Undoubtedly, blockchain represents a conceptual truth, capable of resolving fundamental issues we are currently struggling with.  However, let’s agree that the road is long and the overuse of the related buzzwords works contra productive, is time-consuming and is burning wealth. Take bitcoin as an example.  It appears to have profound similarities with the Amsterdam tulip mania in the Dutch Golden Age during the 17th century. Maybe, one day, we can add a new chapter about cryptocurrencies in the early 21st century to Charles Mackay, in 1841 published, ‘Extraordinary Popular Delusions and the Madness of Crowds’.  

Nevertheless, underneath the fintech and crypto hypes, healthy stuff is happening.  Blockchain, as a catalyst, redirects banks from anxiously protecting their legacy to walking the proactive path of questioning their purpose in a new world.  Most bankers confirm that innovative benefits, deriving from fintech activity and blockchain application, supports the necessary transformation, moving away from the old school profession of skimming interest income and posing a creative range of fees.  The times of exuberant income are fading, and it is time to concentrate on end-to-end solutions, reducing the heavy cost load incurred by the current system frameworks. By thoroughgoing cost reduction, banks will be able to sustainably influence their P&Ls, compensating for the impactful revenue reduction deriving from fintech disruption.

It means that the primary challenge became principally short-term.  Persuading shareholders to give up an immediate return for a new future, is more challenging than getting investors pumping loads of cash into ideas and gadgets that might probably nullify.  Wisely spending digital budgets and understanding the long-term strategical goal without focusing on the short-term tactical marketing lipstick, becomes the ultimate competitive advantage in today’s digital banking world. 

Banks who fundamentally comprehend this mechanism, are smoothening the path of making the right economic choices for digital success.  Others should realise that once the thick layer of make-up eventually dries out, failure will grab them and the necessary in-depth transformation derails while the related financial efforts go up in smoke.

Short term wow-effects are no drivers for adoption. Today’s customer is not impressed by bells and whistles but addicted to speed with a minimum of clicks.  Successful applications are problem-solving and end-to-end.  If not, the effort is reduced to a degenerative digital smoke screen putting an 'expensive' wooden leg in plaster.

We’ve work to do!

Fred