Deutsche Bank: Digital Currencies And Blockchain Technology Make Payments Increasingly Cashless And Invisible
Several banks, tech companies, startups, fund houses and others are joining forces to explore the potential of blockchain technology.
Deutsche Bank, a German global banking and financial services company, has published a white paper that focuses on how fintech firms and digital ecosystems can leverage banks’ core competencies through equal partnerships, to innovate and grow in the B2B space, Finextra reported.
The paper, entitled “FinTech 2.0: Creating new opportunities through strategic alliance”, says that the growth of e-commerce coupled with the proliferation of smart devices have paved the way for digitalisation across multiple industries – first in the B2C, and now the B2B space.
This trend towards digitalisation and technological innovation has been transforming many areas of financial services, particularly payments with innovators such as Paypal, M-Pesa, Alipay, Stripe, Payoneer, Samsung Pay and Bitcoin revolutionising the conventional way of making and receiving (instant) payments for products and services.
The report pointed to the adoption of “novel” concepts in payments space – from streamlining payments or integrating billing, to mobile payments, security developments, or cryptocurrencies and peer-to-peer transfers – which continue to make payments increasingly cashless and invisible, while enabling data-driven engagement platforms for customers.
Elaborating further on cryptocurrencies and their underlying blockchain technology, the paper said that the technology needs to evolve beyond money transfers to be able to transform the global financial system.
“Recent years have seen the emergence of new payment rails, such as digital currencies and blockchain technology, as well as movement from central banks to update legacy payment systems to real-time ones. Both approaches will be needed to extend beyond simple money transfers to modernise the entire financial system infrastructure”, the paper added.
It further notes that ‘Fintech innovation’ is a constant force and will continue to change the way we interact and conduct business. It expects the payments space to undergo significant shifts in this new era of digitalisation, including alterations to business models, customer behaviours and traditional trade and treasury functions.
“Disruption in payments will continue, with ongoing innovation shaping customer behaviours, business models and the structure of the industry”, it said. “The time has come for one further change; a shift in mindset from one of competition to collaboration. By exploring strategic partnerships, traditional banking providers and new innovators can together create long-term success and revolutionise the payments market and wider financial sector for the benefit of all.”