Digital currencies and distributed ledger technology will have huge and unpredictable implications for banks, increasing efficiency in some business segments and inviting competition in others. Eventually it could completely transform their relationships with clients.
The distributed ledger has the most obvious potential for banks in payments, syndicated loans, trade finance and know your customer (KYC) compliance, according to Christophe Van Cauwenberghe, head of payment innovation at Societe Generale.
In part four of our digital currencies series, which we are publishing in collaboration with law firm Baker McKenzie, we are asking how banks are embracing the blockchain.
While for now it remains next to impossible to say specifically how things may change, one thing is clear: no matter how disruptive distributed ledger technology may be for banks, it is always better to embrace new technology and adapt than pretend it isn’t happening.
If you would like to catch up on our digital currencies series, you can find our earlier publications here:
Part 1: Life after quantitative easing: Digital currencies could be a powerful tool for central banks, but there are risks
Part 3: Banking on the Blockchain. An interview with UBS’ Head of strategic investment and fintech innovation, Hyder Jaffrey.