Research: Banks Unprepared For Digital Disruption

AccessTimeIconJul 21, 2015 at 4:56 p.m. UTC
Updated Sep 11, 2021 at 11:47 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Banks are not prepared for the wave of disruption from digital companies seeking to capture the financial market, according to new research.

In a survey of senior executives from the UK's retail banking and wealth management sectors, digital innovation agency Adaptive Lab found that legacy technology and rapidly changing consumer behaviour were hampering innovation.

Commenting on the findings, James Hayock, managing director at the firm, noted the disruptive potential of bitcoin's distributed ledger:

"The incumbents will get displaced by new entrants offering a better customer experience and price ... their revenues will diminished in a market of higher switching frequency as they're relegated to undifferentiated utilities, before finally their core competency of storing and transferring value is challenged by the arrival of new technology – the blockchain will disintermediate the banks completely."

Additionally, the research also revealed that banks currently place too much emphasis on compliance – both in terms of focus and resources – with it taking up between 50% and 90% of their IT budgets.

"It's plain to see that a perfect storm of competition, technology, shifts in customer behaviour and regulation looks set to wreak havoc on the businesses we trust with our money. It's a matter of when, not if, banking is reinvented," concluded Hayock.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.