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How Blockchain affects Business Models in International Banking

Degener, S.M. (2018) How Blockchain affects Business Models in International Banking.

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Abstract:The blockchain technology is transforming industry standards in many fields. Business model innovation becomes a crucial task for settled industry players in the industries affected. Among others, the international payments market recognizes the potential application opportunities of blockchain. What business model implications do players like traditional banks face when adopting blockchain technology for cross-border payment processing? Scholarly work is yet to be conducted on a larger scale to figure out those implications in specific settings of application. This paper compares the Rabobank and fintech start-up Ripple in order to filter out implications to the business model of traditional banks integrating blockchain technology to process international payments. Ripple represents a value proposition offering a ‘blockchain-as-a-service’ solution, RippleNet, to which traditional banks can simply plug in. Therefore, channeling Ripple’s value proposition almost straight to traditional banks to offer faster, less costly, and more reliable cross-border payments using blockchain technology. Further, major implication to the business model of traditional banks are identified in the Key Activities which become fully automated through blockchain based processing. A case study by Chesbrough & Rosenbloom (2002) suggests startups to be more likely to successfully identify and apply alternative business models which capture the value of disruptive technologies in a more sophisticated way. This is assumed to match the causal context of both cases presented. Furthermore, experts interviewed agree on a timescale of at least five years until blockchain based payment systems are realized.
Item Type:Essay (Bachelor)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:International Business Administration BSc (50952)
Link to this item:http://purl.utwente.nl/essays/75300
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