It seems like every day we read of bankers deriding cryptocurrencies. They see blockchain as a possible help but admit they need to know more. (Don’t we all?)
No smart banker today denies that major changes are underway in banking and the financial sector. Banks will have to change.
What is happening today reminds me of calls I would get to speak to office equipment sellers in the late ’80s. They sold manual and electric typewriters (remember those?) and other office equipment.
They laughed at me when I would tell them that these new-fangled microcomputers equipped with word processing software like WordStar, WordPerfect and Microsoft Word would eventually take away the need for a typewriter. Later, laughter turned to anger, and they said I should not talk about word processing software but, rather, I should just tell the dealers how to sell more typewriters.
They didn’t recognize the changes in technology.
I saw the same thing when I would write my column for The Business Journals years ago about video rental stores like Blockbuster and the threats they were facing with video downloading. I predicted the demise of the VHS tape and later the DVD. I remember email messages I would get from people in the video rental business. They derided my “negativity.” They told me I needed to instruct them how to get people back into the video rental stores, checking out videos and to stay away from downloads.
They didn’t recognize the changes in technology.
We could cite many other examples of businesses seeing a change coming and, rather than adapt and change their business models, they chose to complain, fight and cry (sometimes literally).
They could have recognized the changes in technology.
Embracing the change
This is where the banking industry is today. The coming storm that is beginning to engulf the financial sector can’t be stopped. Regulation won’t stop it, as it is international.
What’s the solution? As with all changes throughout history, banks and other financial institutions have to 1) get up to speed with knowledge on what is happening, 2) assess where they have strengths, weaknesses, threats and opportunities (the old WOTS analysis), 3) change their business models to be ready for a new financial world.
Are banks really in trouble from blockchain and cryptocurrencies?
