Technology is changing things a great deal. Most of us are already aware of this.

In the financial arena, FinTech long posed a threat to the banking system. This is where technology provides users similar offerings to what the bank had, yet in a more efficient and less costly manner.

For the West, the process was a bit slow. While FinTech made huge strides in the last 15 years or so, the age of the population caused a slowdown. FinTech requires people to be technologically proficient. This caused much if the West to operate in a similar manner as they did before. That is, of course, changing as the number of young people are growing coupled with the decline in the older generations.

One country that did not face this problem is Nigeria. It has a young, technologically advancement population. These people were introduced to the world of the Internet via the smartphone. This enabled them to instantly join the "app-world" which led to FinTech becoming very popular there. Naturally, this is poses a major problem for the banks.

These banking platforms are attractive to millennials and other tech-literate customers and require little or no physical banking presence. The obvious advantage they have over conventional commercial banks is low cost.

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Here we see what is expected to be an ongoing wave of disruption across the world of finance. The banking and financial system are going to see a lot of changes, many which they are not going to like.

The Threat Of Cryptocurrency

Cryptocurrency received a lot of attention because of the speculative nature of things. The price action gets people interested. This is aided by the mainstream media promoting what is taking place with Bitcoin and Ethereum.

What is rarely mentioned is the disruptive nature of cryptocurrency due to the fact that it is able to engage in transactions outside the traditional system. No bank is required to transfer value from Point A to Point B. At the same time, a digital wallet serves the purpose of letting on send, receive, and store money.

This poses a major problem because people can operate outside the fiat monetary system. That is the stranglehold the banking system has. As people get more comfortable operating in cryptocurrency then we will only see this grow.

Cryptocurrency is a threat because it enables for different economies to form. As communities are tokenized, they have the ability to operate as their own economies. This is a place where the bank are not needed. Hence, they are shut out of what eventually will be the equivalent of trillions of dollars of economic activity.

That would certainly hurt the bottom line.

The Threat Of DeFi

Decentralized Finance (DeFi) is a major hit to the banking and financial sectors. We are seeing Wall Street being attacked at its very own game.

We can say that DeFi is going after "the rest" in the title.

Here we see a brank new, clean sheet financial system being erected. Again, with so much money starting to float around in cryptocurrency, it only stands to reason that we would develop more advanced financial applications. This is exactly what is taking place.

In fact, we see a blending of the old with the new. Wall Street has pondered what it would be like to move the equities markets to exchanges. They do not have to really worry about that. The blockchain industry is already doing that for them.

Synthetic Assets are already becoming very popular among traders. The ability to trade the likes of Apple, Tesla, and even SpaceX is appealing to people. While having access directly to the company is not possible, creating something that is tradeable is. While there is no claim to ownership, nor the income the company generates, synthetic assets allow people to speculate upon the price action. This is what traders and long-term investors want to do.

Does it really matter whether one is dealing with the "original" asset class? As long as the liquidity is there, which comes from volume, people will utilize that just like they do the shares listed on exchanges. The difference is people can buy them with their cryptocurrency.

The amount of money that is flowing into the DeFi space keeps growing. At the same time, the industry itself is expanding on a daily basis. Each day there are millions of dollars in payouts that are going into people's wallets. Most of this money is remaining within the DeFi world, being staked so that it grows.

As the offerings expand, we can foresee how this is going to unfold. The idea that it is going to get smaller is not feasible. That horse already left the barn as they say.

From The Nigerian Banks To Bank Of America

The difficulty that is facing the Nigerian banks affects all depositing banks around the world. Bank of America only differs from those in size. The challenge is mirrored.

As more money is "moved" into the world of cryptocurrency, this takes more away from them. Banks depends upon interest earned on loans or interest bearing assets as well as fees to survive. If the amount of deposits drops a great deal, there is a lot less money to lend.

This will naturally eat into bank profits which will force consolidation across the industry. Over time, we will see it getting smaller, similar to how the revenue generated by physical retail is declining in the face of online commerce.

Often, the best way to harm a corrupt system is simply to opt out. This is now becoming a possibility due to cryptocurrency and the resulting construction of DeFi. With these expanding on a daily basis, billions of people have another alternative. Instead of dealing with a system that charges onerous fees to move money around, as well as being slow, people can simply say "No Mas". They can simply turn around and leave.

Through the process, they will first harm the Nigerian Banks, then take out the rest.

The process is already underway.

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