First Nigerian Banks, Then The Rest

Technology is changing things a great deal. Most of us are already aware of this.

In the financial arena, FinTech long posed a threat to the banking system. This is where technology provides users similar offerings to what the bank had, yet in a more efficient and less costly manner.

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For the West, the process was a bit slow. While FinTech made huge strides in the last 15 years or so, the age of the population caused a slowdown. FinTech requires people to be technologically proficient. This caused much if the West to operate in a similar manner as they did before. That is, of course, changing as the number of young people are growing coupled with the decline in the older generations.

One country that did not face this problem is Nigeria. It has a young, technologically advancement population. These people were introduced to the world of the Internet via the smartphone. This enabled them to instantly join the "app-world" which led to FinTech becoming very popular there. Naturally, this is poses a major problem for the banks.

These banking platforms are attractive to millennials and other tech-literate customers and require little or no physical banking presence. The obvious advantage they have over conventional commercial banks is low cost.

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Here we see what is expected to be an ongoing wave of disruption across the world of finance*. The banking and financial system are going to see a lot of changes, many which they are not going to like.

The Threat Of Cryptocurrency

Cryptocurrency received a lot of attention because of the speculative nature of things. The price action gets people interested. This is aided by the mainstream media promoting what is taking place with Bitcoin and Ethereum.

What is rarely mentioned is the disruptive nature of cryptocurrency due to the fact that it is able to engage in transactions outside the traditional system. No bank is required to transfer value from Point A to Point B. At the same time, a digital wallet serves the purpose of letting on send, receive, and store money.

This poses a major problem because people can operate outside the fiat monetary system. That is the stranglehold the banking system has. As people get more comfortable operating in cryptocurrency then we will only see this grow.

Cryptocurrency is a threat because it enables for different economies to form. As communities are tokenized, they have the ability to operate as their own economies. This is a place where the bank are not needed. Hence, they are shut out of what eventually will be the equivalent of trillions of dollars of economic activity.

That would certainly hurt the bottom line.

The Threat Of DeFi

Decentralized Finance (DeFi) is a major hit to the banking and financial sectors. We are seeing Wall Street being attacked at its very own game.

We can say that DeFi is going after "the rest" in the title.

Here we see a brank new, clean sheet financial system being erected. Again, with so much money starting to float around in cryptocurrency, it only stands to reason that we would develop more advanced financial applications. This is exactly what is taking place.

In fact, we see a blending of the old with the new. Wall Street has pondered what it would be like to move the equities markets to exchanges. They do not have to really worry about that. The blockchain industry is already doing that for them.

Synthetic Assets are already becoming very popular among traders. The ability to trade the likes of Apple, Tesla, and even SpaceX is appealing to people. While having access directly to the company is not possible, creating something that is tradeable is. While there is no claim to ownership, nor the income the company generates, synthetic assets allow people to speculate upon the price action. This is what traders and long-term investors want to do.

Does it really matter whether one is dealing with the "original" asset class? As long as the liquidity is there, which comes from volume, people will utilize that just like they do the shares listed on exchanges. The difference is people can buy them with their cryptocurrency.

The amount of money that is flowing into the DeFi space keeps growing. At the same time, the industry itself is expanding on a daily basis. Each day there are millions of dollars in payouts that are going into people's wallets. Most of this money is remaining within the DeFi world, being staked so that it grows.

As the offerings expand, we can foresee how this is going to unfold. The idea that it is going to get smaller is not feasible. That horse already left the barn as they say.

From The Nigerian Banks To Bank Of America

The difficulty that is facing the Nigerian banks affects all depositing banks around the world. Bank of America only differs from those in size. The challenge is mirrored.

As more money is "moved" into the world of cryptocurrency, this takes more away from them. Banks depends upon interest earned on loans or interest bearing assets as well as fees to survive. If the amount of deposits drops a great deal, there is a lot less money to lend.

