New Market Trends Show that Digital Banking Isn’t Dead
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The COVID-19 pandemic might have had an impact on every aspect of human life but one sector that was particularly affected was the financial sector. Between banking halls being shut due to social distancing and the crash of stocks worldwide, many people turned to fintech solutions and digital banking to hedge their bets and continue to access banking services.
As vaccination efforts progress around the world and lockdown measures are lifted, there has been concern about digital banking unravelling as a fad that was spurred on by the pandemic with no long-term staying power.
However, as the last quarter of 2021 draws closer, emerging data show that not only has digital banking avoided a decline but has actually seen growth.
Digital Banking to the Moon
A quick look at the digital banking space shows that many firms are reporting record growth rates as well as expanding on their roster of products and services. Take EQIFi, a DeFi project backed by a digital bank in EQIBank that has reported as of September 2021 that its current growth rate is 90% per week.
EQIFI is one of the top startups in the decentralized finance (DeFi) sector, which leverages blockchain technology (the technology used for creating cryptocurrencies) to provide financial services to users. EQIFI offers access to a lot of the services consumers expect from traditional banking platforms, due to EQIFI being powered by a licensed, regulated bank in EQIBank.
There is the option to earn interest in ways such as staking (locking away funds for a fixed amount of time) and contributing to a liquidity pool. The EQIFI card means that users can spend their tokens as easily as they would fiat currency at any merchant that accepts Mastercard payments. Despite already having an impressive roster of offerings, EQIFI has announced that it will be expanding in the coming weeks.
More specifically, EQIFI announced that it would be expanding its offerings to the Tezos blockchain ecosystem, which is a top proof-of-stake ecosystem. Now, Tezos users will be able to access EQIFI’s staking and borrowing services. The goal of all of this is to ensure that even more people have access to the many benefits of DeFi.
“A product offering with an industry leader such as Tezos signifies the bar EQIFI is setting in the DeFi space. Providing exposure to Tezos holders for staking and borrowing is just the next step in positioning EQIFI to become an industry leader,” said Jason Blick, Chairman of EQIFI, following the announcement.
Why Digital Banking Will Endure
Despite the pessimism from some parts of the financial world, digital banking is well on track to continue its current trajectory of growth. First, the pandemic showed the world that many processes that we had believed could only be done physically could be executed digitally with ease.
In fact, studies have shown that many people had no plans of ever returning to physical banking branches even after the pandemic. With the ease of doing banking from a phone or computer, physical banking branches are not needed as much and the use of digital banking will likely continue.
Additionally, the plethora of tools afforded by fintech and digital banking are changing the landscape of how consumers can access financial services, especially compared to the mainstream financial world. DeFi companies such as EQIFI allow users to, for example, access loans with greater ease and privacy. In a traditional banking system, a long and rigorous loan application process would need to first be completed and even then, acceptance is not guaranteed.
With platforms like EQIFI, this process is all but eliminated. Digital banking also offers more accessibility to unhoused individuals and fintech allows for investment opportunities to be accessed by people with smaller amounts of money.
For centuries, the traditional banking system did not allow for large segments of the population to access services and even when they did, certain services were reserved for only the wealthy. Digital banking and fintech essentially democratized the industry and for this reason, consumers will continue to flock to digital banking platforms post-pandemic.
Moving forward, we can also expect to see more digital banking platforms pop up with even more innovative products and services.