Today, financial institutions are trying to keep their heads above water with so many competitors claiming that they have the best deals. As banking wizards look intently in their magic sticks for solutions, they reflected on the possibility of using the internet as substitute providers of financial services. They focused on three of the best internet services: Google, Facebook and Amazon.
Financial industry is so much under-stressed that even big banks are laying off some of their staff. Reuters reported on the sad news that just this week HSBC has begun the retirement process of 100 senior employees in its investment banking division world-wide.
Can social media provide better financial services than banks?
- Google Inc.
Google is a multinational technology company based in the United States that specializes in providing financial assistance to internet-related services and products including: cloud computing, hardware, search, software and online advertising technologies. As the most used search engine in the world, Google is many miles ahead of its competitors.
Google, through Google Venture its capital arm, has been offering startups to various fields of endeavors ranging from agriculture, artificial intelligence, cyber security, hardware, healthcare to the Internet, life science, software and transportation.
- Facebook, Inc.
Facebook is an American corporation, online social media and social networking service. As the largest of the social networks, FB knows no limits when it comes to generation: from grandpa to kids. A recent study conducted by Forrester, one of the most influential research and advisory firms in the world, found that of the adults in U.S. who are using social networking sites, 96% of them are on Facebook.
Last October, the Central Bank of Ireland granted Facebook a license and the authority to make ‘payment services’ and ‘e-money issuance’ with them. Since Ireland is a member of the European Union so Facebook holding a license in Ireland means that FB will be able to offer its payment services in all of the EU member states.
- Com, Inc.
Amazon is an American electronic commerce and cloud computing company, is the biggest based retailer in the internet world by total volume of sales and capital in the market. In Amazon.com, you can buy almost anything under the sun online.
Amazon provides loans to small businesses. Just last year, sellers on Amazon worldwide were able to utilize capital for loans from Amazon Lending whose sales growth has been estimated as $4 billion. This amazing program offers business loans to Amazon’s invited sellers to assist them flourish their businesses. Amazon has long been providing credit card services and recently, it is working hard to increase the number of Amazon credit card users.
Services from internet companies are much better in quality than services from the banks. Internet companies can apply better technology and data provided the principal currency used is Bitcoin.
Bitcoin is a cryptocurrency and a payment system. The system is between peers and transactions are directly between users without any middlemen. Verification of the transaction is accomplished by network nodes and recorded in a block chain, a public distributed ledger using bitcoin as currency. The United States Treasury classifies bitcoin as a currency that is virtually decentralized. Bitcoin is the most enormous type based on its total value in the market.
Created as a reward in a computing power competition, Bitcoin was used to verify and record transactions into Bitcoin’s blockchain. Bitcoins are obtained by mining and can be exchanged for other currencies, products, and services. When you transact with bitcoins, an optional fee will be paid to the miners. This is one way to speed-up confirmation of your transaction.
Solutions for banks
Superior technology and information date in internet companies offer much better quality services compared with banks if internet companies utilized Bitcoin as the primary currency. Banks need innovations to become radically quicker, more uncomplicated and more affordable if they want to survive amidst the stream of social media competitors.
When asking for working capital loan from a traditional bank, the process is complicated and time-consuming. It is a well-known fact that in traditional banks, interest rates for small-business loans are quite high, and bank funding for which a business qualifies is insufficient to completely meet its needs.
And the winner is
- In the battle of Google, Facebook, and Amazon against Banks: Bitcoin; Bitcoin is the winner. The banking industry is so much involved in solving many problems like bad loans, poor profits, Brexit and many more.
- Banks: Bitcoin is the winner as small entrepreneurs and retailers are searching for new supports, not from conventional banks but from non-traditional and innovative sources along internet’s dominion.
- Bitcoin is the currency of the internet for it has better options in the financial system being decentralized, neutral, secured and transparent to include the degree of anonymity, no back charges and low transaction costs.
- Payment freedom
Bitcoin makes it possible to send and get money anywhere in the world at any given time.
- No crossing borders
When transferring money, you don’t have to worry about crossing borders, rescheduling during bank holidays, or other limitations.
- Full control
Bitcoin gives you 100% control of your money as there is no central authority figure at your back.
- Transaction control
Users have control of their transactions as your network is kept safe by Bitcoin. Before adding charges, merchants must talk with the consumer.
- Confidential personal information
Payments are made and finalized without divulging any personal information tied to the transactions. Bitcoin has a great protection system against identity theft; has superb backed up and encrypted to ensure the safety of your money.
- Transparent transaction
All finalized transactions are transparent and made available for everyone to see, while personal information is kept secured in the Bitcoin block chain.
- No manipulators from anywhere
No person, organization or government can manipulate Bitcoin protocol for it is always cryptographically secure.
- No or low fees
Presently, fees are not charged or low fees are paid within Bitcoin transactions but to facilitate faster process, you may pay a minimum amount.
- Merchant’s assistance
Digital Currency exchanges assist the merchants during the transaction process by transforming bitcoins into a fiat currency. Charges for this service are generally much lower than credit cards and PayPal.
- Lesser risks
Merchants are subject to lesser risks as Bitcoin transactions cannot be switched back, no personal data information, and safe; merchants could not be subject to possible losses due to fraud.
- No crime and fraud rates
Merchants using Bitcoin are able to do business where crime rates and fraud rates may be high. In Bitcoin, cheating or conning is hardly possible due to the block chain, a public ledger that serves as protection.
Bitcoin can be the solution
Social media and Internet companies are expanding their financial services that are continuously threatening to traditional banking. However, looking at Bitcoin, you see that it provides authentic-time, borderless and frictionless services. Bitcoin has the lockchain technology as also used in social media and Internet companies. This gives Bitcoin the dominance over banks.
Bitcoin is not perfect for it is still a relatively young and a new currency. People are just beginning to become more aware of it. More people have to understand that Bitcoin has more to offer in its monetary function. It is a much better option than offers from internet companies. Google, Facebook and Amazon as money payment system!