Banks and Regulators need to look at their track record before attacking Facebook!

Do Central banks and governments think Facebook (and other creators of Digital Assets) are stupid or that they do not have the ability to remember, let alone search Google to remind themselves and others of the continued failure of existing banks? It really is not that hard for one to spend two minutes on the internet and find example after example of fines sanctions, staff sackings and judicial criticism being levied against the so-called reputable, safe, well-regulated and trustworthy banks. The two main reasons for having financial regulation is:

1.    To maintain confidence in the financial system
2.    To treat customers fairly

Having confidence in a financial system requires trust that the companies’ who operate within the financial markets abide by the rules and regulations and that they treat customers fairly.

So it is rather disingenuous to see a senior figure like Bank of France Governor Francois Villeroy de Galhau talking about the importance of KYC and AML procedures being in place for Facebook and other providers of Digital Assets. French banks have been fined over $113.7 million by the French regulator, Autorité de Contrôle Prudentiel et de Résolution(ACPR), in the last ten years. Lets’ not forget the judge’s verdict who chastised senior BNP Bank officials for “inappropriate behaviour”, when BNP were fined over $9 billion. So French banks hardly have a clean track record!

To be fair, it is not just French banks that are getting into trouble, since the financial crisis in 2008, globally banks have been fined a massive $231 BILLION up to 2017!

Clearly, KYC and AML is very important to ensure that people carrying out nefarious activities are to be discouraged and ideally caught. It is plain to see the current largely analogue paper-based systems that many of the financial institutions use today, were not designed for our global increasingly digital economies. However, using new digital technologies such as Blockchain hopefully will enable governments and regulators to protect their citizens and maintain confidence in the ethics and financial probity of our modern financial markets!

Blockchain technology offers great opportunities to help make business more efficient, more transparent, more collaborative and encourage more engagement with staff, shareholders, suppliers and customers.
None of us like change so the challenge for companies is to embrace and adapt as economies become ever more digital. While Blockchain technology and the Digital Assets that they can create are NOT the answer to everything they can help address some organisation’s challenges.

It may be helpful to remember – KISS, Keep It Simple Stupid. It may be helpful to remember how Julian Gray at BP describes Blockchain – in just five words:

Trusted Transitions Over The Internet

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