In the first series I provided an introduction to the theme of this series.

We looked at how the current job market is shrinking as a result of the covid19 pandemic. I would like to add that as a second wave is resurfacing we find ourselves again at the mercy of the elements.

We cannot sit on our laurels and hope for the best.

In this article I want to take a look at traditional banking and compare it to what I would consider the new way of banking

Source:https://www.pexels.com/search/bank/

Source

Traditional Banking

Traditional banking is the financial institution that is dedicated to the administration of the money that its clients deposit in custody and, on the other hand, the bank uses that money to grant it as a loan to individuals or companies, charging them interest.

Traditional Banking operates in a way that never allows clients the freedom to grow their money. The system is limiting in the following ways:

1) Slow processing of transactions

The processing of transactions is delayed by the fact that transactions pass through a third party and usually this "middleman" link is usually the source of delays

2)Low interest rates that discourage saving

The interest accrued on savings is usually slightly above the inflation rate of a country meaning over time little movement is made in terms of increasing the value of savings. In fact the lockdown saw interest rates fall to negative figures in some countries in essence meaning you lost money for saving your money with the bank. As a result a huge number of people removed money from the bank and saw to invest in stocks, bonds commodities and even cryptocurrencies.

3) Bank and transaction charges

All deposits in traditional banking attract charges in the form of storage fees, deposit fees and withdrawal fees. In all keeping money in the bank is an expensive process

The alternative..

The list of disadvantages can go on. But the question is what then are my options?

Fintech Banking

Financial technology companies are generally startups founded with the purpose of disrupting incumbent financial systems and corporations that rely less on software.”

 Fintech Banking considers all the disruptive emergent technologies that have put finances in the hands of the ordinary person.

Source

Cryptocurrencies

Cryptocurrencies are one such technology that essentially through the blockchain network (software) and peer to peer transactions (removal) of the third party have essentially put financial freedom in to each individual's own hands.

What am I saying?

Financial Education is the prerequisite for financial freedom. My hope for yo after reading this article is that your eyes are opened enough to empower you to see your finances in a new light. To see how power can shift to your hands. In essence this is my financial education to you. In my next article we will explore fintech In a little more detail.

This is Victor

Signing out