Banking services meets blockchain
We will start with what you probably know already. The banking industry is undergoing a shift from physical (traditional model) to digital operations. One of the parties playing a huge role in this shift is Gen Zers.
Digital services are becoming the norm because they are allowing people to access their accounts and financial services globally. For example, mobile banking is one of the latest go-to methods for all financial transactions, including access to deposits, balance management, account transfers, loan applications, and touch payments.
Although it is like having a bank in your hands, it is still a long way from being perfect. It is also not fair.
Problems with current banking services
There is no need to beat around the bush: banking services are expensive and slow. However, you will be surprised because almost all other sectors are racing ahead fast. Technology is ripping off the devices of yesteryears and replacing them with new options at rapid speed. For example, new mobile phones, cars, and computers are some of the innovations unfolding as we watch. They are newer, faster, and more efficient.
However, banking appears to be left behind. Why would the industry be left behind? Is it deliberate?
It is all about fees
Because banks are for-profit organizations, their target is optimizing returns. They seek to make as much money as possible from you as opposed to for you. Let us demonstrate this. If you have some cash in a bank, it is likely to earn you some interest, but at a very low rate. In most cases, this does not surpass 2%. However, banks lend cash to borrowers at very high-interest rates. Check the average interests below:
- Mortgage Lending Interest Rate = 2.98%
- Student Lending Interest Rate = 4.5–7.3%
- Credit Card Lending Interest Rate 16.15%
Notably, banks do not have a problem with the rates we have highlighted because their clients rarely complain. They simply accept. They want you to keep money with them but provide very low interest rates. They take so much but give very little!
Blockchain for finance: The future is here!
By now, you have probably heard of blockchain technology and crypto coins, such as Tron and Bitcoin. What about how they are impacting the world? However, we must indicate that these technologies are very complicated. Although they have a lot of benefits for you, most banks will not want you to appreciate them because they are likely to lose their source of revenue.
- Blockchain technology advantages
The blockchain technology has demonstrated its huge potential because it can support millions of transactions every day. When sending money using blockchains, the transactions are completed at lightning speeds. The cost is also very low, and you can say goodbye to:
- Processing fees
- ATM fees
- Long waiting times
- Account fees
Using blockchain technology, things are a lot fairer compared to traditional banking.
- Transactions on blockchain are powered by computing
Blockchain helps to ensure that transactions are faster, cheaper, and international. Does it sound too good to be true? Many are those who think so. Well, we are going to demonstrate. Think of it like the social media messaging app, where communication, such as chatting, happens in real-time. Now, this is what is replicated in blockchain transactions.
Since there are no middlemen, the transactions are finished fast. Again, the cost is very low because no bills such as rent and storage are incurred.
- Blockchain simplistic
For transactions to run on blockchains, it is powered by computing. Then, the details are added to the blockchain by the nodes on the system. If you send $200 on a blockchain platform, the amount is deducted from your account and credited to the recipient. Then, the details are captured in the next block. Instead of using a centralized authority to run the transactions, a program does it for you.
Conclusion: The future of finance is better for all with advanced technology
This post has demonstrated that the traditional banking system comes with a lot of problems and limits that make it very difficult for millions to have bank accounts, credit cards, or debit cards. But this is unfair because no one should be locked out.
Banking is necessary, but the banks aren’t.
hi.com comes to offer a reliable solution that is easily accessible on your phone running a not-for-profit model.
For people who hold the view that banks make banking services challenging to get for many people, have high fees, and snail speeds, Hi might be an excellent option.