Banking
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Contrary to common belief, traditional institutions are hesitant to allow the use of cryptocurrencies despite their rapid growth and increasing popularity. They reason that the inherent risks exceed any potential benefits. The OCC is trying to change banks’ perspectives on digital currencies, believing that these assets may propel the financial industry into a new age of productivity and creativity. The OCC is one such regulating body.
In this article, we’ll explain why banks are concerned about cryptocurrencies.
Cryptocurrencies are seen as a threat rather than an opportunity by 63% of those who work in the financial industry, according to an investigation.
Decentralization in Nature
To give an alternative to traditional banking infrastructure, crypto assets were created that do not need an intermediary and are not connected to the capability of any central government, financial institution, or regulatory organisation. There are no intermediaries involved in these transactions, instead relying on the blockchain code and the blockchain’s distributed nature.
AML/KYC: A Source of Concern
Transactions may take place without the need for a regulated intermediary, making it possible to transfer money quickly and easily without having to pay transaction fees. Transactions are not tied to a single bank account or handled by a financial institution, but rather are linked to the blockchain’s unique transaction ID.
Volatility
The value of cryptocurrencies, particularly bitcoin, has fluctuated widely over their short life. The number of market participants, the size of the market, and the liquidity of the market all play a role in this phenomena. Concerned banks think that the currency will not be a trustworthy investment vehicle in the long run because of the currency’s volatility in the past.
The future / trends of banking business
It is safe to say that the banking business of the future will look quite different from the one we see now. Banks will need to begin planning for the future of banking in 2030 now because of changing client expectations, growing technology, and new business models.
Banking business case from operations (or else)
To prepare for the revolutionary impact that digital technology will have on banking operations in the future, financial institutions must participate in strategic planning at the board level. Banks might provide better products and services as a result, which could lead to an increase in income.
Banking innovation
Technology innovation in the banking industry is used extensively in order to achieve competitive advantage, since it helps banks to improve their services while also enhancing cost efficiency, because less staff and traditional branch locations are necessary.
The banking sector and its customers will look at the future quite differently in 2030. When it comes to banking, banks have an incredible opportunity to develop a foundation for delivering personalised, differentiated (and advice-focused) value to their customers in the future.
