Banks are, arguably, some of the most important institutions in the world. This is because they hold large amounts of money, including your savings, and allow for things like loans, mortgages, and more.
Traditionally, however, banks are somewhat cumbersome. Many times you need to fill out forms, go to your local branch for paperwork, give critical, personal information to others, and so on.
On the other hand, digital wallets are much easier to use. You generally have an account with funds or associated payment methods. Purchasing something is just a matter of logging into your digital wallet and confirming payment.
Even though no digital wallet offers the full services of a traditional bank, they’re a force to be reckoned with in the financial world. However, can banks offer the same simplicity and ease of use as digital wallets?
Banks Are Losing Relevance In A Digital World
Cryptocurrencies are at the forefront of financial news nowadays. This is in no small part thanks to their volatility, but anyone can see they’re long past a novelty, and they seem to be here to stay.
Many digital wallets jumped on the crypto bandwagon, offering not only cryptocurrency payments but also crypto trading. Why don’t banks offer such a feature yet? This is in part because a well-established business model is hard to change, and regulations prevent them from doing things differently.
Another example is depositing and withdrawing funds at an online casino. While bonuses and offers like a 32red promo are essential for standing out from the competition, online casinos also develop uniqueness by accepting a wide variety of payment methods. If you use a digital wallet to fund your account, it takes a few clicks and you’re done. If you prefer a bank transfer, it’ll probably take days and there’s always the risk of the bank not approving the transaction.
Today’s digital environment is highly dynamic, and many changes are happening every day. Fintechs are more able to adapt to these behaviour changes since they’re usually not as regulated as banks.
Some Things Banks Could Do
As we mentioned before, banks have more red tape than fintechs to do as they please. This is why changes are slow, and security is in its strictest form. This means banks would probably start accepting cryptocurrencies once they’re officially regulated, such as what might happen with CBDCs.
In the meantime, one wonders why banks can’t at least offer their own digital-wallet-like service, where you’re allowed to pay for something by simply logging in and confirming the purchase. Sure, there are bank apps but they still rely on traditional banking.
Banks are in a unique position to create a super-wallet since they are authorised to offer much more than your run-of-the-mill digital wallet. It would be incredible to have a digital wallet to not only pay but also take a loan, or many of the other services that banks offer non-digitally.
Since they’re partnered with some of the most important companies worldwide, it’s anyone’s guess why they don’t take more advantage of it. Sure, you have an occasional discount here and there, but that’s it. They could integrate accounts so you can, for instance, purchase a car from the bank’s partner more easily.
Digital Wallets Are Handicapped
Some of the previous examples are non-issues with most digital wallets. You want something, you buy it. Funds flow from your wallet to the seller, and that’s basically it. However, there’s little more than that. For instance, few of them can emit cards, and they can’t create money by investing yours.
Since digital wallets aren’t in the same category as banks, they can’t offer many services banks do. This is why they won’t ever replace banks. To do so, they would need to become one.
However, in a highly-connected world, digital wallets understand the importance of offering a plethora of services and, above all, convenience. Hopefully, banks will eventually catch up and make our lives easier in the digital realm.
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