In today’s world, the sophistication adopted by the banks in granting funds and providing credits has increased as compared to the past. Due to the pandemic outrage, the allocation of funds and grants have already become more complex and difficult for local small businesses. Under these circumstances, the problems of the local communities and small business owners can’t be fulfilled by the large traditional banks who are bound to follow strict frameworks and evaluate the credit histories and profiles of the debtors. That explains why the presence of community-powered banking is necessary for boosting the economic growth of local businesses in small communities.
In a nutshell, community banking attends to the needs of a local community by emphasizing the personal relationship with the customer. Most of these banks aren’t publicly traded so almost every decision made is finalized by carefully assessing the interest of the shareholders, employees and the local community. That’s why the decision making management of the community-powered banks often makes personal interactions with the business owners and leaders to whom money is lent. As this process is not similar to the standard procedure opted by the large traditional banks and is dependent on interpersonal relationships with the customers, the decision making is quite fast as compared to other banks. Consequently, as endorsed by Jamie Dimon, JPMorgan Chase chief executive, community banks end up providing very specialized banking services to their communities.
Following the technological advancements, globalization and digitalization have been on the rise for a couple of years now. Due to the emergence of the global pandemic, the trends of remote work and digitalization have gained substantial popularity. Under these circumstances, traditional community banking, not famous for being tech-savvy, has to adopt the latest technology and accept the shift to globalization in order to serve communities more effectively than before. Consequently, the community-powered banks, restricted to the fund generation from limited local lenders, can now open up doors of investments from all over the globe by connecting local business owners with investors all over the globe.
Additionally, by evolving the model towards digitalization, community-powered banking enabling globalization can further save on the resources otherwise consumed on maintaining and building the branch’s infrastructure. Apart from that, the community-powered banks can also evolve their day to day activities and contribute towards universal banking by modifying their model.
In the crypto space, one fine example of this is EQIBank partnering with a community-powered global banking service called EQIFI. Spread over 180 countries, EQIBank aims to utilize blockchain technology and democratize financial products via EQIFI. Now, because of the launch of EQIFI, the DeFi alternative will be available globally to the users who didn’t use to have access to similar facilities in the past.
By utilizing the decentralized protocols, EQIFI will be globally offering services such as pooled lending, borrowing and investing for ethereum based tokens such as wrapped Bitcoin, stablecoins such as Tether and a handful of fiat currencies including US dollar, British Pound, etc. Moreover, the platform offering DeFi products will provide users with the opportunity to apply for EQIBank bank accounts and services such as loans, credit or debit cards and wealth management. Anyone holding 800,000 or more EQIFI tokens, known as EQX, can propose changes in the ecosystem such as listing or delisting a certain crypto asset, adjusting interest rates and collateral limits, etc. If the majority of the community governing the platform votes in favour of the change, it’ll be implemented in the next three days.
The traditional community banking not open to the adoption of the latest technology is missing out on the opportunity to help local communities on a solid large scale. By integrating blockchain and joining the borderless ecosystem, platforms such as EQIFI, with the creation of innovative community-powered global banking, are making the future by providing both, modern finance and DeFi, to underprivileged customers who otherwise had very limited exposure to financial products and services. Now, local businesses can have more options and accessibility to modern financial tools and funds.