The Blockchains + Digital Currencies conference was held on July 28, 2016, in New York. Leaders and entrepreneurs in the banking and fintech industries discussed how blockchains and cryptocurrencies, such as Bitcoin and Zcash, can help reengineer banking processes and provide faster and more secure financial transactions, as well as cut costs by billions of dollars.
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Banks Struggling to Keep Millennials
One of the many topics discussed at the conference was how to use blockchain technology to speed up the flow of money globally and make business processes more efficient and transparent. The importance of blockchains in the banking system is ever increasing.
Indeed, as participant Eileen Lowry Program Director, IBM Blockchain Offerings, tweeted:
10% of global GDP will be stored in a blockchain by 2027.
Traditional banking processes have become obsolete, and therefore they are unable to support the new economy. Banking transactions are still expensive and too sluggish. Although they are trying to catch up now, banks have been slow in adopting mobile banking. As a result, customers, and millennials in particular, are moving away from banks and preferring to perform their financial transactions using their smartphones.
“Many millennials are opting out of the banking system,” warns Victoria van Eyk, Management Consultant, Bitcoin Strategic Group. “They do not even want to use credit cards.”
Various Blockchain Models Discussed at Conference
Therefore, banks are trying to bring themselves up-to-speed by exploring full steam the potential of blockchains. For example, at the recent Blockchains + Digital Currencies conference, Eddie Ortiz, VP Solution Acceleration and Innovation, Royal Bank of Canada (RBA), mentioned that the RBA is actively looking at different blockchain models.
He asserted that the promise of blockchain technology is quite significant. By using blockchains, banks will obtain the standardization necessary to allow for easier and simpler communications. Moreover, “Blockchain allows connecting business processes more easily,” Ortiz said.
Panelists also tackled concerns about the slowness and costliness of cross-border payments and how blockchain technologies can help.
Caitlin Long, Investor and Advisor, said that many institutions are looking for cheaper ways to move money because many banks (for example, banks in Barbados) are being cut off from correspondent banks. Correspondent banks are essential for facilitating cross-border transactions, such as remittances and international trade.
Additionally, co-panelist Graham Warner, Director, Americas Head of GTB, Product Development Deutsche Bank, said that Deutsche Bank is working on the development of smart contracts and anticipated that “soon there will be amazing ways to move money.”
Simplifying Cross-Border Payments
Another speaker, who is a major player in the micropayment and remittance industry, was Bill Barhydt, Founder and CEO, Abra. He explained how he solved the problem of moving money globally. He worked on the problem of exchanging money internationally for over ten years until he found the solution: The elimination of intermediaries and the use of Bitcoin blockchain technology and smartphones.
Barhydt introduced the concept of the Bitcoin blockchain-based digital dollar. Abra is a digital wallet app residing on smartphones. It is a peer-to-peer model, in which there are no middlemen.
“Bitcoin is the asset the consumer holds, using smart contracts,” Barhydt said. It involves Abra Tellers. They act like human ATMs, who buy and sell digital currencies. “There are already individual Abra Tellers in 90 countries,” he added. Consumers are unaware that they are using bitcoins during the transactions because they see only their local currencies. You can read more about the Abra app here.
Using Bitcoin technology for cross-border payments and remittance services is continuously expanding. Sheila James, VP, Operations, Align Commerce, explained how the company provides services to small businesses, such as local bank to local bank money transfers within 10 minutes. With only their email address, users can send and receive money to/from over 60 countries. To achieve this level of speed and simplification, Align Commerce bypasses correspondent banks by using Bitcoin and its underlying blockchain technology.
The Blockchains + Digital Currencies conference also included a wide range of other exciting topics, which revealed the potential of blockchains to enable financial institutions to provide fast, secure, and cheap financial transactions. As shown above, Bitcoin’s blockchain technology is already being used in building new business applications.
Participants’ expectations are high: More amazing blockchain-driven solutions are coming, and soon!
Do you think millennials will increasingly opt out of the traditional banking system? Let us know your comments below!
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