Bank of America admits that cryptocurrencies pose a threat to its business model
According to the Financial Times, Bank of America considers cryptocurrency to be a threat to its business model. This information appeared in the annual report filed with the Commission on Exchanges and Securities (SEC) on February, 22.
“Clients may choose to conduct business with other market participants who engage in business or offer products in areas we deem speculative or risky, such as cryptocurrencies” the report states.
First of all, concerns are prompted by the fact that competition in the fintech market is getting more and more intense. At the same time, development and implementation of fintech innovations, that would allow Bank of America to remain competitive, require substantial expenses, since the bank needs to adapt and modify its existing services and products.
The report also points out that new technologies may inhibit the compliance with anti-money laundering regulations.
On February 26 Goldman Sachs, following Bank of America, also included bitcoin and other cryptocurrencies in the list of the company’s business risks.
Erik Shekhmametev, COO at ZODIAQ, comments on the news:
“Theoretically, the blockchain technology behind any cryptocurrency really poses a serious threat to the business model of traditional financial institutions. The distributed ledger not only involves reducing costs by eliminating intermediaries, which the banks exactly are, but also has given way to a number of fintech start-ups. Such projects, which include, for instance, ZODIAQ, focus on simplicity, convenience and customization — they react better to the consumers’ needs and quickly introduce new technologies.
The hegemony of the largest banks may now be disturbed, and this report is the first acknowledgement that top management of huge companies do not exclude the idea that cryptocurrencies will eventually become a part of our daily life.
We at ZODIAQ, nevertheless, believe that confrontation in the financial market will soon be replaced by cooperation, and banks will regard fintech startups and crypto-technologies not as a threat, but as new opportunities.”