The new financial ecosystem and its relationship with traditional banking is like a multi-circled Venn diagram: there are overlaps with some of the disruptor ‘neo-banks’ offering debit cards, for example, but no loans. There are many more examples of ‘we offer this, but not that’ in the emerging world of finance and personal banking. This scenario presents a challenge that needs to be answered; which is an opportunity to achieve a first mover advantage.
Banks don’t do crypto
While the majority of traditional banks offer online and mobile banking, they have all remained cautious about embracing blockchain technology and cryptocurrency. The fact that they don’t offer a digital currency service means crypto owners have to look elsewhere if they want to pay with bitcoin or another cryptocurrency. The traditional bank also has another issue, as they are typically geo-restricted, while the current trend is moving increasingly towards borderless banking.
Consumers want a new type of banking that responds to the needs of digital currency owners, and that is what certain newcomers are attempting to offer.
Newcomers answer some challenges, but not all
Coinsbank and Xapo, for example, set out to respond to the needs of people owning cryptocurrencies. Their set-up allows customers to buy and sell cryptocurrency and to access their crypto via ATMs and merchants using a debit card.
There are exchanges for buying and selling crypto, but these don’t answer the problem of how to spend cryptocurrency without changing it into fiat currency.
Or there are payment systems, like the one offered by CoinPayments that has a merchant system with invoicing and crypto wallets. It is borderless, but it doesn’t solve all a crypto owner’s needs, such as getting cash.
Loans have always been big business for the traditional bank and it is obvious that people who own crypto are also likely to want a loan at some point. Startups like Salt and Nexo sought to resolve this with peer-to-peer loans using cryptocurrency as collateral. This introduced a new dynamic into the loan market, but the loans offered are not regulated. Plus, that’s the only service Salt and Nexo offer.
App based banking
However, N26 and Revolut are example of app-based banking systems that aim to bridge the gap between the conventional bank and a new world of finance. Both are exclusively app based and offer IBAN accounts in multiple currencies and have debit cards. Revolut has gone one step further and provides the means to buy, sell and store cryptocurrency in its system. But, neither of them offers loans.
As you can see, these companies are grappling with the challenge of change and each one has to some extent answered an emerging need. But not one of them offers a single source solution with all the functions and services the consumer now wants. And none of them offer a credit card.
But then there is Lendo, which is creating a one-stop solution that combines the services of traditional and neo-banking — and it is borderless. Watch the video — discover Lendo — the single source solution that’s coming soon.