In recent times, there have been increasing awareness of the importance of digitalization and the trends it’s creating in the financial services ecosystem. The last few years have seen banking as we know it undergo a metamorphosis, and NFTs are going to be the catalyst that pushes it even further. If you’re a regular reader of this blog, you’ll know that NFTs have been a dominant theme here for a while. This is because they’re going to transform the financial services sector on a grand scale, and as a result, we’re going to see an unprecedented level of disruption in the industry.
NFTs are being referred to as the future of banking, and they’re going to have a profound impact on how the financial services sector operates in the future. Let’s take a look at how NFTs are going to transform banking and how the digital revolution will make it possible.
What Are NFTs?
In the cryptocurrency world, a “token” is a unit of value that’s used within a particular network. A token can represent anything, such as equity in a company, access to a service, or a right to ownership of an asset.
Unlike fiat currencies, which are issued by a central authority, such as a government or bank, NFTs are decentralised. They’re created and controlled by the users of the network, who can make their own rules regarding the use and transfer of their assets.
NFTs can be created in a “trustless” manner, which means there’s no need for a third party to oversee the process. This means that they eliminate the risk of human errors and inefficiencies, which allow the parties to transact directly without the need for additional intermediaries.
How NFTs Will Change Banking
The concept of a decentralised system for the issuance and transfer of assets is already changing the traditional way banks operate. We’ve already seen blockchain technology enable established financial institutions to launch DLT-based products and services, such as IBM’s Coin.)
With the rise of NFTs, we’re going to see an expansion of this to a much wider scope. The rise of cryptocurrencies has led to a widespread adoption of the NFT model, and it’s only a matter of time before we see this expand to other asset classes.
We’ll start to see NFTs like securities, commodities, real estate, and other assets become mainstream. As a result, we’ll see more efficient ways of managing and trading these assets, which will lead to increased financial inclusion.
What’s the Future of Banking?
As we’ve seen above, the future of banking is going to be driven by NFTs. As we mentioned above, the concept of a decentralised system for the issuance and transfer of assets is already changing the traditional way banks operate.
We’re going to see the expansion of this to a much wider scope, with NFTs like securities, commodities, real estate, and other assets becoming mainstream. As a result, we’ll see more efficient ways of managing and trading these assets, which will lead to increased financial inclusion.
How Will NFTs Change Finance?
Considering the trends we’ve discussed above, it’s not a surprise that NFTs are going to have a profound impact on the way we think about and use finance.
The data we have for the global financial services industry is impressive. There’s around $60 trillion tied up in financial assets, and the global financial services sector generates around $165 trillion in revenue.
As the demand for financial services continues to rise, the industry is going to have to navigate new regulations and new models of digitalisation. The rise of NFTs and their promise of decentralisation will give us an opportunity to rethink how we do business.
Disruption in Finance
The digital revolution is disrupting every industry. In finance it means that we’re going to see a substantial disruption in traditional asset management, especially in the areas of securities, commodities and real estate.
The rise of the internet meant that access and distribution were quickly brought to market. This is no longer the case. Financial services are no longer limited to a few countries. The rise of NFTs has opened the gates to a new era of decentralised finance, where users have the ability to issue and trade assets in a trustless manner.
NFTs are going to change the face of banking, and as a result, we’re going to see an unprecedented level of disruption in the financial services sector. The traditional model of banking has become outdated, and it’s time for a change. The rise of NFTs is going to give us an opportunity to rethink how we do business.
This is going to create a much more efficient ecosystem that’s capable of meeting the growing demand for financial services with greater ease. From securities to real estate to commodities, the future of banking is going to be defined by NFTs.