Major financial services corporation, Standard Chartered, believes that while banks are benefiting from the digital revolution, they’ve barely scratched the surface of its potential.
In most cases, whenever the virtues of blockchain are extolled for the real world, the financial sector is mentioned. This makes sense as the industry relies heavily on paper-based processes and record-keeping. At the same time, it needs to offer security to customers as it’s their hard-earned money that is at stake.
The digital revolution is opening so many doors to traditional financial institutions that will help them streamline time-consuming processes like cross-border payments and offer services to many of the world’s unbanked population. There are many firms that are already making use of disruptive technology like blockchain, artificial intelligence (AI) and machine learning (ML). Standard Chartered is one such institution that is banking on this type of technology.
Standard Chartered Believes in Transformation through Digitization
According to the Bangkok Post, the corporation’s Group Chief Executive, William Winters, believes that these technologies, including cryptocurrencies, will drastically change the way banks operate. He said that “the ways that we make money today will be completely different from the ways that we will make money in 20 years, or even 10 years”.
It would do these banks well to get ahead of the trend, which is what some of them appear to be doing. Standard Chartered has spent billions of dollars over the years in system and process upgrades that make use of digital technology. Even though improvements are evident, Winters believes that banks haven’t even enjoyed 1% of the potential that these new technologies present.
The bank recently launched its first-ever digital-only bank in the West African country of Côte d’Ivoire also known as the Ivory Coast. Winters touched on the reception it had and said that “it’s been very well received. Clients can conduct pretty much any service that they could in a branch, other than the physical handling of cash”. He also explained the bigger benefit:
And it’s great for financial inclusion. So people who had been unbanked, or underbanked, get access to the financial system beyond the payment capabilities that they had on their phone already in the form of electronic wallets and other things of that nature.
No Threat to Human Resources
However, this growth of digital processes does not necessarily spell the end of all human interaction. According to Winters:
People will appreciate advice from a human being long after it’s clear that the machines are actually smarter, because the machines will never have the emotional quotient of a human being. At least that’s my conjecture … as a human being. I like to have access to a human from time to time to make important decisions.
As a testament to this, Winters has said that while technology has automated and streamlined many of their processes, it has not impacted the number of employees. In fact, this number has even increased in some cases. This is because more staff is required to deal with regulatory compliance as well as developing even more digital solutions.
However, the arguable vision for cryptocurrencies, and perhaps disruptive technology as a whole, is to encourage peer-to-peer interaction and to remove intermediaries. It is also to give financial autonomy to the people and foster financial inclusion even for those who do not belong to a bank.
Do you think that there will always be a need for brick-and-mortar banks? Let us know in the comments below!
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