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How Blockchain Could Possibly Disrupt Banking?

Created on November 28, 2018

Traditional banking industry is known to reluctancies to adopt fresh and innovative technologies. However, the days are gone when they could have possibly survived by delaying adoption to state-of-the-art technologies.

Today, smart technologies such as Blockchain are transforming everything from how money gets raised in the private market to payment transactions. So, what can be the next piece of this banking puzzle? Will traditional banking industry finally embrace this innovative technology or be replaced by it?

In September 2017, JPMorgan Chase CEO Jamie Dimon took a dig at the concept of Bitcoin by saying that it would not end well and it is worse than tulip bulbs.

Lloyd Blankfein, head of Goldman Sachs, echoed the comments of Dimon by remarking Blockchain is a vehicle for perpetrating fraud and anything that overnight moves 20 percent does not feel like a currency to him.

At the same time, a survey by The International Securities Association revealed that as much as 55 percent of companies polled were researching, monitoring, or developing solutions on top of this new technology we call Blockchain.

What Do Banks Have To Be Afraid Of?

A lot and a lot mean a lot! One of the biggest reasons why banks are reluctant to adopt Blockchain is because it offers a cryptographically safe and secure way to send digital assets without the requirement of reliable third parties like banks.

Moreover, tools like smart contracts have the potential to dramatically automate a big majority of complicated processes and sub-processes within the banking and financial industry, from claims processing to compliance, to the distribution of the contents of a will.

The promise and capabilities of blockchain as a disintermediated and trustless technology can disrupt the global banking industry, including:

Clearance and Settlement Systems: Distributed ledgers and blockchain technology can significantly minimize operational costs and bring us closer to transactions on a real-time basis between financial institutions.

Traditional banks, usually, take three days to settle average bank transfers that is not just a painful logistical nightmare for the banks themselves, but also a pain for the consumer. A simple bank transfer has to bypass a complex and complicated system of intermediaries before it reaches a destination. On the other hand, blockchain facilitates faster payments.


For instance, if I want to send money from a Wells Fargo account in the United States to HDFC Bank in New Delhi, India, the transfer will be executed through the Society for Worldwide Interbank Financial Communication (SWIFT). Since Wells Fargo and HDFC do not have an established financial relationship, both of them will be left with the complicated task if searching for a SWIFT network for a correspondent bank that has an active relationship with both banks and proceed with settlement of the transaction for a fee.

The worst part is that the entire process is extremely complicated to say the least, as evident from the image above.

Payments: Blockchain technology can easily facilitate faster payments at lower fees than traditional banks by completely eliminating the requirement to heavily rely to approve transactions between consumers on intermediaries.

Loans and Credit: Blockchain can make it extremely easy, safe, and secure to provide lower interest rates and borrow money by eliminating the requirement of the “gatekeepers” in the banking, loan, and credit industry.

Securities: Blockchain has the unmatched potential of upending the structure of capital markets by tokenizing traditional securities like bonds, stocks, and alternative assets.

Fundraising: Blockchain is creating and nurturing an innovative cryptoeconomic funding model that unbundles capital access from traditional financial services by offering blockchain companies with immediate and unmatched access to liquidity through initial coin offerings.


Despite the initial reluctancies, banks are now realizing the importance of the blockchain and other innovative technologies to simplify and streamline a part of their processes and sub-processes. However, the reluctance would still stay for a while unless they finally realize in entirety that blockchain is a technology for everyone — even for banks!

Want to know more about how blockchain technology can redefine banking and other services and solutions? Call us at 1 (855) 928-2283 or email us at or simply visit


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