Money is no longer the commodity it was a decade ago. And yes having money does give one a sense of relief, and control and helps realise ones vision and goal but how we acquire money is changing, and so is the form of money. And with the changing business landscape and the digital evolution, the only way one can define their digital future is by becoming familiar and maybe looking at new digital assets especially if you are seeking funds for your business.
Gone are the days of depending on a bank loan or family and friends investing in your business. Entrepreneurs and those seeking funding can now consider cryptocurrency lending because it offers high yielding gains through margin trading on specific exchanges by lending cryptocurrencies. And this move has resulted in traditional financial institutions slowly losing their grip on the market because they are no longer the only option for individuals and businesses.
Lately, thanks to technological advances, digital currencies are taking the centre stage but the spotlight isn’t being shone on non-traditional financial institutions as yet. Despite all this, it still seems as though familiarity still wins. Ironically, some non-traditional financial institutions offer solutions to some of the challenges faced by ‘traditional’ financial institutions because there is less red tape involved.
Reality is that traditional financial institutions still play a huge role in spearheading activities needed to have a thriving economy. But COVID-19 has turned this on its head by forcing the financial industry to revaluate its business model which has opened doors for other non-traditional financial institutions and their lending or fundraising models even if it’s still on a small scale. A good example is custodian banks.
Sadly custodian banks, are often overlooked because unlike traditional banks the core function is to secure the assets of individuals and firms even though it doesn’t offer direct customer services such as lending, collections and deposits.
As things stand entrepreneurs and fund seekers need to look at other non-traditional financial institutions such as insurance companies, venture capital firms, brokerage firms, currency exchanges, and even cryptocurrency exchanges. Based on the business models and financial requirements they could find better financial options that meet their business objectives.
What most people don’t realise is that a start-up company could seek the help of a venture capital firm to raise funding for their business, while another entrepreneur could seek the services of currency exchange firm to move funds to expedite the service delivery to their customers. To survive and get ahead entrepreneurs need to explore other avenues and reinvent themselves.
One thing that I have seen is that the advent of these technologies have ultimately put pressure onto existing traditional financial sectors and spearheaded the adoption of some of these latest technologies innovations for some while others have adjusted to incorporate the fourth industrial innovations into their operations; such as blockchain technology, artificial intelligence, machine learning and many more.
Despite this reality is that customers have embraced a new normal, or a new and improved way of doing things especially when novel technologies have been introduced, and in other times, customers needs around existing or introduced innovations.
Both traditional banks and custodian banks offer services that will often work in tandem. The main difference with custodian banks is the ability to provide the holding and safekeeping of assets including digital assets or crypto-assets.
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