Opportunities in crypto for banks, FIs
As interest and investment in cryptocurrency spikes this year, banks and financial institutions (FIs) must decide whether and how to become involved, or potentially lose revenue and customers if they opt out.
This is the message from Lawrence Pruss, senior vice president at Memphis, Tenn.-based Strategic Resource Management (SRM) in this week's episode of "The Buzz" podcast. SRM is a consulting firm for FIs and others in areas such as digital transformation, operational efficiency and payment technology.
As interest and investment in cryptocurrency spikes this year, banks and financial institutions (FIs) must decide whether and how to become involved, or potentially lose revenue and customers if they opt out.
This is the message from Lawrence Pruss, senior vice president at Memphis, Tenn.-based Strategic Resource Management (SRM) in this week's episode of "The Buzz" podcast. SRM is a consulting firm for FIs and others in areas such as digital transformation, operational efficiency and payment technology.
Banks and FIs can boost their revenue by offering crypto trading and custody services, among other services, Pruss tells Bank Automation News. "The opportunity isn't just defending their deposits, but there's opportunities to drive non-interest income in terms of trading revenue," he says.
There is also potential to attract new customers and increase customer engagement, Pruss notes, as well as help to retain existing clients. "That's an opportunity — when you've got those eyeballs on your mobile banking app — to be able to offer across all other sorts of products and services, maybe even education" on cryptocurrency, he tells BAN, which is still lacking in many cases.
Banks and FIs have been contacting SRM regarding its new service, Cryptocurrency and Blockchain for Financial Services, which advises on the use cases of crypto and blockchain technology and how to set them up, to be sure they're not written out of the script, Pruss says. Decentralized finance, which has sprung out of cryptocurrency and its underpinning blockchain technology, connects lenders and borrowers while facilitating other financial transactions, all without the involvement of a bank.
"We've got some real concern from our clients in terms of being disintermediated," Pruss says. "All of a sudden, you realize it's a very competitive environment."