There are tons of FinTech projects talking about connecting the unbanked with banks. But maybe they’re looking at solving today’s problems with yesterday’s solutions. Maybe it’s the banked that we need to worry about.
There are more than six billion people in the world with access to banks. How can we help these poor souls?
It used to make sense to hold money in banks. Twenty-thirty years ago, banks played important functions that were difficult to take care of elsewhere. Getting and sending money, saving, loans — all this used to entail the use of banks.
But now, there is a real difference in that technology makes it easier to do the things that banks used to do, only faster, more easily, and at less expense. Relatively small payments to and from others are increasingly done without banks with services such as Revolut. Savings accounts, depending on your location, can actually cost you money after fees are taken. Seriously — if you live in a part of the world where savings accounts add money to your account, consider the case of Denmark, where the interest rate on savings accounts sometimes drops below zero!
Banks have tried to adapt — internet banking is a thing, after all, but it starts to beg the question — what do we need the bank for? Shouldn’t we be able to take advantage of competitors from anywhere?
Tagion is building an alternative platform that will let users process payments at first. As we grow, savings, loans, and more esoteric financial instruments can be connected as well. And instead of bank owners making decisions on how the banking system works — what interest rates and processing fees to charge, these can (and will!) be made by the users of the system itself. The technological infrastructure underlying Tagion democratizes the power of financial systems.
