Millennials - Trust - Finance - Blockchain - Maarten Leyts
Blockchain is claimed to be the transparent system that will gain back Millennials’ trust in finance. Blockchain is the means to an end, gaining trust has everything to do with giving back control to the consumer. Do banks dare?
Blockchain is most known as the technology underlying Bitcoin. What makes it special is that it uses a public and fully distributed network of nodes and users to move any digitalized asset from peer to peer, that anyone can access the ledger and see the transactions which are validated without any intermediary. The transparency of the process even extends to the name itself: transactions are recorded in blocks which are cryptographically secured and sequentially chained together from the oldest to the newest, offering a non-refutable and unbreakable record of data.
Big banks are now seeing its massive potential to make the existing financial system more efficient, and find cost savings in a landscape that is coming under increasing cost and compliance pressures. NASDAQ, the second largest stock exchange in the US, are currently trailing blockchain technology for the process of clearing and settlement. And consortiums like R3 or the Hyperledger Project are rapidly establishing a global presence to be reckoned with.
The technology has a lot of potential outside of finance too. It could well prove to be the missing link in creating viable sharing economies, lessening transaction chains and allowing providers to sit closer to their end users and consumers.
And, most importantly, it could allow people to reclaim their online identity, begin to own it, monetize it and protect its privacy.
Now we’re talking. Gaining Millennials’ loyalty and trust is becoming increasingly difficult for banks. This generation has grown up with Occupy Wall Street and the Indignados. One third of Millennials believe they won’t need a bank in five years, and one in five think banks will no longer be people’s primary financial institutions.
Blockchain technology could be a viable solution for a new kind of engagement which would put transparency and trust at the centre of the business stage in the aftermath of the global financial crisis, whose effects already produced a first real change of habits among millennials fuelling their eagerness for impactful and good companies, to which to be loyal.
It’s naïve to think we’ll move to a world where transactions are completely transparent, but selective transparency is a realistic pursuit.
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