The Royal Bank of Canada (RBC) has analyzed the role of major European banks in the context of growing crypto payments. These institutes are therefore the focus.
• Companies are increasingly using cryptocurrencies for payment transactions and cash management
• HSBC and Deutsche Bank are particularly exposed
• Investors should pay attention to potential disruption
The major British bank HSBC and Deutsche Bank are among the institutions that could be most affected by possible changes in corporate banking. This is the conclusion of a current analysis by RBC Capital Markets, reported by Reuters.
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High dependency on corporate cash management
The focus of the RBC investigation is business with corporate customers and their liquidity management. Banks with a large share of corporate cash management – including HSBC and Deutsche Bank – could be among the most impacted if companies start using cryptocurrencies for cash management.
According to the RBC analyst, corporate payment activities at these institutions account for a significant share of overall business. Specifically, according to RBC, this share is 10 percent or more of their group sales. This strong position in payment transactions increases the sensitivity to technological changes.
Margin pressure and possible customer losses
The analysts see concrete risks for traditional banking models. Institutions that do not deal sufficiently with digital assets risk having their margins come under pressure and losing customers. The background is the possibility that companies could increasingly rely on blockchain-based payment infrastructures or stablecoins in the future. At the same time, according to Reuters, RBC emphasizes that the growth of digital assets also offers lenders new revenue opportunities.
Corporate payments as a central use case
The analysts attach particular importance to corporate payments. In a survey of 18 European banks, 72 percent of respondents cited cross-border payments as the top near-term use case for digital assets.
In addition, corporate payments is described as the application area that is closest to the market. This suggests that changes in this segment could become reality relatively quickly.
Limited current importance of stablecoins
Despite the identified risks, the actual use of digital assets in the banking sector remains manageable so far. According to the RBC survey, 83 percent of institutions do not currently see digital assets as a core offering or replacement for existing services.
The demand for stablecoins is also currently assessed as limited: 67 percent of the banks surveyed report low demand. Accordingly, all institutions rate the current influence of stablecoins on liquidity and treasury management as negligible.
Potential revenue risks – and strategic responses
Depending on the development of digital forms of payment, the impact could still be significant. According to RBC, particularly exposed banks could lose up to 7 percent of their income. The reasons cited include rising refinancing costs and falling fee income.
At the same time, many institutes are already working on their own solutions. According to Reuters, banks such as Deutsche Bank, Barclays and BNP Paribas are participating in initiatives to develop bank-backed stablecoins.
Classification for investors
RBC’s analysis shows an area of tension: While the actual use of crypto and stablecoin solutions in corporate banking has so far been low, structural changes in payment transactions could have a significant impact on established banks.
Investors in bank stocks should therefore keep a close eye on further developments, as institutions with a high proportion of traditional payment transactions without their own crypto strategy could come under long-term pressure. But it also remains exciting for crypto investors, because the focus may be shifting away from memecoins and towards infrastructure tokens and protocols that enable cross-border liquidity and compliance.
Thomas Zoller, editorial team at finanzen.net
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