Banking is Dead… Long live Blockchain Banking! Banks can not afford increasing expenditure of the old technology anymore they will have to adapt to the change

By Giri Devanur

Opinions expressed by Entrepreneur contributors are their own.

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The global finance industry is massive. Global assets under management (AUM) is estimated to be at approximately $85 trillions. This massive industry is under attack from various angles. Yesterday I was at a brick and mortar bank. I like my client services manager (Let's call him Mr. W).

Mr. W is a super cool guy and he is always smiling. But he couldn't get me a simple transfer from one bank in US to another in India. It takes 5 business days!! Yes, FIVE business days. And this service is called an express or urgent service. And I have to go back to the bank again in 4 days!!

I asked him the alternative method. It happened to be the good old Wiring. The cost associated was "$50+". Yes, FIFTY dollars to send $465 dollars.

I was stunned and obviously frustrated. I have been a customer for years and this took me by surprise. At a time when we have the power to transact at lightning speeds, this was definitely disappointing. You can send money to a cell phone or an email!!! But US banks won't allow me to send to another bank. And my dear banker printed me 5 pages of KYC to send $465. God bless the banker.

Then I realized that technology will eat a lot of these businesses.

Speaking of technology and banking, Blockchain, will disrupt the financial domain most certainly. There's already a lot that has been discussed, debated and spoken about this distributed ledger, both online and offline. So this ground-breaking technology doesn't need a special introduction at this point. Calling it "disruptive' is an understatement. To understand what blockchain is capable of, look at bitcoin or cryptocurrency. It has achieved a lot of "never heard of' scenarios in the financial domain. Ever since the technology was introduced in the world of banking, experts have always struggled to create a safe and secure means of transaction. One has to go through a third-party application or an intermediary or a regulatory body to transfer money. But here is a digital currency – completely de-centralized - and has broken all those conventional laws of banking. Today, an individual can send money to anyone in the world almost immediately without having to go through the hassle of what I went through. It is already happening in various parts of the world. You can transfer money via WeChat, Whatsapp, and even Facebook Messenger now.

Believe it or not, blockchain is a ground-breaking technology that can be applied to the you-name-it domain. From agriculture, aviation to supply chain, finance and food industry, blockchain is just about there, everywhere.

In the financial landscape, blockchain offers users the ease of doing the transaction from anywhere. Does it come with a huge cost? No! For a tiny fraction of what I paid at the bank, I could send money to anyone, anywhere in the globe, almost instantaneously. The main concern for banks today is the increasing expenditure as a result of an ever-changing regulatory environment and the rapid technological advancements. Also, let's not forget the extensive and time-consuming process for international money transfers and KYC procedures. Blockchain offers just what banks need today; faster transactions and going easy on the pocket.

Yet another aspect of blockchain that makes it so desirable in finance is its invincibility. Moreover, a de-centralized network means there is no central point to access data from one computer. A hacker that decides to meddle with a single record can't go unexposed because the blocks - protected by cryptography - are interconnected. Which means they have to painstakingly make changes to all the blocks to successfully get away with the little stunt they are trying to pull off. When a record is being manipulated, the digital signature associated with it becomes void and users get an immediate notification, thus protecting the network from further damage.

A lot of organizations around the world are already experimenting with this technology. Major financial organizations such as the SBI Holdings, Goldman Sachs and Citi group have already invested in blockchain. Back home, the State Bank of India (SBI) has grand plans in place to use blockchain for a number of processes, including the KYC system. South Indian Bank seamlessly carried out an international transaction using this technology. ICICI, YES Bank, Bank of Baroda, Axis Bank and Kotak Mahindra are some of the few banks that have hopped on to the blockchain bandwagon. While some banks are experimenting with this digital ledger and achieving impressive results, some financial institutions are gearing up to reform and redefine huge chunks of their banking processes.

Good for them and their customers!

As far as my bank is concerned, I recall reading this article which showed that out of Fortune500 in last 50 years, 84% of them are dead today. In the next 10 years, I am happy to predict just a few banks will remain in Fortune 500. Most financial institutions will have either absorbed blockchain tightly OR they will be gone.

Giri Devanur

Founder & CEO,

He is an E&Y entrepreneur of the year award winner and has successfully completed Nasdaq IPO of AMRH ( He has helped raise multiple rounds of capital, executed M&A.As and created successful companies such as Ameri100. He is also a mentor at the Columbia University.

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