The debate around blockchain technology and the future is almost as old as blockchain itself. Since the technology first emerged, the potential it has to go way beyond merely supporting cryptocurrencies, and bring about a fundamental change in the way people transact financially, has been patently clear.

While there are those who argue that there is no real comparison to be made between blockchain and the current fiat-based financial systems, the fact is that the two now coexist across the world of financial services. And while it’s not a competition to see which comes out on top, the transformation of legacy financial systems, processes and infrastructure is inevitable.

The big thing about blockchain, and the reason why it’s undoubtedly going to transform the world of financial services, is that it enables and facilitates trust between the parties involved in any transaction, without the need for third parties to do so. While trust is the glue that holds financial systems together, there is no other technology or process currently active in financial services that gives people the same sense of confidence that a transaction they initiate will definitely be completed, in the way they intend, and within a reasonable timeframe.

Adding to the compelling case for blockchain to eventually become the foundation on which most financial services transactions are built is the immutable nature of the technology. Fraud and cybercrime have become a scourge on the ‘traditional’ banking landscape, and this has eroded the confidence of most of the legitimate participants within that landscape.

The scene is certainly set for a shift in thinking that makes it difficult, if not impossible, to tamper with a financial transaction, or with the historical facts about that transaction. And blockchain is already ushering in that change.

But while there are moves being made in the direction of blockchain in many areas of financial services, notably payments and transfers, the full-scale transformation of the industry, while inevitable, is also likely to be gradual. There are many crypto and blockchain advocates who would argue against that statement. However, the reality is that the world’s financial services industry is simply not at a point where it would survive an overnight transformation to digital assets and blockchain-based processes.

Rather, the transformation is going to need to follow a natural progression, based on steadily increasing levels of redundancy of historical technology and systems, growing disruption of those systems, and, ultimately, their evolution to become more efficient, more transparent, more resilient and more stable.

As is already evident from the segments of society that have been quickest to adopt the new payments and transfer technologies made possible by crypto and blockchain, that transformation process is likely to be a bottom-up one. One need only look at the markets in Africa where crypto has taken off, such as Nigeria and a number of East African countries, to recognise this as truth. It’s the people in these developing economies that are the primary driver of crypto adoption. The phenomenon is entirely understandable. Members of lower LSM groups are losing the most (relative to their incomes) to inefficiencies that are baked into many current banking systems. The wealthy, on the other hand, have the luxury of choice, and that shields them from those same inefficiencies and financial losses. It also gives them little incentive to champion the changes that those established systems need to undergo.

But the change will come. Driven, ironically, by those who have little interest in crypto as a way of creating wealth, and every interest in crypto making the transactions they need to do easier, faster and far more affordable.

Of course demand for change is a catalyst; it cannot bring about that change. That is the role of those who have the capacity to deliver it, which, in the case of the transformation of financial services, are the financial service providers themselves, both new and old.

One of the major problems inherent in this transformation, though, is the resistance to it that is still evident in many spheres of the industry. That resistance typically takes the form of a resolute determination to cling to the fiat realities that have dominated financial services until now, and on which, to be fair, most financial institutions have built their success over the last century.

This resistance is problem, not because it is in any way slowing or preventing the shift to digital currencies and blockchain, but rather because it is preventing those who don’t want to let go of their fiat past from capitalising on the benefits of the new crypto reality; and more importantly, passing those benefits on to their customers. Ironically, this resistance could very well bring about the very thing that most financial institutions fear most, and that is that they end up being little more than custodians of value or, at worst, transaction downpipes.

This doesn’t need to be the case. There is certainly enough space in the world of financial services for crypto and fiat systems to coexist, at least for the foreseeable future. Much as cellphones have still not entirely replaced landline phones, fiat and crypto will continue to exist, probably for a long time to come, on the same financial services spectrum. However, it’s a transition spectrum, which means that the balance will steadily shift. And while the shift will be gradual, it will be relentless.

Which makes it imperative that any financial services organisation that still wants to be relevant, and competitive, in years to come, invests less into resisting it and more on embracing it, adapting to it and, indeed, helping to drive it.