In today’s world, digital assets are becoming increasingly popular, with more individuals looking for ways to invest in cryptocurrencies, stablecoins, and other digital assets. Banks, as a result, have an opportunity to provide their customers with access to this emerging asset class.
Here are five reasons why banks should offer digital assets:
- Meet the changing demands of customers
As technology advances, customers are becoming more digitally savvy and looking for ways to diversify their investments. One of the reasons for increased interest in Web3 is the current economic instability that turns people away from traditional markets. Crypto gives users some opportunities to hedge against growing inflation rates and the chance to potentially see bigger returns. Banks that offer the new asset class can meet the changing demands of their customers, thus attracting new users and retaining existing ones.
- Increase revenue
Offering crypto can provide banks with access to a new market and expand their customer base. Therefore, they get a new source of income through fees charged for services such as custody, trading, and the management of digital assets.
Let’s review a successful case of a bank that started offering crypto and saw an increase in revenue. In December 2020, DBS Bank, the largest bank in Singapore, launched a cryptocurrency trading platform called DBS Digital Exchange, a fully-fledged exchange for digital assets, including tokenization, cryptocurrency exchange, and custody services. Later on, during a result briefing, DBS reported that it had generated a record net profit of S$3.71 billion (US$2.75 billion) in the first half of 2021, up by 54% from a year ago, boosted by strong growth in fee income. DBS’s second-quarter net profit was S$1.70 billion (US$1.26), a 37% increase from the previous year. First-quarter and second-quarter net profits were the two highest on record.
- Diversify the product range
By offering crypto, banks can diversify their product range and stand out against the competition. But why is product diversification important? The major reason is that it helps to adapt to changes in customers’ behavior. Another reason is to attract new audiences such as crypto-curious users, which consist of 300+ million people. Also, diversification helps avoid overspecialization and aids in modernizing banks, potentially becoming a one-stop-shop for fintech products that benefit from increased popularity.
- Stay competitive
In an increasingly competitive financial landscape, banks that offer digital assets will be better positioned to compete with fintech companies and other digital-first players. This can help banks maintain their relevance and market share. Big players such as Revolut, Citi Bank, Bank of America, Silvergate Capital, and others have already turned to crypto. Other financial institutions, including smaller banks, have a chance to follow suit in order to gain a competitive edge over other players.
- Become a one-stop-shop for all financial services
The most in-demand feature of current bank or neobank users is exposure to crypto trading, as 85% of crypto owners are interested in buying crypto from their own trusted financial institution rather than having to go to another exchange or wallet. On the other hand, it is to the benefit of institutions themselves, as they get a chance to retain their users and prolong their life cycle.
How does Scalable help banks expand to digital assets?
Scalable Solutions offers various white-label products that cater to the needs financial institutions face. They include Pro Exchange Solution, Lite Instant Exchange, Crypto-as-a-service, and custom digital asset solutions.
Pro Exchange Solution
Pro Exchange is a perfect product for businesses that want to target advanced and institutional traders that are looking for the ultimate trading experience. It offers advanced features such as Margin trading, Perpetual Futures trading with up to x100 leverage, copy trading, advanced OCO and OTOCO order types, and many more features to cater to all the needs of a professional trader.
Lite Instant Exchange
Lite Instant Exchange is our new product – a simplified version of Scalable’s PRO Exchange Solution. It combines basic trading tools with a high-standard and intuitive interface to offer an effortless experience to crypto newcomers. Its functionality includes instant swaps across 650+ assets, fiat on/off-ramps, internal transfers, withdrawals, deposits, and staking.
Read our article Introducing Lite Instant Exchange: The Gateway to 300+ Million Crypto Users and the article Scalable Lite Instant Exchange VS Pro Exchange: Which One Suits You Best? to learn more about our main products.
Crypto-as-a-service
We offer Scalable’s robust APIs as building blocks to integrate digital assets operations into your venue. They include digital assets trading, fiat on/off-ramps, mass payouts, custodial operations, and much more.
Custom Product
We aim for a deeply personalized approach to satisfy all of our clients’ needs. That’s why we also offer a customizable solution that will include the exact functionality and meet the requirements that your business needs.
Functionality needs may vary, but what stays the same is our matchless operating conditions, such as all-inclusive liquidity across over 1500 markets, battle-tested security, compliance with regulatory requirements, and support for easy fiat withdrawals and deposits.
Conclusion
Banks can offer digital assets and take advantage of the benefits that come with them. By providing customers with access to this emerging asset class, banks can stay competitive, diversify their product offerings, and increase their revenue.
Scalable can guide you to the world of crypto without you being involved in complicated tech operations. Just focus on your business development and we will take care of the rest. To learn more about our products and terms, get in touch with our team.