This will naturally eat into bank profits which will force consolidation across the industry. Over time, we will see it getting smaller, similar to how the revenue generated by physical retail is declining in the face of online commerce.

Often, the best way to harm a corrupt system is simply to opt out. This is now becoming a possibility due to cryptocurrency and the resulting construction of DeFi. With these expanding on a daily basis, billions of people have another alternative. Instead of dealing with a system that charges onerous fees to move money around, as well as being slow, people can simply say "No Mas". They can simply turn around and leave.

Through the process, they will first harm the Nigerian Banks, then take out the rest.

The process is already underway.


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The biggest rugpull to ever happen won’t be on DeFi protocols but between DeFi and tradfi...I was thinking about this the other day, is there anyway out of this predicament for TradFi?

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...is there anyway out of this predicament for TradFi?

At the industry level, I do not believe so. It is like I mentioned with physical retail, there will be companies that adapt but more will die.

#Finance is going to have a tough time trying to hang on. The successful ones will merge with #DeFi in some way. To me, it is the future.

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Nigerian banks instead of trying to stifle crypto could just adopt it while adding more incentive to use it amidst crypto threatening to bring massive competition. But then anything the financial sector can't control, they immediatelu deem a danger to the country's growth instead of admitting the obviously that the banks have only been ripping and trying to stifle people. The population here are beginning to realise how huge Crypto and DeFi is and despite government's ban crypto is still surging ahead, just without the banks

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They deem it a danger because it is just that. For decades, #retailers were oblivious to the threat Amazon posed. That ended up being fatal.

I dont think the Nigerian Banks are going to make that mistake. Instead, they are aware of what is taking place. The question is whether they, or other #banks can stop what is taking place? I do not believe so.

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For one, they're a business before any other thing. Hence they're ass-licking the central bank itself and passing the publicity that crypto is dangerous.

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It's funny.... I mean very funny

I read this part that talked about banks not being able to have funds to give out loans and I laughed mischievously

You know before now, it was difficult for upcoming entrepreneurs with a visible business idea to obtain loans from the bank

Most of them got duped in the process because, they wanted to use the back door

It was so frustrating, because a lot of Nigerian lost faith in being able to get their ideas off the ground, up and running, since they couldn't access loans that easily

Now, imagine the same institution no longer having the same thing, they had once, but never giving out on good terms, again

This would be a situation where gravity comes into play .... What goes up, comes down 😂😂😂😂

Forgive me for laughing, it's just that the banks deserves to be laughed at.

Someone should not forget that they care less about the people's business. They are mostly concerned about the interest rates on those loans they give out. And collaterals if there is any.

So, if Defi is going to put them out of business, it better do it fast ..... 😏


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It is an interesting turn of events.

You know before now, it was difficult for upcoming entrepreneurs with a visible business idea to obtain loans from the bank

What is the Nigerians Banks were not needed. Instead, #DeFi could end up offering the resources aspiring entrepreneurs can utilize.

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Often, the best way to harm a corrupt system is simply to opt out.

That's an option for sure. The other is electing another government that has as objective the well being of people and not just their own. I'm curious to see when people are going to realize they have a powerful weapon, for which people had died.

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The other is electing another government that has as objective the well being of people and not just their own.

I do not believe this is the case. What government has the well being of the people as an objective?

I do not see that existing since #politicians (all of them) operate in their own self interest.

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Often, the best way to harm a corrupt system is simply to opt out.

And opting out with pleasure! Being involved in crypto have caused me to pack my funds in cryptocurrency and having to convert them back to fiat is a habit I dread.

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We still need to operate in #fiat since that is what our systems utilize. So opting out entirely into #cryptocurrency is not viable. Yet we can reduce the percentage which we operate in.

At first it starts slowly, then it grows.

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I have moved away from banks to FinTech a few years ago, just as soon as #Nubank was founded in Brazil. Now, I'm slowly moving towards cryptocurrencies and DeFi.

Hopefully, one day, all we're going to need is a #Hive account and nothing else.

