The financial industry has been through a lot of challenges, and these challenges are a contributory factor to the increase in the number of people who are either underbanked or unbanked. The underbanked do not have access to credit cards, loans, and other benefits attached to using mainstream financial services.
The unbanked could be likened to people with trust issues. While some of them may have technical reasons for being unbanked, a lot of them have no other reason than the fact that they do not trust the banking system, and you cannot blame them for reasoning that way, because over time, the traditional banking system have prove them right in more ways than one.
There are a lot of irregularities within the traditional banking system, and these irregularities have discouraged a lot of people, hence, they are losing faith in the banks, and looking elsewhere for help. Here are some common problems facing the traditional banking system:
- Only certain classes of people have access to mainstream financial services.
- Restricted access to loans.
- Cross-border transactions take ages to clear.
- Exorbitant fees on transactions.
- Too many third parties involved in a transaction, because they need to append signatures or confirm processes.
- Too much paperwork which is another factor that causes delay.
- The bank has more control over your money and valuables, than you the owner, hence, any irrational decision the bank takes could affect you.
- Susceptibility to hacks, manipulation, and alteration of records.
Since inception, the traditional banking system was designed to run in a centralized way, and it has been that way till this moment. A lot of the problems going on within the banking sector is as a result of the centralized system, but it does not have to be that way, especially when there is a solution.
So the system has been trying centralized solutions for ages, to no avail, it is time to give decentralization a chance. The underlying technology of crypto-currency, which is Blockchain, comes with a decentralization feature, and what that does is take the power away from the central authority, and hand it over to everyone within that network.
Interestingly, the decentralized digital ledger technology called blockchain is immutable, and that means no one can alter, manipulate or hack records already sent in, plus it uses high level cryptography for its security.
Barteos is a blockchain based initiative that intends to make decentralized digital a norm that would drive the mainstream adoption of crypto-currencies by everyone. With the backing of Bartercard that has more than 28 years experience with digital currency, and merchants numbering their tens of thousands, Barteos has everything it needs to make decentralization a global phenomenon both in the financial industry, and other industries.
With a decentralized banking system, these are some of the benefits:
- Peer-to-peer banking and transactions without interference from third parties.
- Absence of third parties to slow the process down, instead smart contracts will be adopted.
- Instantaneous cross-border transactions.
- Safe and secure transactions.
- Zero or near-zero transaction fees.
- Unhindered access to loans and other mainstream financial services and benefits
For the financial industry to thrive and be able to cater to all, without prejudice, then it is imperative that they consider decentralization as the solution. Some banks have begun to see the benefits, and are beginning to adopt the blockchain technology, hence, we are hopeful for a better tomorrow for the financial industry, as more decentralized fintech industries have begun to spring up.