The banking industry is becoming increasingly centralized, a trend that the 2008 financial crisis accelerated. One in four independent U.S. banks disappeared between 2008 and 2015. Even larger banks are cutting down on their brick-and-mortar presence: 1,700 U.S. bank branches shut down between June 2016 and June 2017.
As banks consolidate and locations close, many communities wind up becoming “banking deserts.” Residents of banking deserts have few options for essential financial services such as fair access to credit or safe storage of their savings, which forces them to fall back on predatory service providers (such as payday lenders) while communities who enjoy banking access can use bank services to build their wealth further. Banking access isn’t just a question of convenience, but of economic justice. Currently, 2 billion people worldwide are unbanked.
Smartphones and online banking offer solutions for the unbanked; media measurement company Zenith predicted that two-thirds of the worldwide adult population would own smartphones in 2018. Many larger banks who have closed less profitable branches point to mobile and online banking services as both a factor driving down brick-and-mortar location use and an adequate replacement for branch services.
But in reality, digital banking has yet to meet consumer needs adequately. A J.D. Power study of the 200 largest banks in the U.S. found that while Millennial consumers appreciated digital bank offerings, customers who only used online or mobile banking were unsatisfied with their bank services.
Even if banks can fix their digital banking platforms, the increased centralization of banking services still leaves many customers out in the cold. The Small Business Administration recently concluded that U.S. small businesses have particularly struggled to recover from the 2008 financial crisis because larger banks are far less willing to lend to small companies than fast-disappearing community banks.
The banking system needs an overhaul, complete with more diverse ways to access financial services such as credit and more user-friendly digital platforms. Cryptocurrency presents some unique opportunities to overhaul the banking system and increase access to banking services.
Baanx is using a decentralized, open source platform to offer crypto banking solutions that can help everyone from under-banked communities to crypto investors seeking a banking platform that seamlessly integrates their fiat and crypto holdings to organizations interested in offering new banking products. Here’s how:
The Baanx Platform
Baanx is a blockchain-enabled cryptobank and financial services network. Individuals, businesses, charities, and banks themselves can use the secure, open-source Baanx platform to offer cryptobanking services. Baanx shares their banking license with their customers, allowing those customers to in turn offer banking services.
Baanx CEO Garth Howat comments that “Baanx is breaking down the barriers of traditional banking via a decentralised fintech ecosystem based on open-access blockchain technology which will enable brands and businesses to safely offer their own crypto products and services.”
Obtaining a banking license on their own would be prohibitively expensive, time-consuming, or subject to strict regulation. Baanx runs the “back end” of these banking services, ensuring financial stability and regulatory compliance, while partners offer branded banking products to their consumers.
A wide variety of banking arrangements are possible through the Baanx platform. A retail company, for example, could partner with Baanx to offer branded financing options to its customers, driving up revenue and customer loyalty.
A charity could use Baanx services to provide micro-loans to underbanked communities, mitigating economic inequality. An existing bank with little experience or confidence in the crypto sphere could partner with Baanx to offer cryptocurrency banking services for its crypto consumers, increasing their customer satisfaction rankings. A community organization could form a bank to provide credit to small business entrepreneurs in their neighborhood.
Individual Baanx users have access to a wide variety of blockchain-enabled financial services. Users can keep both fiat and cryptocurrency accounts in their secure accounts and can pay a small fee to freeze the value of their crypto tokens, protecting themselves against market volatility.
Users can send secure, speedy crypto or fiat payments directly from the platform, tie their accounts to a virtual payment card to pay at retail locations with crypto or fiat currency, and access in-app crypto exchanges.
As the platform continues to grow, Baanx plans to develop savings accounts (which will use AI and crypto-based automation to generate higher returns for customers than ordinary banks) and third-party apps and APIs to continue offering more and more services.
All processes in the Baanx ecosystem will be powered by blockchain Baanx tokens (BXX). Institutions and individuals who offer cryptobank services through Baanx receive a share of Baanx’s profits in the form of BXX Tokens. Token holders who own 20,000 or more BXX tokens across the entire Baanx network also earn the right to 20% of net transaction profits.
Crypto users trying to integrate their financial lives into one platform, underbanked communities trying to fill the gaps with digital banking services, and companies trying to offer new financial products are just a few of the many reasons why people are dissatisfied with the current banking system. Open access crypto banking platform Baanx provides tools for overhauling the banking world.
Disclosure:
The author has had a working or personal relationship with one or more companies mentioned in this article in the past. Access to mentioned company’s management and information was made through the author’s personal network. All information was vetted prior to posting.
Disclaimer:
This essay is not intended to be a source of investment, financial, technical, tax, or legal advice. All of this content is for informational purposes only.