Bank AI

Revolution

Rise

<ul class="list-ic vertical">
 <li><span>1</span> <a>Retail banks in the Middle East and developing countries of Asia have been slow to adapt to pioneering technologies.</a></li>
 <li><span>2</span> <a>J. Pablo Ortega believes distrust is mainly present in countries with high inflation.</a></li>
</ul>
<p>It has been established that there is a lack of trust in banks in many developing countries. Fintech and crypto firms must work towards gaining confidence and building trust among people.&nbsp;</p>
<h2 class="wp-block-heading" id="strong-the-distrust-that-is-holding-back-the-fintech-revolution-strong"><strong>The Distrust That is Holding Back the Fintech Revolution</strong></h2>
<p>According to an executive from a payments firm, a fintech and crypto “revolution” could solve the financial exclusion issue in developing countries. However, the unbanked need to be convinced of their reliability and trustworthiness.&nbsp;</p>
<p>The executive, Juan Pablo Ortega, the founder and CEO of the online payment platform Yuno, believes that distrust exists in countries with high inflation.</p>
<p>Yashish Dahiya, the CEO of Policybazaar, highlighted at Web Summit Qatar that financial inclusion is crucial to lift 750 million Indians out of poverty in the next 15 years. However, the Indian government banned cryptocurrency exchanges like Binance, Kraken, and Kucoin in December 2020, making it unclear what role crypto will play in this movement.</p>
<h2 class="wp-block-heading" id="strong-slow-adopting-nature-of-retail-banks-strong"><strong>Slow Adopting Nature of Retail Banks</strong></h2>
<p>Retail banks in the Middle East and developing countries of Asia have been struggling to find fresh sources of revenue and are sitting on bundles of cash with little direction in what to do. Their primary source of income comes from charges, which in some cases have reached absurd levels.&nbsp;</p>
<p>They rely heavily on these charges and fees to generate revenue in the present low-interest environment. Banks have been granted low-cost loans from European institutions, such as the European Investment Bank, with little indication whether this money, destined for small to medium-sized enterprises, actually ended up with real SMEs.&nbsp;</p>
<p>With actual companies drained of working capital and constantly burdened with accumulating charges, penalties, and interest, it is no wonder that distrust in the banking institution is growing rapidly.&nbsp;</p>
<p>Not just among small and medium businesses but retail clients too, many of whom are frustrated depositors or pensioners with little choice of what to do with their money. A lack of financial education is also the reason for these people, as they cannot diversify.</p>
<p>For example, in a city in the Middle East, Cyprus’ Central Bank governor warned at a recent conference that the banks need to be more imaginative and discover fresh sources of revenue, mainly through efficiencies and new products.&nbsp;</p>
<p>However, more must be done to bring these banks into the new digital services and fintech field.&nbsp;</p>
<h2 class="wp-block-heading" id="strong-fintech-companies-leading-the-charge-strong"><strong>Fintech Companies Leading the Charge</strong></h2>
<p>In contrast, fintech companies are fast gaining ground, providing competitive services such as <a href="https://www.thecoinrepublic.com/2022/09/22/hesabpay-e-payment-solution-of-afghanistan-successfully-shifted-towards-algorand-blockchain/" target="_blank" rel="noopener noreferrer nofollow">e-payment </a>systems, taking advantage of low overheads a fraction of what it costs to sustain a bank branch in the lower side developing countries.</p>
<p>The slow pace of reforms, lack of cooperation from civil servants with endless streams of yellow tape, and back-door efforts by those favored by politicians to unfairly write off debts or embezzle taxpayer’s funds by way of favorable terms for public contracts have contributed to the problem.&nbsp;</p>
<h3 class="wp-block-heading" id="strong-summary-strong"><strong>Summary</strong></h3>
<p>A payments firm executive believes that fintech and crypto could solve the financial exclusion issue in developing countries. However, unbanked individuals need to trust their reliability first. Retail banks in the Middle East and Developing countries of Asia are struggling to find fresh sources of revenue and heavily rely on charges and fees.</p>
<h4 class="wp-block-heading"><strong>Disclaimer</strong></h4>
<p>The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading in stocks, cryptos or any other related indexes comes with a risk of financial loss.</p>

Slow Adaptation & Distrust in Banks are Hindering Fintech Rise

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Thecoinrepublic.com

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