Bernstein: Financial service innovation will be transferred to the new financial application field of the Ethereum ecosystem

According to reports, a report from Bernstein on Friday showed that there would be no bank in the future of finance. Banks will still exist, but act as “custodians of old wealth” in the background. Analysts Gautam Chhugani and Manas Agrawal said that “new wealth creation and financial service innovation will be transferred to new financial applications on the Ethereum ecosystem”.

Interpretation of this information:

The recent report from Bernstein highlights the prediction that banks will have a different role in the future of finance. The report suggests that while banks will still exist, they will act as “custodians of old wealth” in the background of financial ecosystems. This means that they will continue to manage and safeguard traditional forms of wealth, but will not be at the forefront of innovation or new wealth creation.

Instead, the report forecasts that innovation and new wealth creation will largely stem from new financial applications on the Ethereum ecosystem. This reflects the growing trend towards decentralized finance (DeFi), where financial transactions and services are conducted on a decentralized blockchain network rather than through traditional banking institutions.

There are several reasons for this shift towards DeFi. Firstly, it allows for more accessibility and democratization of finance, enabling more people to participate in financial markets and services. Secondly, it promotes transparency and efficiency in financial transactions, reducing the need for intermediaries and reducing costs. Finally, it enables greater privacy and security for users, as blockchain technology provides a secure and immutable record of transactions.

However, this shift towards DeFi is not without its challenges. One of the key issues facing the industry is regulation, as many countries are still in the process of determining how to regulate and oversee these decentralized networks. Another challenge is scalability, as the current infrastructure of blockchain networks is still limited in terms of the number of transactions it can handle.

Despite these challenges, the future of finance looks set to be a more decentralized and inclusive one. The report from Bernstein suggests that banks will still have a role to play, but will need to adapt to the new reality of decentralized finance. The key to success in this future landscape will be an ability to embrace innovation and new technologies, and to be willing to pivot towards new business models as the industry evolves.