The chief executive of Canadian Imperial Bank of Commerce (CIBC) recently expressed his opinions on the disruptive payment technologies like Bitcoin.
Victor Dodig, who was attending the launch of their new mobile payment application Suretap in Toronto, said during a Q&A round that CIBC does not feel threatened by the challenges Bitcoin and similar peer-to-peer technologies pose to its business; instead, the bank is closely studying them in the interests of its own benefits.
Dodig meanwhile rubbished the theories that favors new payment platforms over traditional banking sectors, especially when it comes to abducting the latter’s market share. “Will clients move in droves to these new technology platforms to do their lending,” he asked himself and stated:
“I don’t think so. It won’t happen that quickly.”
As Dodig noted new p2p payment startups as less-severe threats to CIBC, he never shied away from accepting peer-to-peer lending platforms as serious competitors. The disruptive lending platforms, as noted by many, has eased down one’s attempts to secure loans — without the need to go through banks. Dodig believed that such kind of competition would certainly force bankers to chop down their fees.
Recently, a US-based loan financing service, called OnDeck, made an entry into the Canadian markets and is reportedly attracting adequate attention for its easy small and medium loan services. The NY startup has literally saved people from getting involved in mind-boggling documentations, weeks of waiting and — none the least — facing rejections.
Dodig’s comments simply pointed finger at such startups whose innovation could seriously damage the banking sector. He however reminded people of tendentious regulatory frameworks that have given such startups a “competitive advantage” over banks.
“The regulation is still evolving as to whether they’re securities companies,” said Dodig.
He, in the end, recalled their long-standing relationships with the customers which, as he believed, is enough for them to continue without being threatened by a rather unknown sector like Bitcoin.
But for how long?