Banking IT blunders are paving the way for a crypto revolution

By Peter Wood, CEO, CoinBurp

Barely a week goes by without another high-profile IT glitch hitting the banking sector. From creaking legacy infrastructure to delays and downtime, the reputation of our once dependable financial institutions is coming under serious strain.

Peter Wood
Peter Wood

The most recent knock to the reputation UK banks came in the form of a Which? report, which found that major banking brands have been hit by no less than five IT meltdowns a week over the last year. This has impacted millions of customers; shutting them out of their internet banking, disrupting online payments and even leaking personal data.

RBS and Santander came out as the worst, according to the Which? report, suffering 18 breakdowns each out of a total of 265. Runners up include high-street staples: Barclays (17), Tesco Bank (16) and First Direct (15). TSB had suffered just two meltdowns in the past year, but the severity of them led to a damning report, critical media attention and ultimately an announcement that the bank is closing one in six of its branches in the UK.

Meanwhile, cash machines are nearly non-existent in some parts of the country – and whichever way you look at it, it’s clear that these traditional financial institutions are crumbling around us.

As a result, consumers are increasingly looking towards alternative means of money management. Fortunately, a legitimate, legal and investable option has arisen in the past decade: cryptocurrency.

Cryptocurrency allows users to invest in a digital asset which allows for financial independence, maximum security protecting one’s assets and full autonomy of personal finances. With this in mind, there is no surprise that the number of blockchain wallet users has increased from less than nine million in 2016, to well over 42 million in 2019. And, its surging popularity is all set to continue.

Admittedly, challenges around cryptocurrency aren’t completely ironed out, and many would not consider it a suitable method for managing one’s entire life savings. At the end of the day, it is a financial investment and key players in the crypto space, namely bitcoin, have grown a reputation for incredibly volatile, unpredictable market movement. In some instances, bitcoin has dropped by hundreds or even thousands of pounds in value within just a few hours, shaking investor confidence.

However, the key fact here is that nobody is suggesting you should put every penny of your hard-earned cash into cryptocurrency. Instead, you should invest however much you feel comfortable with when knowing that you will have full control and autonomy over anything you do convert into digital assets. At the same time, there is no governing body to restrict movement, leak your data or most importantly, lose your money.

This is certainly a tempting offer for those who lost the trust, or even turned their back on traditional banks following the financial crash of 2008. In the time since this banking disaster, the finance industry was supposed to repair their reputation – but, this has not been the case.

It’s abundantly clear that most banks’ no longer have the technology to deal with the modern-day demand of the 21st century consumer. With reference to the Which? report, which isn’t the first of its kind, it’s evident that online servers are often overloaded, security protocols and software is sometimes frail, and glitches are seemingly inherent to a bank’s online infrastructure. It’s uncertain whether this is a case of tight purse strings preventing decision makers from investing in sound IT or technology; or, if there is simply no technology readily available to traditional financial institutions to deal with mass amounts of consumers. Personally, I believe it is the former.

Fortunately, cryptocurrency and blockchain has the technology that eradicates all of these issues. And, whilst cryptocurrency doesn’t currently offer an entirely suitable alternative to the complete safeguarding of one’s personal finances, there is certainly promise for this to be the case in the future.

Being such a new technology, legislation and regulation are still early stages when it comes to cryptocurrency, but, a developed form of stablecoin (a type of cryptocurrency which is locked to one consistent value) could certainly present legitimate banking ‘functions’ for many disillusioned customers in the not too distant future.

For now, it is highly advised to invest at least something into cryptocurrency if possible. This is because another financial crisis threatens to debunk the UK, following the somewhat disjointed and unclear approach to Britain’s departure from the EU.

Although it sounds anti-intuitive to invest in assets which are infamous for extreme declines and inclines in value. Cryptocurrency could offer a suitable and secure investment for those looking to safeguard their money from an impending economic disaster. It is important, however, that newcomers are offered unbiased, professional advice on which cryptocurrency they should invest in, and how much to invest.