happen to the banks with global blockchain adoption? After all, they are those traditional players of the financial system, which both maintain the system and are dependent on it. It won’t take too long for a bank to switch to the blockchain. So basically, with the development of fintech, they will not disappear but have significantly fewer employees. It’s estimated that the largest bank today will hire only 50 people in 50 years. Bots, processes, and smart contracts will replace the rest of its employees. A textbook bank clerk is likely to become endangered. So it’s now clear that some banks need to consider some severe transformation not to be forced out of the industry, but to adapt to the volatile environment. Here is the shortlist of the basics a bank needs to prioritize to survive and prosper during the wake of decentralization and cryptocurrencies.
It’s all about convenience
The convenience of making a transaction or using any other bank service is a compelling reason why many would prefer crypto to a traditional and overly bureaucratic bank. Round-the-clock services and mobile solutions are the perks of adopting blockchain into the banking system today. Banks could steal the thunder from yet shadowy crypto transactions by partnering with the respected fintech projects, with the recognized expertise in building and scaling decentralized systems.
In its range, MetaHash stands out as the solution provider of the kind. Owing to the enormous number of transactions, that can be processed, together with the uncompromising security of the network, this solution exceeds the existing crypto, like Bitcoin with has the risky 10 minute-long transaction approval time or EOS which as a banking system fails to provide the necessary level of decentralization. Thus, looking closely to the projects, like Metahash that develop a one-stop solution for a bank catch up and overtake the financial supremacy.
Specialization and localization
Despite the common belief in the almighty crypto revolution, cryptocurrencies will be unable to replace the banking system entirely. Expanding its services to where crypto faces limits is another winning strategy for a bank. As a bonus, this will help to eliminate all the deeply hated routine, that makes everyone scorn upon the white-collar work of a bank employee. Instead, they could focus more on providing the type of job where an acquisitive human mind will not be likely completed by a machine or an algorithm, namely — analysis, in-depth research, and comparison, which are a must delivering complex services to business clients. Underwriting, risk evaluation, and assisting their clients in solving the essential development challenges of the business of their client could become bank domain in the years to come.
Credibility and authority still form a competitive advantage for a bank. Thus, investing effort in using blockchain to rebuild trust among the public, which now is skeptical towards putting their full trust in one bank, due to the negative record of these financial institutions during the crises, seems to be a viable to-go option. The decreased fees for services, higher decentralization, and the realization that rethinking of the industry is taking place will be vital in regaining trust for these financial institutions.
For now, it’s undisputed that the timely adoption of emerging technologies offers good prospects of success. The most obvious advantage is the ability of a bank to track the entire financial path of the assets at any time. Equally important is the increased level of bank security using blockchain technology, in contrast to its traditional counterpart. But it should be noted, and the main disadvantage of using this innovative technology is its low scalability in comparison with centralized systems. However, the elimination of this deficiency is only a matter of time.