For decades, central banks paved the way for smaller commercial banks to grow and expand.
But now there is a potential disruption in the wake of the emergence and adoption of blockchain. This is more than just a buzzword, but the potential evolution of the financial services ecosystem.
Commercial banking institutions are tired of waiting around for central banks and are taking matters into their own hands.
Already, we see, large financial institutions and banks, playing around with blockchain technologies. If smaller commercial, investment banks follow their lead, and then this could potentially eliminate tens of billions of middleman fees annually within next few years.
It’s no surprise more financial services are investing in blockchain. After all, it’s the key to enhancing accuracy and information-sharing – things the financial sector could definitely use.
Disruption: It’s a Data Game
In the banking industry, it’s all about data. Sure, there’s money involved as well, but the value of that money is determined by the currency it’s holding. In other words, money is represented by data.
Blockchain technology introduces cryptocurrencies, such as Bitcoin. This presents the potential option to traditional currencies, which encompasses everything to do with today’s banking.
This is exactly why central banks are pondering adopting blockchain technologies and even launching digital currencies. And it will potentially go beyond currency to the exchange of value in bank transactions, assets, shares and other investments.
The issue with today’s banking is that although data plays an intricate role in the industry, it can be hacked or corrupted. Blockchain technologies can empower banks and financial institutions to protect their precious data and better serve their customers.
If banks continue to lean towards blockchain, we will soon see a major disruption in how we do banking. And it will more than likely be for the greater good.