Site icon MONEYINAFRICA

Blockchain, Fintech and the Future of Banking by Austin Okere

Blockchain, Fintech and the Future of Banking by Austin Okere

“Customers besiege banks on the first day of the partial lifting of COVID-19 lockdown: As early as 8 am, bank premises were already full of people seeking to gain entrance into the banking halls for one transaction or the other.

And by 11 am, Twitter was filled with so many posts warning Nigerians about the risks of visiting any bank branch due to the mammoth crowd.” This was Dateline May 04, 2020, on Nairametrics.com. Other blogs had similar screaming headlines. I wrote this article three years ago on May 04, 2017 when Blockchain and Fintechs finally seemed to be gaining traction in filling the gaps left by traditional banks – and surprised that we are still where we are even today. what will we learn from this, and how will we be better prepared not to be caught desperately unawares again? Even though cryptocurrencies such as bitcoin tend to steal the limelight, it is their underlying blockchain technology that is proving to be of practical benefit. This technology , which goes beyond the financial application, is expected to disrupt global supply chains by boosting transaction speed across borders and improving transparency.

Essentially, the blockchain is a shared virtual public ledger where encrypted transactions are confirmed by outside parties. Confirmed transactions are placed in a “block” and added to the chain, hence the name Blockchain . It is this technology that Fintechs are leveraging to disrupt the traditional banks Here in Nigeria, blockchain can help to unlock the immense capital locked in Land Assets that are not enumerated because of an antiquated system of land administrated, which is very ripe for disruption. The most disruptive application of Blockchain Technology, however, is in the Financial Sector; and this will form the focus of my discourse. The consistent complaint about banks has reached a crescendo in recent years. Is this justified? Should Banks be changing?

After centuries of conservatism in receiving deposits and making loans, there are two main issues stirring the yearning for change: The first being that it is a very difficult Club to join as a customer, and hence the large population of unbanked adults.

Secondly, even for the members of this elite club, the relationship is acutely skewed in favour of the banks

They have carried on as protected monopolies with no serious challenge or competition, resulting in very little innovation over the decades.

The biggest threat to the banks […]

Stay in the Know!

Sign up for the latest news and information on African Companies and Economy.

By signing up, you agree to receive MoneyInAfrica offers, promotions and other commercial messages. You may unsubscribe at any time.
Exit mobile version