Blockchain – creating a world of opportunities
“There are a number of banks and financial institutions looking at blockchain as technology that delivers value to customers – in the form of lower fees, faster transfers and simpler processes. But potentially much more significant, but much less publicized, is the impact that blockchain could have on individuals without access to banks (and financial services) around the world. ” American Banker.
Blockchain technology is introducing major changes in the global infrastructure of financial services. And the industry is not just paying attention, it’s acting.
According to the World Economic Forum:
- More than US $ 1.4 billion were invested in blockchain between 2013 and 2016;
- More than 90 central banks are involved in a discussion related to it;
- About 80% of the banks started projects associated with blockchain until the end of 2017;
- More than 2,500 patent applications have been filed related to blockchain;
We can no longer ignore the impact of blockchain on the financial services industry – a great influence on Know Your Customer (KYC) processes, customer identification and authentication, and costumer loyalty – it is even anticipated that blockchain will go beyond this and will be applied to many sectors.
Opening the door to financial inclusion
One of the largest and most immediate revolutions to be introduced by cryptocoins is financial inclusion in countries with an underdeveloped banking sector.
About 3.5 billion people around the world have insufficient access to financial services. They don´t usually go through bank verification processes and are unable to pay the costs associated with banking services, such as commissions and others.
However, blockchain is changing all that. It allows the transfer of funds in a much more accessible way, avoiding the payment of commissions involved in the opening and use of accounts. Since transactions take place on the Internet, all you need is a mobile phone that is connected. Despite not having access to banks, the majority of this population has a mobile phone.
Without the need for intermediaries, the cost of blockchain-based transactions is much lower. With international remittances, for example, rates fall from 6% to 1-3% per transaction / remittance – a stimulating difference for individuals who have difficulty accessing banking services.
Opportunities that mean billions of dollars
The appeal for inexpensive payment experiences is leading the blockchain for a myriad of services beyond banking – namely to the area of private urban transport. Take the example of Grab. Launched in Kuala Lumpur, Malaysia, the company dominates the Southeast Asia ride request market – with 2.3 million drivers in 168 cities in eight countries. It is experiencing phenomenal success, having raised $ 2.5 billion from investors last year, which raised its value to $ 6 billion.
Some attribute the success of Grab to its ability to conquer the population without access to banking services / cards, by offering a virtual payment for their services.
That is, Grab allows its customers to pay for services with the company’s mobile wallet, the Grab Pay – which can be used for more than just travel. It can be used to pay for goods and services from stores and restaurants. It comes across as very similar to Alipay – a Chinese payment service through which a QR code is digitized and an amount is introduced.