Few years down the line we might see the whole banking and financial sector powered by blockchain technology. Many banks and financial institutions in the Western and Asian regions are already invested in it. They are working on integrating the decentralized distributed ledger technology into their everyday operations.
While the Western institutions are trying to fit Bitcoin technology to suit the needs of a developed economy, Asian banking, and fintech institutions are working on creating/modifying the blockchain technology to suit the needs of developing and emerging economies. But there are places which do not fall into either of these two categories. Most of the African economy is still cash dependent and it also houses a considerable number of unbanked and underbanked population. Bitcoin has so far been projected as the magic bullet which can solve the problems faced by this population.
Even though a few bitcoin-based financial startups have shown some promising results, solving the large scale problem in the region using just bitcoin is still a long shot. However, regular financial services using Bitcoin technology may have better results. African banks and financial institutions seem to have realized it now. And by drawing inspiration from their Western and Asian counterparts, they have started to focus on blockchain technology for their banking operations.
Barclays Rise Enters Africa
Making this process easier is Barclays, the global banking, and financial institution. Apart from being one of the well-known names in the banking and finance circles, Barclays is also known for its leaning towards innovation in the fintech sector. The African subsidiary of the banking conglomerate, Barclays Africa is staying true to its parent company’s DNA by introducing Rise – the fintech innovation and acceleration program in the region. The first cohort of Barclays Accelerator as part of its Rise program is set by the end of next month in Cape Town, South Africa. Here fintech startups in the region are offered mentorship to help them create products that address various opportunities presented by the vast fintech sector in the region.
Africa is the testing ground for fintech products. The success of Mpesa in Kenya and even BitPesa’s promising stint in the region stands as an example of how innovative products and ideas positioned right can not only succeed but also empower people in the region. Banking solutions based on Bitcoin technology has a huge potential in the region where about 80 percent of the population is unbanked. Combining the tech powering bitcoin with standard banking and financial services, banks can offer widely accepted services in a flexible and simple way so far reserved only to cryptocurrencies.
Banks Can Improve Their Service with Blockchain Technology
Banks can also cut down their operation costs and pass the benefits to customers. In countries where banking services are expensive, this can come as a huge relief. Also, foreign remittance plays an important role in African economies and with blockchain technology, banks can enable faster and inexpensive fund transfer options. Similarly, electronic payments can also get a boost with these improvements.
If banks and financial institutions manage to implement blockchain technology effectively, they may even end up replacing established services like Mpesa in no time.