DAOs can present a number of companies for banks, together with asset administration, compliance and lending.
Banks at present are already utilizing blockchain expertise for issues like fee, clearing and settlement, commerce finance, identification and syndicated loans, in response to The Monetary Instances. Nonetheless, there are nonetheless many unexplored areas in banking the place a DAO-based mannequin is likely to be helpful:
Fundraising
Within the crypto world, preliminary coin choices (ICOs) are breaking down the barrier between entry to capital and conventional companies like capital-raising companies. Likewise, banks can use DAOs to lift capital from a wider pool of traders by way of ICOs.
Loans and Credit score
Utilizing decentralized expertise in banking can remove the necessity for gatekeepers within the lending trade. DAOs present safer methods for individuals to borrow cash, to not point out decrease rates of interest and higher phrases.
Commerce Finance
DAOs may additionally streamline commerce finance by digitizing paper-based processes and automating guide duties. This could make it simpler for banks to maintain observe of their transactions, thereby decreasing the danger of fraud and establishing belief amongst world commerce events.
Securities
A DAO can assist banks difficulty, handle and commerce securities, each digital and conventional. Via tokenization of conventional securities comparable to bonds, shares, and different property and inserting them on blockchains, banks can facilitate the creation of capital markets which might be interoperable, environment friendly and accessible to the higher public.
Buyer KYC and Fraud Prevention
Since DAOs are clear and decentralized, they provide a method for banks to confirm the identification of their prospects whereas stopping fraud. Utilizing sensible contracts, banks can automate buyer onboarding and KYC processes. Blockchain expertise additionally provides monetary establishments an environment friendly and safe platform for sharing info with different companies.
