February 16, 2016 By FTI Consulting
Retail banking saw stiff competition from challengers and alternative lenders in 2015, as mobile and cashless payments businesses surged into mainstream markets – and the disruption as continued into the New Year. January has seen Blockchain as the new investment of choice, with JPMorgan, Santander, Citi and Accenture all looking to get in early.
This month’s star was Blockchain technology company Digital Assets Holdings, founded by former JPMorgan exec Blythe Masters. The startup recently completed a fundraise of $50 million from a host of blue chip Wall Street and City names. January also saw the creation of dedicated Blockchain funds, driving further capital into the sector – most notably Blockchain Capital which in January closed a $13 million fundraise.
The numerous advantages digital currency has to offer suggest there is great potential for continued capital investment. Considerably higher volumes of payments, faster transactions, reduced capital requirements and a move from sluggish backend processes together present a compelling investment case for Blockchain. As such, financial organisations looking to leverage technology and expertise will continue to commit spend to innovate and develop their own proposition.
It is likely, therefore, investor interest will continue to grow, as will the businesses in the space taking up column inches. What is less clear is the stance regulators will take as the space matures during the course of the year. A sector already beset by tax and data protection issues, will now have to answer questions on anti money laundering and payments security. It’ll be up to the banks, industry, regulators and government alike to work together to ensure growth in the space is sustainable and maintains the interests of consumers.
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