As cryptocurrencies gain popularity around the world, the number of banks offering crypto-related services is growing.
Despite the fact that cryptocurrencies have had a rough few weeks, with more than $1 trillion in value being erased from portfolios, an unexpected segment of the market appears to be positive about the future of blockchain-based funds.
The most current batch of American Banker forecasts for 2022 was released, and the findings of a survey of 175 top banking executives from regional and worldwide financial institutions were unexpected. Before we get into the specifics of the study, it’s important to note that American Banker magazine is widely considered as a reliable source of information on banking regulation, technology, and innovation.
According to a recent survey by American Banker, 44% of financial institution executives aim to offer cryptocurrency services to retail clients by the end of the year. Further, 33% of financial managers expect to actively manage their clients’ bitcoin portfolios, up from 13% at present.
In 2022, 60% of wealth management advisors polled expect their customers to grow their crypto holdings or begin investing in the digital assets.
Interestingly, bank executives feel that how consumers move money and the many payment choices available to them will be a key emphasis this year as well, as per the survey. It’s no secret that banks battle fiercely to retain their customers and increase their “wallet share” by offering a variety of services.
Several credit cards also provide crypto incentives in the form of a percentage of the card balance in the user’s selected cryptocurrency. Banks that adopt only a few of these services will stand out from the competition — and the survey findings suggest that banks are looking for ways to gain a competitive advantage.
Only 40% of banks anticipate expanding their investment in standard credit cards with loyalty and rewards features within the next three years when it comes to bank-branded credit cards. According to the researchers, this could be due to additional competitive challenges to credit cards, such as digital payment options like PayPal and Venmo, as well as Federal Reserve activities.
The study showed “FedNow,” the Fed’s real-time payment service that is an alternative to regular bank wires or automated clearing house (ACH) transactions, as well as the possibility of the Fed creating a central bank digital currency. It’s unusual to see the Fed depicted as a direct rival to banks because it is the principal lender to banks and oversees commercial finance operations.
While no one can predict the future of any financial activity, it is worth noting that global banks and lending institutions are seriously contemplating increasing their cryptocurrency and blockchain alternatives this year. Cryptocurrencies would have a bright future if huge financial institutions adopted them.
