Traditional banking has had its share of challenges. However, if the past few years are something we can learn from, most of these challenges can easily be dealt with using technological innovations. More so, the disruption of the banking industry by blockchain has primed it for positive changes.
Think about the many cases of fraud and scam many banks are facing. For instance, UKcustomers lost over £500m to scams in only half of 2018. If only they had in place a system that is hack-proof and transparent, such issues would never have risen. And that is not the only problem facing traditional banking because slow wire transfers, loan processing, and recollection and human errors all characterize traditional banking.
The Future of the Banking Industry
Technology has always been seen as intimidation for traditional banking, but not anymore, banks are starting to see it more of an opportunity to do better. The main application of innovative technology such as blockchain in banking would be in making payments and loans. The new automation associated with blockchain would go towards ensuring speedy and efficient service delivery.
The fact that blockchain provides an opportunity for banks to cash in on large, borderless and decentralized transactions makes it a lucrative disruption ripe for implementation.
Do we need blockchain disruption in the banking industry?
Fintech startups are already providing an opportunity for banks to revitalize their transactions using blockchain. There are many benefits for all parties involved, but most benefiting parties would be the banks themselves and their customers. However, the extent to which blockchain integration in traditional banking would benefit the entire human race will depend on facilitating microfinance platforms such as AssetStream.
Blockchain disruption of the banking industry through microfinance platforms is necessary for several reasons. Here are the most impactful ones:
- The need for projects that are geared towards providing financial services away from the traditional banks to the majority who are the unbanked population.
- The need for registered microfinance platforms that bring together local agencies, lenders and borrowers thus eliminating the need for the traditional banks
- Reducing grunt work through a flawless and reliable credit rating and approval process.
- A blockchain based microfinance platform can offer lenders with an automatic matching system which enables them to dictate their loan conditions. In return, the system gives them a perfect matching candidate for their loans.
- The need for low credit defaulting. In blockchain microfinance platforms such as AssetStream, the loan borrower is bound by two contracts; one with the local agency and the other with the platform itself. As such, the platform can invoke legal proceedings against defaulting borrowers through the local agency.
Efficient microfinance made easier
Is blockchain integration in microfinance a myth or a reality, you might be wondering? Well, it’s very much a reality with projects such as AssetStream that are based on blockchain already changing the borrowing landscape. The application of blockchain in microfinance is breaking traditional barriers by allowing the underprivileged to gain maximum benefits.
Advantages of AssetStream in microfinance as an alternative to traditional banking include:
- Fast transactions through the introduction of Stellar Protocol
- Speedy loan repayment process since AssetStream promotes punctuality in the ‘community.’
- Reduced physical infrastructure hence reduce the possibility of human error
- AssetStream has an efficient Credit Rating and Credit Scoring which measures the probability of a borrower to repay a loan thus reducing/eliminating ‘risky’ borrowers.
- AssetStream is an automated and convenient process that increases efficiency and overall user experience.
Why not Start Now
It is time that traditional banking systems got a new voice especially for the unbanked. With AssetStream, you have a chance to be part of a movement towards innovative microfinance that is set to change the way traditional banking systems work. Participate in AssetStream as a local agency, a lender or even a borrower and push the agenda for zero poverty among the unbanked population.