Nearly every bank on the high street is experimenting with blockchain, but only a small handful are talking about it.
Blockchain, the mysterious underlying technology behind bitcoin, is currently being explored and tested by nearly every bank on the high street.
The promise is that this fast and accurate technology (which we demystify in this helpful video) could save you money by reducing the costs in banking.
Just this morning Santander revealed it is piloting a new app that uses blockchain to make international payments that are much quicker than usual.
Typically there’s a one to three-day wait when you’re making sending money abroad, and that’s before you’re hit with currency conversion and transfer fees.
Groups like TransferWise have turned into billion-dollar businesses by offering people a cheaper way to skirt around the traditionally expensive ways of sending money abroad.
With blockchain Santander, led by boss Ana Botin, might have a way to get back in the game by improving the experience for customers.
“The need for finance has evolved from providing a physical Pound in your pocket or card in your purse, where you pay at a till, to being seamlessly integrated into a new, always on, connected lifestyle,” said Santander’s head of innovation Sigga Sigurdardottir.
For now Santander’s app is just being tested by the bank’s staff, who can transfer between £10 and £10,000 to 21 European countries and the US, but the bank hopes it will be able to roll the app out for regular customers.
But Santander isn’t the only bank dipping its toe into blockchain.
Most banks are outspoken in their interest in blockchain, but few have detailed publicly exactly how they’re looking to bring the technology to customers.
The Royal Bank of Scotland (RBS) last year said it is working on a blockchain-powered service “on the fringes of payments” that it hoped to start trialling this year.
Meanwhile, the most public demonstration of the power of blockchain in banking has been with a company called R3.
R3 is working with a group of 43 banks from around the world to see if blockchain could be used in the trading of stocks and shares in financial markets.
Names you’ll recognise like Barclays, HSBC, RBS as well as Credit Suisse, Wells Fargo, Commonwealth Bank of Australia and others are all signed up.
This group of banks are also exploring using blockchain to create “smart contracts”, agreements that are acted upon once the conditions of a deal or trade are met.
While these might not affect you directly, they’ll reduce the costs and complexities of banking, hopefully leading to lower costs for everyone.
And that’s got to be a good thing.
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