Since Bitcoin became popular, it has been hailed as the revolutionary technology that is going to change the financial landscape of the world. While it is true, the role of Bitcoin may not be any bigger than the contributions of ATMs and PayPal.
The evolution of Fintech has been a gradual process starting as early as 1970’s. A recent report published by Business Insider Intelligence states that it is an ongoing process and the impact can be much bigger than that of ATMs, PayPal and even Bitcoin on the financial system.
ATMs changed the way people interacted with banks, leading to a certain degree of automation. Then came PayPal which reduced the dependency on banks for storing and transmitting funds. However, PayPal account holders were still required to fund their account using conventional payment methods. But Bitcoin brought in a new level of disruption, where it showed that banks can be totally eliminated from the big picture.
Bitcoin may not have succeeded in replacing banks completely at the moment, but it has exhibited the potential to do so. The new-age of finance now hinges on Bitcoin, its underlying blockchain technology, and the startups that are working on it. The latest report titled “The Fintech Ecosystem Report: Measuring the effects of technology on the entire financial services industry” offers a peek into the future of fintech.
It paints a picture of the war between established financial powerhouses and startups that are re-engineering decades-old practices. Like any battle, there will be losers and winners, who is who will be decided in the course of time.
An example of few battles that are part of the larger on-going war includes traditional retail banks against online-only banking systems, traditional lending against peer to peer marketplaces and crowdfunding and traditional asset managers against robo-advisors.
In all these cases, the newer alternatives are driven by technology, including the blockchain and they require minimal human intervention. The report foresees transformation in the areas of retail banking, lending & financing, payments & transfers, wealth & asset management, markets &exchanges, insurance and blockchain transactions.
“Fintech will soon change the nature of almost every financial activity, from banking to payments to wealth management.”
There is currently no clear winner at the moment. Both traditional financial institutions and new-age startups are trying to overcome their own challenges to come up with a winning solution. It is a matter of survival for both the parties alike.
While the report presents a picture of fintech being beyond one or two inventions, it still refers to Blockchain technology as a trump card. Whether Bitcoin as a currency will change the financial system or not, but its underlying technology is in everyone’s crosshairs.
The cryptocurrency community doesn’t really need a $495 (0.87 BTC) report to understand the implications of blockchain technology on legacy processes and systems. But coming from reputed organizations, it reinforces the faith in cryptocurrency and distributed ledger technology.
Ref: Business Insider | Image: Shutterstock