The shockwaves felt have been so real that 88% of incumbents are increasingly concerned they are losing revenue to innovators and 77% expect to adopt blockchain as part of an in-production system or process by 2020. While these innovations might seem daunting to banking institutions, they show positive trends for the housing industry asP2P lenders become more popular and provide more financing options.
Changing Technologies But Not Fundamentals
Most banks note that they desire to use these changing technologies as a way to improve customer service and their processes. The idea of hundred-years-old institutions going extinct has some adopters of fintech noting the importance of preserving ideals while adopting the changes and using these innovations to engage in a deep reprogramming of their processes to enhance speed, convenience and trust in order to get at what is most important: the customer. Ben Hung, regional CEO for Greater China and North Asia at Standard Chartered Bank, noted that while these technologies allow banks to better assess the needs of their customers and manage their money in a more streamlined way, the process still feels very daunting due to the rapid rate at which fintech advances and creates new technologies to adopt and incorporate.
The Future of Banks in a Cryptocurrency Economy
Not only is the fintech industry developing technologies that use thing such as artificial intelligence and machine learning to better assess and address the needs of their customers, but it is also throwing blockchain and cryptocurrency to further disrupt the banking industry, and government, on a very deep level. Due to the rise of cryptocurrency, governments wouldn’t have a monopoly on the money and banks wouldn’t be physically holding onto the cash. This would cause the entire global system of banking, as well as the credit and debt system, to change radically. Due to the fact that banks have traditionally been used to store money, part of their function in the financial world has also been in relation to loans given out to customers on the basis that the debt owed by the client would be cleared in a manner agreed upon.
Blockchain Changing the Dynamics of Lending and Real Estate Markets
Similar to the way that banking institutions would have to adapt to an entirely different borrowing, lending and credit system, these fintech changes have and will continue to affect the housing industry and other smart home technologies as well. Unlike the extinction that banks face, however, these changes have largely been positive. Traditionally, the more the bank is in the position to leverage its holdings, the better it is able to function, and the power will be returned to the people. Companies that are using blockchain smart contracts and tokenization to facilitate enhanced P2P home mortgage funding are encouraging first-time buyers to become homeowners.
The Future Extinction of Banking
While various core systems of banking and financial systems will change when crypto-currencies take over and fintech begins to dominate the economy, the monetary exchange will operate in a large way the same as cash exchange. Despite the daunting feeling that banks will face extinction, it seems that they are adjusting to the rapid rate at which technology is advancing in order to implement and adopt the changes in a way that benefits their customers in various sub-industries such as the housing market.
– Chrissy McCarthy