The 2008 financial crisis was a big lesson for the financial sector and its ripple effects are still with us to date. The current instances of fraud and funding of terrorism activities has left the banking sector thinking especially on the correspondent front. Correspondent banking returns are skydiving and Ripple (XRP) appears to reap immensely.
The banking sector however is turning the existing obstacles into the state of the art opportunities through the blockchain outfit Ripple. The platform transparency makes accountability easy and it is not possible to divert funds to a project they were not intended for.
Turning Obstacles into Opportunities with Ripple
The banking sector interconnectivity has complicated the maters as this appears to have eroded their de-risking plans which have seen the popularity of international remittances plummet drastically. According to a study conducted by Accuity, correspondent banking engagement has dropped by 25% in the last few years.
Banks have been struggling to meet the cross border payment needs as the cost of transactions keep off the bulk of their consumers. This has left a huge subscriber based with no option but to seek alternative ways of sending and receiving currencies.
The exclusion of some populations from mainstream banking is what Ripple (XRP) is capitalizing on. The modern banking consumer appears to be very comfortable with a system that is transparent secure, fast and affordable. It is obvious that banks are struggling with transaction costs and maintaining a secure custody for consumer funds.
Eroded Market Share, the Ripple Opportunity
In any industry reduced user confidence impacts negatively on the market share. The current banking scenario is even worrying. The bank reach to the remote areas is shrinking and that of digital coins and XRP in particular seem to be gaining popularity.
International banking remittances cost has slightly reduced but that does not mean the risks in remote areas have been done away with. Keeping funds in a virtual wallet appears safer that storing in a physical one. However, the consumer cannot abandon banking institutions
The early signs of reduced market share have prompted JP Morgan and Western Union to shift their attention to emerging technologies and Ripple has been their natural choice. This alliance saw the price of XRP surge. This has reduced the cost of money transfer and more system integrations with Ripple (XRP) technology appear to be on the rise.
Streamlining Consumer Barriers through Ripple
JP Morgan, Western Union and MoneyGram teaming up with Ripple are set to break the bottlenecks between the banks and the consumer who relies on the internet to access banking services. The RippleNet , through the xCurrent application banks are getting the relief of making real time money transfers and the system comes with a new end-to-end messaging function for enhanced transparency.
With the upcoming Dubai meet will be a major boost for Ripple as it will seek to explore ways banks can tap into the xCurrent technology to serve their audiences better. If adopted, xCurrent will solve the issues of cist and risks modern banking issues are faced with in money remittances.
Ripple is a safe haven for banks that are tech ready to share data and information in an immutable environment that secure and dependable. Ripple (XRP) could be holding the key to stem out terrorism activities that are funded through the traditional banking systems.