Do Fintech and Cryptocurrency Initiatives Make Banks Less Special?

Abstract

Banks as a group have traditionally been considered “special” in the sense of meriting the full set of provisions of the financial safety net. The specific motivations for that view have evolved over time, although it owes more to a specific combination of economic functions performed as opposed to any particular function. These functions include offering transaction accounts redeemable in cash on demand, providing liquidity, and serving as conduits for payments and monetary policy transmission. Recent developments suggest however that almost all of the individual economic functions performed by banks can in fact be provided in unbundled form by Fintech initiatives, in some cases more rapidly, at lower fees, and via more streamlined digital interfaces. One important exception remains monetary policy transmission. For the performance of this function, policy makers and central bankers have reserved a privileged role for banks. A radical departure from the current fractional reserve system would be required to unbundle that function and separate money from the banking system, and some private cryptocurrencies have been proposed with the explicit intent to change the nature of money. So far, the present article concludes such initiatives remain marginal, so that banks as a group remain “special”. This observation owes much to the fact that central banks rely on the capacity of the banking system to create money and provide the economy with adequate liquidity and, despite occasional financial crises, have concluded that the efficiency of the current system outweighs the associated costs.

Investigating “organizational maturity” in order to provide “blockchain banking service” based on “FinTech” (through “the CMMI” in “Parsian Bank”)

“…The models as displayed on Figure 1 (FinTech D. B. I., 2016, p. 11) and Figure 5 (Schich, 2019, p. 101) used by “Bitwala” FinTech (currently called “Nuri”) in collaboration with German “Solarisbank” for the provision of blockchain banking were applied in this study. Plus, Figure 2 outlines the essence of blockchain banking.…”

“…Whence, A plethora of banks has reached to the decision that they had better take advantage of such initiatives (APIs) independently, so that they can allow third parties (For instance, FinTechs) to develop and implement applications which run on top of their own infrastructure and connect to their own client base. To exemplify, according to Figure 5, “licensed new digital banks” (to be more precise, neobanks or FinTechs in the field of banking such as “Wirex” and “Tenx”) provide (1) “licensed e-wallet”, along with (2) “cryptocurrency account” as a crypto initiative (Schich, 2019, p. 101).8. Business model taxonomy of “blockchain FinTechs”: “Blockchain FinTechs” are categorized into seven clusters (Beinke et al.…”

Analisis Perbedaan Rasio Profitabilitas Perbankan Sebelum Dan Sesudah Adanya Layanan Keuangan Berbasis Teknologi (Fintech)

“…Navaretti et al, 2017 menyatakan Fintech tidak akan menggantikan bank di sebagian besar fungsi utamanya. Hal ini dikarenakan keberadaan industri perbankan masih diperlukan untuk membantu bank sentral dalam hal penyaluran dan penyediaan dana serta mendukung perekonomian dengan likuiditas yang lebih memadai (Schich, 2019) Beberapa penelitian juga membuktikan bahwa kehadiran Fintech justru membawa dampak positif bagi kinerja keuangan perbankan. Wijayati dan Gustyana, 2021 menemukan terdapat pengaruh positif yang signifikan dari variabel yang diteliti yaitu mobile banking, Non Performing Loans, serta ukuran perusahaan terhadap ROA perbankan syariah.…”

Switzerland and European Union: Specifics of Trade and Investment Relations

“…Examples include differences in regulatory requirements for fintech firms across countries and between banks and fintech firms, in the application of securities laws to some initial coin offerings and in tax treatment. In principle, regulations should be on a "same-activity, same-rules" basis (Schich, 2019). The application of Switzerland's regulations should be transparent to facilitate review.…”