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Hive Backed Dollars help with the idea of #hive taking over more of our #financial portfolios.

I am growing my cryptocurrency holdings on a regular basis, a move that will offer me more options in the future.

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Fantastic write up. Nigeria still need to learn a lot which i believe the availability of internet will really help. The effect of crypto cannot be under emphasis. In my last post i sited so many reasons on how cryptos can really help the country with cashless policy that the country want to emback up. But I dont think they will be willing to learn from that.


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#cryptocurrency has the potential to offer a great deal help to a lot of nations in addition to #Nigeria.

The Central Banks and Governments of the world have really put the populations in a tight spot. Crypto is one of the pathways out.

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My parents are still very hesitant about doing online banking. You are right in saying it is a very generational thing. More and more those old opinions are dying out. It will be the same with crypto. I had a really great chat today with my wife's broker about cryptocurrency. I think we could have talked for a good hour about the impact and disruption it is going to have if we weren't trying to be respectful of each others time.

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Sadly, death often is one of the only ways to get out of the old mindset. The adoption of #technology is usually slowed by those adverse to it, the older generations.

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Yeah, I have been pretty lucky that my dad was always into technology so even though it wasn't as conspicuous as it is now, it was always something I was familiar with. I still remember programming in basic on our TI desktop.

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You know the threat or DeFi and cryptocurrency is just inevitable, the banking system can not out run it or push it away neither will fiat money rule over cryptocurrency.

So I will say the fast and better it is for the whole world to accept cryptocurrencies and the bank also to initiate their mode of transaction the better for them to overcome the shock crypto currency will give them.

Nigeria is really something else, for them to barn crypto currency from the banking sector makes them prone to risk of loosing their interest in crypto transaction.

Nigeria banking sector not being able to involve in crypto currency did not stop the chain of transaction from point A to Point B rather it increased the rate of people's knowledge about crypto currency and added to the population of people investing in crypto currency.

Nigeria banking sector have a lot to suffer when this hits because things is changing and if CBN could not find a way to match the use of Fiat money and Cryptocurrency then they have a slim chance of there earnings.


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We are seeing far more applications that cut down the fees and times so the banks are outdated. People want fast transaction times and lower fees. So I think crypto is huge issue for the banks and they will need to change if they want to stay relevant.

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Because this is such an awesome post, here is a BBH Tip for you. . Keep up the fantastic work

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The customer-bank relationship is definitely changing drastically. Certainly, customers are going less to bank branches and are relying more on the digital option. In Venezuela, for example, the use of wallets such as Binance, Reserve, Paypal, Merca dólar and others has not been boosted by technology or the internet (it sucks), but by the growing need of people to protect their income from the rampant inflation (even in dollars) that is sweeping our economy, in addition to the lack of cash in circulation. Remittances received from relatives abroad have also helped to increase the use of wallets and the like. Venezuelans today prefer to take their money out of the conventional bank and transform it into a more valuable currency or cryptocurrency and make their transactions through wallets and the like. Obviously, banks are concerned about this daily outflow of funds from their savers' accounts, to the point of offering on some occasions a much higher interest rate than usual, just so that the client does not mobilize the money for one or two days. On the other hand, the Central Bank is seeing that the control that banks used to exercise over account holders' money is being lost and has just enacted this week a kind of regulatory framework for Fintechs, which could somehow affect their operation within the Venezuelan territory, taking into account that most of them are registered outside our borders.

Translated with www.DeepL.com/Translator (free version)

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I am totally agree with the last statement because at the end of the day people look for simple and quick solution of their money transfer. the fee and the complexity and timing is not acceptable to many people in this modern world. if they get some alternative which is very smooth quick faster and simple enough to transfer fund from home they will obviously prefer the way. now it's time to see that changes from Nigeria to Western world

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Just as we have seen a rapid advance in the last few months, I think that by December of this year we will see the banks begin to fall one by one.

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