A survey by German financial industry consulting firm Confinpro AG has revealed that 68% of finance experts believe that blockchain technology will have “negative or very negative consequences” for traditional banks. The firm’s leading consultant adds that now is the “time to act, rather than waiting for the technology to threaten major aspects of current business models.”
‘Electrifying’ the German Finance Sector
The survey, a joint venture between financial publications Cofinpro and IT Finanzmagazin, also showed 74% and 67% of respondents think the blockchain holds the “greatest potential” for instant remittances and cryptocurrencies.
In a refreshingly positive change of tone for Germany regarding cryptocurrency, a group of 86 respondents from across the local finance scene made broadly positive comments about the potential for the blockchain to disrupt existing financial structures and place more power in the hands of consumers.
Introducing the findings, Cofinpro executive consultant Dirk Ungemach-Strähle said blockchain tech is “electrifying the [German] finance sector” and could “unleash enormous upheaval” and that the experts even considered it a “revolution” for the industry. He adds:
“The 86 respondents of our survey agree on one thing: the blockchain has enormous potential.”
The figures make an encouraging basis for optimism: 87% agree that “many new business models” will be created, 62% that existing models will become “superfluous” as a direct result of blockchain tech usage.
Regulatory Hurdles Remain
The mood is tempered with the proviso, similarly widely agreed, that the entire fledgling ecosystem is nonetheless in its infancy (73%), and that legislation and regulatory hurdles form the main bridge to gap before major advancements become daily practice.
Ungemach-Strähle echoed that “despite its enormous potential, the majority of respondents are equally clear about the fact that the technology is still taking its first steps and has yet to fulfill many requisite obligations.”
Germany has hitherto been a challenging arena for cryptocurrency-related business to get a foothold. Popular exchange Localbitcoins was forced temporarily to cease serving Germany following regulatory uncertainty, while major bank Sparkasse even blocked transactions of exchange Anycoin Direct from customer bank accounts.
— evok3d (@ev0k3d) January 9, 2015
It is thus little surprise that regulatory uncertainty features most highly in respondents’ reservations about the future of the blockchain’s application. “Lacking standards” and “market fragmentation” were given as the major hurdles for the technology to overcome (68%), with a “lack of judicial regulation” in second place (66%).
In summing up, however, Ungemach-Strähle remained resoundingly upbeat. “One thing is clear nonetheless: there are few technological developments with this kind of potential for the finance sector,” he writes, adding:
Now is therefore time to act, rather than waiting for the technology to threaten major aspects of current business models or for the competition to catch up.
Do you agree that blockchain technology is a major threat to banks? Let us know in the comments below!
Images courtesy of cofinpro.de, varsityfaithresources.com