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From Banking to Blockchain


Since the 1990s, things have changed at a surprisingly fast pace compared to past trends. These circumstances have also affected my life, so much so that I have unconsciously acquired a mentality strongly oriented towards disruption and evolution. This newly acquired consciousness is reflected in the current way of running businesses, managing companies, and conducting projects.

Our minds are getting accustomed to this continuous change and to the speed with which these changes occur to the extent that we want to feel like active ambassadors of this disruptive movement.

It was with this spirit in mind that I decided to move from the banking world to the innovative world of Blockchain.

For years I have witnessed strong shifts in the financial industry; however, these changes have not, until today, led to a substantial turnaround of the active market players which have been almost the same for the past two decades. The same remark could be made for products and services offered by financial services providers, which have not undergone any significant variation in comparison to other industries.

The reasons are complex and varied, ranging from monetary policies that have driven interest margins nearly to zero, to exorbitant operating costs, to changes in international regulation, to policies enforcing preservation of technically insolvent companies and much more.

The real revolution will be driven by the Millennials, the most influential generation from here to the next decades, which shows no evident confidence in “classic” financial institutions and is more attracted to the services provided by companies of the likes Google, Amazon, Apple and PayPal.

Millennials are strongly oriented towards change and innovation, they do not like being bound by outdated schemes. They do not respect hierarchical systems and do not like uniforms; their life models are inspired by Silicon Valley; made up of sweatshirts and sneakers.

This attitude suggests that Millennials will likely be the most equipped to lead the digital revolution of asset management.

Having grown[1] up in a world where the digital sphere is the absolute master, Millennials are used to immediately find[2] ing the answers they are looking for, to having a quick and direct interaction with electronic devices, to get[3] ting information online and to surf[4] ing the internet to engage with peers and create relationships, sometimes even exclusively digital.

Thanks to the exponential increase in innovations affecting the world of finance and technology, many FinTech companies have emerged and entered the financial market which they cannot significantly penetrate on their own, but the path to change is now paved and more than mature.

In my opinion, traditional banks will be forced to specialize, focusing on the development of distinctive skills in financial consulting, the creation of alternative investment instruments and financing solutions. To fully exploit the information network in pursuit of enhancing customer experience and commercial potential, financial providers will have to rely on developing algorithms which acquire, select and process information on the network, transforming banks into fully-fledged tech companies.

The payments market will strive towards disintermediation through the implementation of Blockchain-based technologies; investments will be increasingly handled by highly efficient algorithms and loan management will resort to AI algorithms to process big data.

Hence, we get to my natural transition from the financial industry to the realm Blockchain Technology.

By now, you will have noticed that we are currently experiencing a period of strategic challenges that have concentrated in[5] just a few months two phenomena like Instant Payment and PSD2 and in perspective Open Banking. This is a clear indicator that for banks a new chapter of innovation is now wide open.

In this scenario, for banking institutions, it becomes strategically relevant to address the Blockchain theme head on. It is no longer just a question connected to the fact that “we talk about it so much”, it is now clear how Blockchain and DLT (Distributed Ledger Technology) offer alternative solutions for companies in the Banking and Finance sector, ranging from processing payments quickly and more accurately, to reducing operating costs and managing security, identity and contracts.

Several banks initiated their projects by implementing the PoC (Proof of Concept) tool; other institutions are in the preliminary phase of defining their Blockchain strategy or have just begun to examine the relative potential and opportunities to exploit. The main area of interest appears to be related to intra-group foreign transfers: services related to cross-border remittances, corporate payments and inter-bank cross-border transfers. The advantages that will be derived from utilizing the Blockchain are particularly relevant with regards to operating costs, speed of services’ execution, reduction of errors and of course increase in profitability.

An important success driver will be the creation of an extensive professional culture linked to the Blockchain for experts and professionals who will be able to support the implementation, integration and activation of Blockchain technology.

As for my role, I represent the link between the banking system and Blockchain technology, thus facilitating the dialogue between two worlds that are so close but yet so far away.


Author: Maveric SA | Date: 2018-09-19