The Pace of Banking Industry and Innovation

ABLE Project #4

As is widely known, banks have a business model in which intermediaries take on margins of deposits and loans. Overall, the bank’s margin is more than 80% of total operating profit. This business model is protected by law and for reasons of stability, the banking industry is insensitive to change. It was a long time since the Internet and mobile era that banks introduced online and mobile services.

While the banks stuck to the traditional business model, a new movement has begun. For example, in the near future, some banks are launching a new model with a mobile bank that does not have offline stores. Some others have been expanding its range of financial products since it has become popular through easy wire transfers. In addition, a variety of simple payment services are the most prominent business models in 2017–8. The market has evolved quickly in the time being where there have been no innovative movements.

The history is being repeated while the blockchain technology emerges. After Bitcoin and Ethereum were introduced, there were many decent attempts to adopt blockchain technology into many industries, but banks were not one of them. SNS platforms, games, travel, automobiles, IP, logistics, and many other areas try to combine blockchain, but there are not many attempts to incorporate blockchain technology into the banking industry.

The ABLE Project proposes a P2P financial system that links investors and borrowers directly with blockchain technology and decentralization. The structure eliminates the margins borne by the banks and connects the investors and the borrowers directly to the actual participants. Investment-Loan matching engine allows real borrowers and lenders to trade at the right rate. The interest rate formed as a result is a transparent structure, breaking the stereotype that central bank and commercial banks determine the interest rate in the market.

Bitcoin initiated the revolution by questioning, and solving the central banking system and the intermediary problems with decentralization. A variety of industries are taking decentralization to remove the intermediaries and join the new business model and the flow of change. The banking industry can also evolve into a more transparent and reliable financial system through decentralization, with the ABLE Project at the center.