How should banks react?
As the financial service industry is moving from the exploration phase to the application phase for blockchain, banks need to understand the future role of blockchain and its impact on banking services if they want to take advantage of this financial revolution.
Success will depend on how banks quickly respond to opportunities for innovation. Used effectively, disruption is key to driving organizational change and taking the business to the next level.
Disruption can be a valuable way for banks to reinvent their organization by challenging competitors and identifying growth opportunities. To be able to work effectively in the new eco-system, banks should identify radically new ways to conduct business. They, therefore, have to change their old business models and personal skills and create new, viable models for the blockchain age to be able to combat new competitors.
“It’s a very interesting space to watch. It’s clear that blockchain has the potential to make finance more efficient, but the big players are well-established. And establishments don’t tend to favour innovation. I’d keep an eye on the start-ups who want to disrupt, but also know how to play nice with the institutions.” Jeff Koyen
Forward thinking
While the process of disruption triggered by blockchain technology has only just begun, many expect it to speed up soon. This and the coming years we will – as a result - see a lot of changes in the banking industry, while new players will enter the market. Blockchain may eliminate some roles in financial services in the short term.
Although the financial industry is thrilled about blockchain, the technology will take a few years to become a mainstream financial model. That means that disruption will happen gradually – but surely. In the meantime, banks have the time to prepare and adjust so that they can have a “second life” in a blockchain world.
The way blockchain is driving disruption in the traditional financial services industry is however not straightforward but may occur in both obvious and not so obvious ways. The future of the financial services industry will thereby depend on how the various stakeholders including banks capitalize on this technology and how they interact with each other.
But when financial institutions fully adopt this technology, we should see these gained efficiencies in the form of lower fees for consumers, creating a renewed promising customer experience by banks.
In that case, these banks may survive ….