Bank of America (BoA) has submitted to US regulators it may be “unable” to contest with the growing use of cryptocurrency.
In its annual report to the Securities and Exchange Commission (SEC) this week, filed Feb. 22, the major US bank for the first time underscores cryptocurrency as an area that may cause it “extensive expenses” as it tries to remain competitive.
“Our incapacity to familiarize our products and services to evolving industry standards and consumer predilections could harm our business,” BoA states in the filing.
As banks worldwide eye the cryptocurrency singularity, direct interaction remains low. The lack of uptake formed a central reason why the European Central Bank confirmed it had opted for a hands-off tactic to legislating the area earlier this month.
While BoA has sought to innovate in the sphere, receiving a patent for its wished-for cryptocurrency exchange system in December 2017, it has come in for criticism more recently after blocking its clients from credit card purchases of cryptocurrency.
As the report to the SEC continues, the institution’s acute awareness of the threat posed to its core business offering by competitors becomes clear.
“…The competitive scenery may be wedged by the growth of non-depository institutions that offer products that were traditionally banking products as well as new innovative products,” BoA estimates. The report continues:
“This can diminish our net interest margin and revenues from our fee-based products and services. In addition, the extensive embracing of new technologies, including internet services, cryptocurrencies and payment systems, could require considerable expenses to modify or adapt our existing products and services.”
The bank also pointed to staff retention failures and “increasing competition” in the financial services industry as being disadvantageous to its projections.