Royal Bank of Scotland has just announces that it is trialling its own cryptocurrency – which of course, will resonate on the news-lines significantly.
But let’s stop and work out why they are doing this and why they are announcing this?
With around 1000 cryptocurrencies globally and with the market leading cryptocurrency being 100s times bigger than all the others, it seems like a strange thing to do from a marketing, sales, competitive basis. RBS have certainly not said that they intend in any way to ‘corner the market’ or to be a ‘world leader’ in this area – so this is not their motivation. So let’s not get hung up on this, or expect them to start sending you and me application forms any time soon.
Will RBS be creating a gateway for audited and trackable payments to its correspondence banks and across its own network? Maybe. However it is unlikely that it will be replacing its very lucrative payments transmission businesses, but there is an option for it to reduce the costs and increase the audibility of its own internal ‘group’ payments – as it has stated that the trial that it has been progressing with have involved its different banks within the group.
So if it is not going to sell me and you (as customers) a new payments service at lower costs, and it is not going to compete in the alternative currency markets, then we have to read this move by the RBS as follows:
We are a big bank and government run; but we want to demonstrate that we are forward-thinking and are reviewing seriously ALL the new and latest ideas and technologies.
Blockchain and Crypto-currency media gets a good reading and positive reactions from the public so we need to be announcing this to the world.
It is really just work that we are doing in our own laboratories within the RBS group. We are testing these things so that we understand all about them and can then work out where we can use them and where we can adopt them.
So, if this is the case, we can simply read this with interest and forget it; until RBS then follow this with a notification of how they are going to use it in the ‘real world’ – and then we can start to think harder.
In the meantime, it is worth noting that there are so many things that can be done with the Blockchain technology and so many great new business start-ups that are using the technology to evolve real-world business solutions that the banks that will survive in the next 10 years will be those that embrace the new, take the best of what is on-offer and move forward as if they are small agile businesses rather than the big banks that they are.
RBS are seemingly doing the right things in the market (or starting to do so), but this is nothing that we need to get excited about or worry about as consumers. Not just yet.
But this should worry all the banks that are not doing these things.
For further information, please contact Bill Trueman or Kevin Smith (eminent risk and fraud specialists) both are member of AIRFA.