Header graphic for print
Steptoe Cyberblog

FinTech Bits: Smart Banks Are Banking on the Blockchain

Posted in Blockchain, Virtual Currency

In an area that is growing and evolving as fast as FinTech, it’s often difficult to take a step back and take stock of where we are, and where we’re headed. So kudos to CoinDesk, which recently issued its State of Bitcoin report for the second quarter of 2015, its seventh such report since February 2014. The report is a great read that contains a number of terrific insights into trends and developments in Bitcoin and other digital currencies. One of the most interesting aspects of the report related to the significant number of banks throughout the world that are experimenting with use cases for blockchain technology. The report cited Santander, Barclays, UBS, and BNY Mellon as among the global banks exploring the potential of the blockchain.

That dovetails with reporting from CoinTelegraph and other sources that these and other large banks are increasingly studying possible use cases for bitcoin and the blockchain to reduce costs, increase speed and efficiency of transactions, and provide greater security and transparency. (To that list of advantages we would add reduced compliance costs, which are an increasing issue for banks.)

Meanwhile, a recently released book from Adaptive Labs suggests that banks are ill-prepared for the potential disruption to their business models that FinTech innovations, including the blockchain, represent.

The takeaway from all of this? Banks, money remitters, and other financial institutions would be well-served to join the growing list of organizations that are studying possible applications for digital currencies and the blockchain to enhance their business, lest they be left behind by a wave of innovation in FinTech. Better to disrupt your own business model from the inside than to see it disrupted from the outside.