Almost seven (68%) out of ten Brazilians consider changing their bank to an institution with more consistent and efficient service, reveals a study carried out by Infobip, a global communication platform in the cloud, in partnership with the consultancy Frost & Sullivan.
The survey “Customer experience in the financial sector” was carried out with the objective of understanding how the process of digitalization of communication has transformed the decision-making process of clients in the financial market.
Overall, six out of ten customers would switch to a bank that offers a more seamless interaction experience. Consumers are fifteen times more likely to migrate from a bank because they do not believe in their institutions’ credit granting protocols.
Knowing this, Cointimes prepared an article exemplifying 5 situations in which you will not need a bank to solve your financial problems.
5 examples of what the Defi market can do
DeFi comes from English, decentralized finance, or in good Portuguese, decentralized finance. The idea is to provide financial services, until then restricted to large financial institutions, to anyone, without having to ask for permission from banks, in a transparent manner and 24 hours a day.
With these innovations, it may no longer be necessary to deal with bank service dissatisfaction and denial of service.
Can you imagine financing the car without having to queue at the bank or look at the manager’s ugly face? These first Defi protocols that we are going to introduce allow you to get a loan with all the security of blockchain technology.
AAVE and Compound are well-known decentralized financial projects that focus on cryptocurrency lending. Every trade is registered in a smart contract in the Ethereum blockchain, and it only runs when all agreed conditions are met.
Aave and Compound create liquidity pools, which are nothing more than the surplus agents in a common financial system, that is, people who have stagnant money and want to lend to someone earning interest as a reward. In this way, these protocols obtain funds to operationalize loans.
read more: Focusing on institutional loans, AAVE debuts Aave Pro
Decentralized Brokerage – DEXs
Decentralized brokers, DEXs, developed at Ethereum, offer investors a transparent and blockchain-based trading system, with less identification requirements (KYC), but with much more stable pricing, better experience and user interface (UX/UI ) and a much less frustrating trading experience.
Part of this was done through the use of shared liquidity pools and algorithmic pricing models. Uniswap, SushiSwap, Curve and 0x total more than 90% of all DEX traded volume.
Read more: It’s a myth that only the rich have enough to invest in bitcoin
For the nascent and pulsating market of cryptocurrencies, in which it is recommended that the individual will be his own bank and, therefore, will bear all the decisions and mistakes made, there is, of course, no Credit Guarantee Fund.
But the DeFi market, which concentrates the largest volumes of trading and innovation in the cryptoactives market, tried to get ahead and create two innovative businesses to meet this demand.
Nexus Mutual is a decentralized insurance protocol built on Ethereum that currently provides coverage for blockchain smart contracts.
Nexus Mutual includes smart contract failure coverage, which protects against potential bugs in the executed code and financial losses that can be incurred due to hacks or exploits in smart contract code.
After a failure in the smart contract, a Claims Assessment process will be carried out which will be evaluated by the Claims Assessors. Once approved, the Coverage Amount will be paid to the insured.
Read more: NYDIG Partners to Bring Bitcoin to the Insurance Industry, a $6 Trillion Market
Maker Protocol (MKR) is a decentralized application that operates on the Ethereum blockchain. Managed by the community itself, the protocol allows for the granting and taking of loans through stablecoin backed by dollar DAI (DAI).
With one shot, protocol hit two holes. It allows loans in DAI and also backs the token in dollars, the dominant currency in the traditional financial system. Commonly used by investors who want to protect themselves from the volatility of cryptocurrencies.
Read more: How can you take advantage of the falling dollar to diversify your crypto investments?
A derivative is a financial contract between two or more parties based on the future price of an underlying asset. Derivatives are generally used to hedge risks or to speculate on the price of the underlying asset in case of changes.
Synthetix is an Ethereum-based protocol that opens up huge possibilities for the trillion-dollar derivatives market, but using decentralized finance or DeFi. It was released in 2017 under the name Havven (HAV), but after a year it was renamed to Synthetix
Read more: Bitcoin: The Derivatives Bomb
According to Caio Borges, head of sales at Infobip in Brazil, “The financial institution that manages to offer a better experience for the younger customer here in Brazil, will probably have more possibility of retaining them in the long term, when their purchasing power is greater” .
However, if banks continue to leave customers unhappy, DEFI protocols can absorb more than 68% of their customers.
But what is your opinion about the quality of banking services and blockchain alternatives? Leave a comment just below the post.