An 18-page report by KPMG’s UK banking division explores how the retail banking world is ripe for gradual disruption and how some emerging systems can make this happen.
The review is well-summarized in a section discussing “the three pronged attack on retail banking.” The three major services provided by banks–deposits, payments and lending–are each being challenged by new approaches.
Cryptocurrencies like Bitcoin are categorized as challenging the payments world. PayPal is considered to be a challenger for payments and deposits, while peer-to-peer schemes and “digital banks” are making inroads into the lending space.
In a section devoted to digital currencies, Bitcoin is explored in addition to other forms of digital cash. These take the form of digital wallet apps such as Square and Apple Pay; the latter’s rival CurrentC; Snapchat’s “snapcash”; and local “complementary currencies” such as the Bristol pound.
Bitcoin is illustrated as removing three parties from what is typically a five-party payment process, saving up to 2% of transactions. Though it is in its early days and its future uncertain, the technology holds promise regardless of the outcome:
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“Bitcoin is the internet of money. It would be wrong to write it off just yet. It’s just in its infancy and will grow. With its open architecture it could develop into something very interesting.”
One of the featured Bitcoin-related products is the Nymi, a wristband whose bitcoin wallet is secured by the user’s heartbeat.
In the report’s conclusion, it is argued that the successful technologies of the future may be those that bring their own original concepts to the table:
“It is easier to launch a new kind of current account to match a close rival’s new offering than to work out the opportunities that a digital currency such as Bitcoin presents or to see the value in social media or biometric authentication.”
“With intelligent leadership,” it is not beyond the banks to develop or adopt new approaches.