Community banks across the country play a critical role in advancing the American dream, helping everyday Americans purchase assets and pursue financial freedom.
Today, that role includes helping consumers safely purchase and custody bitcoin. An estimated 46 million Americans over the age of 18 have acquired bitcoin since it was first created more than a decade ago, according to research from New York Digital Investment Group (NYDIG). But as ownership rates have risen, banks have struggled to provide bitcoin services to their customers. Concerns about safety, along with regulatory and institutional unfamiliarity, have created a gap now occupied by third-party digital asset exchanges and financial applications.
Fintech competitors are increasingly luring deposits away from traditional banks, with customers moving their money from traditional bank accounts to digital wallets on third-party sites. The experience is cumbersome because users can’t manage and view their holdings alongside other investments and credit accounts, says Patrick Sells, head of bank and fintech solutions at NYDIG. A customer’s primary financial institution can still become be the natural nexus for bitcoin solutions – if bank leaders are willing to take advantage of this opportunity.
Banks interested in adding bitcoin products will have to answer the same crucial questions that arise when evaluating any new offering or technology: How difficult will this be to implement, and how much will it cost? What will the bank need to do from a risk assessment perspective?
Partnering with companies that have the requisite expertise and investments in this space can help banks quickly address those gaps – and potentially generate new sources of revenues.
For a downloadable version of this report, click here.