Bank of America (BoA) has admitted to US regulators it may be “unable” to compete 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 highlights cryptocurrency as an area that may cause it “substantial expenditure” as it tries to remain competitive.
“Our inability to adapt our products and services to evolving industry standards and consumer preferences could harm our business,” BoA states in the filing.
As banks worldwide eye the cryptocurrency phenomenon, 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 approach to legislating the area earlier this month.
While BoA has sought to innovate in the sphere, receiving a patent for its proposed 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 keen awareness of the threat posed to its core business offering by competitors becomes clear.
“…The competitive landscape may be impacted by the growth of non-depository institutions that offer products that were traditionally banking products as well as new innovative products,” BoA forecasts. The report continues:
“This can reduce our net interest margin and revenues from our fee-based products and services. In addition, the widespread adoption of new technologies, including internet services, cryptocurrencies and payment systems, could require substantial expenditures 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 detrimental to its prospects.