Boston Consulting Group (BCG) published a report on the possible threat to banks from crypto firms entering the industry. The report claims that crypto firms like Ripple might be able to outperform banks anytime soon if they do not develop. The surge in interest of people in cryptocurrency is expanding due to the profit and safety features of it. This BCG report gives an in-depth analysis of both traditional and new payment systems. Also, it has specified the difference between both the payment systems and attention to the new technologies.
BCG Appeals Financial Institutions to Develop New Solutions
The report claims that payment providers like Ripple are doing great as compared to banks in many different areas like speed, pricing, and customer experience. BCG has claimed that the integration of blockchain technology could help the banking system provide better competition.
BCG also urged banks and other financial institutions to develop new solutions in order to stand in competition with these crypto firms and blockchain-powered firms. The SWIFT API system is considered to be one of the most prominent in the banking industry. It has more than 11,000 financial institutions connected to it. However, blockchain-based solutions are having much potential as compared to this in terms of cost and speed.
Banks Need to Modernize Their Business Process to Beat Ripple
BCG has claimed that to remain in the competition and not let the blockchain-based firms to outperform them, banks need to modernize their whole business process. The reduction of the cost base, increase in operational efficiency, and modernization of banking systems could help the banking system. The digitization process of sending and receiving transactions also needs to be reviewed and improved. Banks also need to establish global standards for the KYC process as well. The report has mentioned dozens of other things as well that banks need to look to compete with Ripple-like firms.