The last decade has brought more game-changers to the global banking sector than ever before. Politicians are becoming aware of the sharing economy and its benefits to society. People have begun thinking of new ways to go about banking, changing the rules of the game for good.
Public distrust in the financial system after the financial crisis has paved the way for new economic platforms and opportunities. This poses challenges to the banking sector for a number of reasons. Here is our take on why:
1. The Sharing Economy is a Return to the Old-Fashioned Marketplace
In fact you could say that the sharing economy is not really new. It focuses more on a traditional approach to doing business, because its goal is to maximise the use of your idle assets. It cuts out the middle man (banks) and facilitates contact to individuals who wants to exchange goods and money – just like when you go to a farmer’s market or ride with Uber.
2. The Sharing Economy Provides Alternative Lending
The collaborative economy is also challenging traditional banking on the loan market. Gone are the days where you had to put on your best manners and your best clothes if you were heading to the bank to ask for a loan. Peer-2-Peer lending and Crowdfunding platforms like Kickstarter has already proved that the power and democratization of a good idea is enough to get you financial backing. This challenges the banks who may have to rethink their loan-pricing all over again if they want to compete continuously.
3. Blockchain Technology Is Coming
One of the more frequently heard internet buzzwords when discussing banking is Blockchain. Traditionally when you have to make a transaction, it goes through a bank. With Blockchain technology, or transaction encryption through a network of computers, buyers and sellers can connect directly. This means that they don’t need a bank to wire money anymore. When applied to sharing economy platforms, this means that banks will not get commission for transferring money.
The sharing economy is about to change banking for good and with a 335 billion USD growth potential until 2025, only the creativity of the sharing economy users can set limits for a bankless world.