Why you must Quit the Traditional style of Financial services?

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Why you must Quit the Traditional style of Financial services?

Why you must Quit the Traditional style of Financial services?

The International Money Transfer industry is one of the most important sectors of the global economy. According to the finance and development department of the International Monetary Fund(IMF), financial services let consumers or businesses acquire financial goods. The financial service sector provides financial services to people and corporations. This segment of the economy is made up of a variety of financial firms including banks, investment houses, lenders, finance companies, real estate brokers, and insurance companies.

What are traditional financial services?

They are regulated financial institutions such as banks, insurance companies and credit unions. These institutes manage funds and assets in users with a use of a centralized authority. They handle investments, lending, borrowings and even trading.

These institutions offer financial products such as bonds, cash, real estate and equity shares to the general public. These institutions are well-known to the public for generations and have managed to win the trust for decades. It is why many still prefer traditional financial services for all their financial needs.

Old Vs New

Good old financial services may offer their best service and may have won your trust for years but never forget the whole world is shifting along with the latest technological products and so does the finance sector. Latest technology has added many great advantages to the financial sector.

And the question is how many traditional financial service providers are making use of these advantages and are they upgrading their service along with the technology? Most of the time they may be not due to various constraints of going totally digital or adding the latest financial products and services to their ongoing system.

With the high tech devices and technology financing has evolved to a whole new level with many new digital financial services. These service providers offer a range of new and convenient products to their customers.

Few good reasons to quit traditional financing

Time consuming

Traditional financing takes ages to fulfill your requirements due to lack of technology. Transactions may take days to settle. Nowadays time is a very important factor for people as everyone of us runs a very busy life.

So there is no time to spare when getting things done. Digital financial services have proven to be way faster than the traditional service providers with less hassle. The latest technology has made these institutions run fast leaving no waiting times.

Mobility

The introduction of mobility solutions in the banking sector has erased the traditional methods of working and brought about a great change in the working style that the industry has been used to. Since everyone is using mobile devices like smartphones and laptops, the banks and financial institutions created mobile apps to make the transactions way easier.

With these mobile apps the transaction process is automated without any human participation and helps Banks to meet customer expectations, increase employee productivity and cut down on the cost of day to day transactions carried out manually.

With Mobile banking and mobile apps for customers to carry out their financial transactions and other processes through their mobile devices and customers can get any information about the bank’s financial services in detail and at the same time these mobile apps are created to perform multiple security checks at every step, customers are assured of performing more secure transactions through mobile and web apps.

Mobility of payments has transformed consumer behavior and habits and also the way new marketing strategies are built to adapt the new way of payment. Online payment services have enabled low-cost, safe and efficient cross-border payments for businesses and individuals.

Efficiency

Throughout the financial industry technology has been the catalyst to improve the business operations. On the other hand, the traditional financial services rely on legacy infrastructure, meaning that their overall financial system may be decades old and limited in their ability to integrate with other financial platforms or perform complex financial processes.

Customer care

Compared to traditional financial services the financial services that totally run with the use of fintech offer better customer service. With the help of artificial intelligence, they offer automated customer care options such as smart chat boxes, virtual assistants and advisors. Many of these service providers offer around the clock customer service where traditional services limit their service to office hours.

Security

Security is another aspect you need to consider with traditional banking as traditional banks aren't immune to electronic hacking. According to a Business Insider Magazine’s article many large banks and financial institutions maintain their customer and financial data in large data centers. Bank data are often as easy or easier for hackers to access than individual online customer accounts. In fact, some hackers prefer bank data centers because they provide access to hundreds or thousands of customers' data in one place. Same time banks are vulnerable to inside information leaking through rogue employees or nowadays hackers use a system called social engineering to gain access to the valued data through various relationships with bank staff.

Physical in store banking could potentially expose you to the presence of an armed robber. Also, some thieves use phone apps, we cameras and electronic swiping devices like skimmers to access customer card information through atm machines and later they clone your atm card or credit cards.

Crypto Currencies and DEFI

With the introduction of Bitcoins the usage of crypto currencies became really popular for many reasons. The freedom from the traditional banking system and the traditional paper work or visiting banks have been minimized to zero with the introduction of online crypto wallets like Metamask, Phantom, Trustwallet, Electrum, etc.

Decentralized finance (DeFi) refers to a new category of financial systems and institutions built on blockchain technology, which allows for decentralized control and ownership. The main difference is that traditional banking is centralized and governed by governments, banks and financial institutions. But DeFi is decentralized and controlled by a network of users. This can lead to a more open, transparent, and inclusive financial system. DeFi is built on open-source blockchain technology, making it accessible to anyone with an internet connection and main advantages of using Decentralized Finance are as follows.

  •  Since DeFi transactions are recorded on a public blockchain, everyone can check the transparency and audibility of all transactions.
  •  Once a transaction is recorded on a block chain, it cannot be altered, which ensures that the transaction is irreversible and that the records are tamper-proof.
  •  DeFi systems are not controlled by censorship as there is no central point of control, meaning that no single entity can prevent transactions from occurring.
  •  DeFi platforms can interact with each other through smart contracts, allowing for the creation of new financial products and services like lending’s, borrowings, Insurance and much more.

So with all these advantages many prefer to perform their financial transactions through the institutions that are highly advanced in technology. Fin tech not only saves your time but also ensures you a safe, convenient and cost effective service to any corner of the world.