Blockchain technology and cryptocurrencies such as bitcoins may disrupt the banking industry.
Banking employees are not to be envied these days. After being primarily blamed for the monetary crisis that lies behind us, dark clouds are gathering over their heads again. The rise of blockchain technology, that has already enabled bitcoins to become increasingly popular, threatens to put banks on the sideline. Peer-to-peer lending and crowdfunding as well as buying banking products through mobile devices have a similar effect. Dealing with this FinTech revolution calls for new business models and adaptive technologies, ushering the demise of legacy mainframe banking applications.
As bitcoins are based on the peer-to-peer transfer of assets, they suspend banks in their role as intermediaries. Behind the scenes, technologies like sophisticated forms of checks & balances have already been developed and improved to meet the very strict privacy and safety requirements that are needed to run a peer-to-peer system. In China, bitcoins are already a very common way to carry out financial transactions. They are very likely to gain further momentum, knowing that the acceptance of new products and concepts is accelerated once they become significantly better, faster and/or cheaper. Smartphones, tablets and the like serve as recent proof.
The new business models will reflect the transformation of banks from empowerment to dependence, especially since there is a significant disengagement going on among the free-for-all generation. Banks will have to actively approach clients through, for instance, social media and show their relevance to them. Obviously, these developments will have a very negative effect on employment in the banking industry. During 2016/2017 in the BeNeLux alone, an estimated 10,000 jobs will be lost from the financial industry forever.
The FinTech revolution will make legacy mainframe environments obsolete as they are way too inflexible to meet modern requirements. As with most legacy systems, the clock is ticking for the banking industry. At Cornerstone we are experts in application modernization and migration and we can assist banks to disarm this ticking time bomb in time.
Would you like to know how we can help you move your applications from proprietary or legacy platforms to the cloud and enjoy efficient app development benefits? Please don’t hesitate to contact us.