The financial industry is often at odds with cryptocurrencies. It’s a situation reminiscent of the digital music revolution, where the music industry was forced to drastically improve their distribution model in order to stay relevant. Today, it’s the digital currency revolution that’s pressuring the financial industry to reevaluate its business models, especially with respect to business-to-consumer services.
Many speculate that the business of cross-border transactions could be disrupted by the emergence of cryptocurrencies. The bulk of these cross border transactions come from the global migrant worker community, a demographic that’s often been marginalized in the past. Traditionally, sending money back home across a border has been an expensive and inconvenient process – it seems like a perfect fit for cryptocurrencies. The financial industry has taken notice of this and has responded with new products and services.
SWIFT (the Society for Worldwide Interbank Financial Telecommunication) is one of the companies that’s taken notice. SWIFT provides networking services that enable financial institutions around the world to efficiently transmit funds to each other. In 2017, SWIFT launched a new system galled GPI which they now claim is handling 25% of all cross-border payments and over 100 billion dollars per day in transactions. The GPI system allows banks to offer their customers better options for cross-border transactions, with features like payment tracking, transparent fees and transactions times measured in seconds.
Competition is usually a good thing for the consumer, and the competition between crypto and traditional financial services is no exception. It’s not only the financial sector that innovates in response to pressure, but the cryptocurrency community as well. Every year we see new cryptocurrencies and blockchain projects being launched which meet the changing needs of a changing user base.