What Banks Don't Tell You: How Their Power Results in Worse Service
Of all the industries, banks have by far the greatest influence on how the modern economy works. Due to such enormous solicitation of power over the public and private sectors, one problem has been long emerging — not only that most financiers are stuck in the last century, they also at times consider themselves pretty much untouchable
In this article of our continuing series, we will introduce three other ailments of the current banking sector. Last time we looked at discrimination against industries like cryptocurrencies and gambling. You can find the full text here.
Slow adoption of new technologies and obsolescence of services
Only in recent years have banks decided to finally start offering interbank instant payments. This is probably the result of the fact that between 2016 and 2018, cryptocurrencies and the flash transactions associated with them experienced a large increase in popularity among the general public in many countries. Competition as fierce as a whole new industry has forced banks to improve the services they offer.
Surely every reader can think of at least three areas where financial institutions fell asleep. Among many other things, just think about the hassle of setting up an account - no matter if personal or for business purposes. Modern algorithms have the ability to scan information from an ID photo, take a picture of you and perform address verification (like Revolut or N26 bank). However, despite such progress, the vast majority of current banks still require people to physically visit a branch to open an account.
Banking regulations and their impact on you
As we mentioned in the previous article, financial houses have a problem with providing services to entities that work in various stigmatized industries.
- Unreasoned account cancellation: Banks have the right to cancel your account at any time without giving a reason. You may end up having your account blocked only for buying cryptocurrencies. This is indeed a slippery slope that sets a very dangerous precedent and may eventually evolve into a justification for other possible discrimination imposed by financial institutions.
- Declining Transactions: Refusing to process monetary transactions is a widespread and ongoing problem. The bank does not even have to have authorization from the police or other security forces whatsoever.
Banking willpower is a worldwide problem
In 2013, Cyprus was on the verge of bankruptcy. In order to avoid the worst, intensive negotiations were taking place between the government and European financial elites.
The outcome of the discussion is often very hard to believe. Just within a few days, local Cypriot (now defunct) Laiki Bank reduced all depositors' funds to the level of €100,000. If you had €150,000 deposited, you lost the entire 50,000 EUR. The Bank of Cyprus behaved quite similarly, taking a fee of 47.5% from all deposits above €100,000. Pretty wild, don’t you think?
Over 4,500 people lost their life savings. €7.7 billion was straight up drowned in the crisis, as clients never got their money back. Heated lawsuits revolving around this are ongoing until this very day, though satisfaction is nowhere in sight.
This is a prime example (of many), perfectly illustrating the power that governments and financial institutions have over our resources.
What can we do to make a difference?
As all of the issues and obstacles mentioned above affect us as well, and we experience similar situations on a daily basis, we have decided to make it stop. For the past few months, we’ve been working on solutions.
We’re building a platform that will deliver the freedom of handling your money as you always intended to. On this platform, only the account holder will decide where the funds go, not the banking institution or any other third party.
What’s more, we’ll also deliver a similar solution for entrepreneurs to finally let them build their dreams with no comments and restrictions from banking institutions.
All this in a safe, simple, fast, and online way. Just as it should be in the 21st century.