Core Business or Irony?
Although Banking Business has been centuries old affair and there has been many pioneers who later became billionaires by introducing fascinating Innovations, Technology & Services in this world. Yet, today we are seeing innumerable banks fail to serve primary purpose of Banking Business. By literally taking the meaning of the word ‘Banking’ from crude perspective is to be able ‘park money safely’ with trustworthy organisation which is much more reliable than keeping money at home locker, more over that, exact motto of opening an ‘Saving Bank Account’ in any Bank.
Economists and Bankers eyed the parked money is ‘opportunity cost’ so it could get ‘interest’ and they started trading off your money parked. In the recent debacles of YES Bank & PMC Bank in India depositors were refrained from withdrawing the same money. Because to simply put it this way, the money parked with an intention to save, had gone wrong hands. A Basic thought that arises in this scenario, why was the money that was parked to account with the motive to ‘save’ was lent to borrowers are first place, because depositor had no intention making an investment. Had you any such intention, might have had bought high returns products of Bank.
Down the lane, Banking has become a luring Business. Lure to the extent, people fall for it! Where they conveniently lured you over tiny piece of interest, Banks bets your money to profits. Later, when it goes down, depositors are not even in position to get the money parked, or just wanted to saved! Depositors try every luck Crying and yelling, you bet, no person listens to you, right from Bankers to Government. Also, in the centre of whole fiasco, regulatory authorities smartly hide their failures, because they failed to raise red flag at appropriate time.
If we look from a perspective, the reason depositors get lured off higher Interest rates is the core micro-economic reason, that’s to get an extra pie with which customer gets slightly better purchasing power and sadistic satisfaction that customer made comfortable extra pie. However with this customer also starts nurturing an habit of easy money and satisfaction. In this game of extra pie, it is evident that customer don’t become rich, but there is someone who keep getting richer, that’s Bank! .
Bingo! That’s why, bank advertisements are ‘Interest Returns’ centric, like ‘why take 4, when you can get 6’, . Recently, to improve the image some Banks started showing emotional ads, like ‘rishto ki Jama, punji’. Banks branches are filled with such billboards, but when it comes to serving clients, customer gets to know that all the sentiments, that they see on ads and on billboards are just thin layer of make-up to look good. Actual reality that they face is irritated bank employee serving customers, where every now and then pounder to go on strike stating heavy work overload or pay hikes and shut the operations of branch. In the entire course, people completely forget the services that they are supposed to get, because they have to get on to work and every damn bank has same stories. If they go some private sector bank, services may differ, but again the problems are of reliability, taking a step further a global bank are serious only when it comes fat rich clients. Recently surveys shows that banks have spared nobody, right from poor to rich, everyone has faced troubles in Banking services.
Again the most important concerns of ‘Parking Money Safely’ remains unsolved. Probably it is the biggest Ignored problem of today. Recently, Indian Government pushed all its citizens to go digital. In fact government went ahead to frame charges against the people who are found with cash more than a limit at home. After the announcement came through and step were taken, 2 banks fell flat stopping payment to it depositors and landing them in jeopardy.
So where do we park the money now? What options we are left with? What is future of Banking?
Speaking of choices, recent years have given rise to cryptocurrency markets. There have been lot of negative and positive news coming from both the sides. However what twinkled my thoughts, is all the negative of Banking systems are infact positives of Cryptocurrencies. Before I make any comments ahead, I would make a disclaimer, neither I am cryptocurrency lover, nor I have any exchange, or my motive is to sell you cryptocurrency, or have any investment in any cryptocurrencies.
Cryptocurrency is global currency, democratic in nature having no boundaries. Best part of it is its decentralised and takes off the risk of one entity being able to make off with your funds. It is easy to use unlike banks, where you are compelled to visit bank to open an account or even if open account online or app, they make you visit, branch for naive things latter.
Other good takes in Crypto side is being Internationally acceptable cost of transactions is low compared to Banks. Further it is more safe, highly secured and anonymity can be maintained during transactions. In recent Judgment by Supreme Court, also has allowed Cryptocurrencies to operate and stated it legal.
Also, there are many negatives in crypto also. However, the larger question stays in front of us is, “Whether the Bank Services will Improve or Customer will start looking towards alternatives like Cryptocurrency for Future”?