DeFi as an opportunity for traditional banks?
2 min readBank ING is best known for its advertisements featuring the orange lion. Now it’s done ING Group also slowly making a name for itself in the DeFi space. Accordingly, Annerie Vreugdenhil, Chief Innovative Officer of the Dutch bank, announced last year that she was working on a P2P lending project. We asked a company spokesman for the Amsterdam-based company.
Why did you decide to work on a P2P lending project and what does it entail?
ING: “As ING, we constantly evaluate potential opportunities and the role we want to play in the development of finance. We monitor and evaluate various trends to determine the position we want to take in the market, also in the field of digital assets. We use our innovation approach, the PACE method (a structured innovation methodology combining Design Thinking, Lean Start-up and Agile Scrum principles) to assess market trends in the areas we focus on: Safe & Compliant, Disrupt Lending , Financial Health, Housing and Trade. At this point we are just validating some of the movements in this space and forming an informed opinion on this trend enabled by decentralized finance.”
What are the challenges of DeFi for retail and institutional investors?
ING: “Two challenges that we see are consumer protection and social responsibility. We are also looking for ways to contribute to the broader ecosystem with our knowledge and experience. So we conducted research to better understand what DeFi and a financial institution could bring to incumbents.”
Do you think DeFi has the potential to replace traditional finance?
ING: “We expect DeFi to impact traditional finance in a way that challenges the current role of banks in some areas, which in itself could also bring opportunities for traditional finance. DeFi definitely challenges the status quo and the role that banks currently play in some areas. But here, too, there are opportunities for traditional finance.”
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