The Benefits of Digital Assets in the Traditional Banking World

It’s indisputable – technology is in fact important – however despite how true the aforementioned statement is, there have been many reasonable reservations on the idea of technology within the financial sector. While technology is instrumental in today’s society, the truth is technology is and always will be risky. Today’s technology has given us direct access and on-demand control of many sectors and channels. However, despite the risk factors of technology, it’s important to review the benefits and the advantages of the tech world, particularly as it relates to money and assets.

Digital Assets in the world of traditional banking services has many advantages if in fact it continues to be embraced by institutions and consumers. The more significant factor behind innovating the financial world, particularly at this time, has a lot to do with the current evolution we are in.

Now more than ever, is the time to invest in digitalization of your company and your services. It’s important to mention that while the rise of Covid-19 enticed the adoption of innovation in the financial world, talks of embracing digital currency and digital assets were happening even before, because truth is with or without the pandemic, the benefits of this transformation is pretty hard to ignore.

These benefits can add an insurmountable amount of value to your financial experience, it can change your outlook on what once would’ve seemed tedious and complicated and out of your control to being simplified and tamed without any outside interference.

Before we jump into the advantages of digital assets (DA), I’d like to clarify that many persons have become more receptive over the last year of digital assets after regulations have become clearer, and the Office of the Comptroller of the Currency (OCC) have put forth three directives that will benefit the adoption of digital assets.

These three directives include: Crypto Custody Services, Stablecoin Reserve Service, and Invision Technologies. In addition to the OCC, Fed Chair Powell has issued a mandate to launch a “digital dollar” and he is seeking to engage the public on the initiative sometime this year. However, these regulations have opened the door to many persons looking into these new transformative initiatives in the banking world, and so why not explore the advantages of it.

Listed below are five significant benefits of Digital Assets in the traditional banking world:

Convenience of Services– Creating the right program for your digital assets can push your clients to have real-time finality of transactions and frictionless cross border availability. Particularly through stablecoins, institutions have potential for instant settlement, retail payments, and cross border transfers. Digitizing your services gives your consumer the ability to transfer, and make purchases on the go.

Revenue Opportunity –As a financial institution your end goal would be highly focused on profit. Of course, you’re going to do things that make the most ‘profitable’ sense. According to an article on www.securities.cib entitled ‘Assets Servicing in The New World of Digital Assets’ it acknowledges that providers who can concurrently support both traditional and digital assets will be at a competitive advantage through offering clients a one-stop-shop solution. This will not only keep costs down, but will also make it simpler for investors whose portfolios are a mix of traditional and digital financial instruments. The popular consultancy firm better known as Deloitte estimated that transaction costs for cross-border payments, for instance, could be cut by 40-80% thanks to blockchain.

Time and Effort Reduction – Cost Reduction benefits the banking institution and the client. With digital systems in place this eliminates the effort of verification on certain assets or funds. Digital assets could even open the door to new services and opportunities to enhance existing services. For example, custodians could play a vital role in facilitating interoperability between different and blockchain platforms. Furthermore, custodians could leverage the Blockchain to support clients with their tax and regulatory requirements; provide registrar services and compile analytical reports.

Transparency– Many of us are aware that person to person services can be subject to human error, however distributed ledger technology secures traceability of all transactions and can easily prove to be a single version of the truth. With digital fiat it is significantly harder to illegally take funds without going through not just one but multiple versions of surveilled systems. CBDCs allows for a easier transfer and tracking system

Accessibility/Consumer Control– Accessibility is important in this day and age. The average consumer is already familiar in operating their daily lives from an ‘on-demand’ expectancy. The idea that we can operate from our phones to make purchasing decisions, business appointments,  etc. with a simple click of a button speaks to how entitled we as consumers have gotten within the last decade, and the truth is we don’t need to apologize for it – it’s the way of the world. However, many traditional banks limit their clients and their accessibility to restricted hours or limited to a controlled centralized entity. However, Digital Assets are under the complete control of their holders -you have full access to your assets and all times with no middle man or outside source involved.