Not Even The Blockchain Can Save Banks From Cutting Staff

Banks all over the world are looking at how they can further reduce costs associated with their day-to-day operations. Any expenses that have to be made on a daily basis are adding to the burden of financial turmoil, and bank shares are not doing that well across the board. The blockchain offers a perfect solution for cost-cutting measures, but only if it is implemented in the correct way.

Also read: Sony Launches Blockchain Innovation Challenge

Banks Cut Costs Wherever They Can

Depending on whom you pose the question to, various bank officials feel they can keep cutting costs in various manners. In this period of financial volatility, banks have to resort to drastic measures if they want to guarantee a return in some way. Not just to their investors, but also to all of their customers.

Revenues are stalling, even for major players such as Goldman Sachs. By taking a closer look at what possibly can be done to cut down costs even further is a very tedious process, but the situation requires banks to do so. Keeping in mind how there are no guarantees of another interest rise by the Federal Reserve later this year, the wait for a stronger – and more stable – economy continues.

Adding fuel to the fire is the recent drop in the value of Deutsche Bank shares, which took a 9.5 percent plunge yesterday. Even though there is no particular reason to worry yet – due to Deutsche Bank holding plenty of reserves – there are rumors about the bank not being able to repay some of their bonds.These so-called AT1 securities will convert into equity during a period of tremendous market volatility.

As mentioned earlier today, these financial woes are affecting various banks throughout Europe and the rest of the world. Things are not looking great in Italy, and 70% of noteworthy banks are operating at a value below their liquidity rate. Needless to say, this trend cannot continue for much longer, before internal restructuring is needed and people will have to be laid off.

Even though the blockchain seems to be a prime candidate for cost=cutting measures, it wouldn’t solve most of the problem right now. Coming up with a new solution for internal purposes will take time, money, and effort, none of which are at the disposal of banks right now. Unfortunately for these financial institutions, they are in a position where even the blockchain will not save them from disaster.

Source: Yahoo Finance

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