A new fintech report by the Massachusetts Institute of Technology (MIT) has legacy banking will “undoubtedly disappear” and that future banking will need to handle both private and state-issued virtual currencies.
Also read: Bain Blockchain Report: ‘Wait-and-See Approach’ Wrong for Banks
MIT: Legacy Culture ‘Inhibits Innovation’
The report, dubbed “DIGITAL BANKING MANIFESTO: THE END OF BANKS?” was released this month by Alex Lipton, David Shrier and Alex Pentland of MIT’s connection science and engineering department. It is part of a trend, which reflects growing opinion in economics circles that disruptive fintech will be unavoidable in the future global financial landscape.
“[Banking activity] is well suited to be digitized, yet the prevalence of legacy systems and legacy culture inhibits banks from embracing innovation as much as they should in order to survive and thrive in the digital economy of the 21 century,” the report says.
“The root causes of banking malaise should be obvious – old-fashioned banks are far behind the latest technological breakthroughs; they also have a poor handle of the risks on their books.”
This “poor handle” has been underlined many times in traditional institutions’ statements and paperwork surrounding Bitcoin in particular. From incorrect usage of certain terms to outright