There’s little traditional banks can do against the tide of their Web3 counterparts. Their efforts to embed a consumer-focused culture, one in which they consider, identify, and discuss customers’ needs, remain equivocal. In some jurisdictions, they have become known for a lack of focus on the very people that gave rise to their existence. There is little concern for customer emergencies, especially in cases involving products like joint accounts, when one signatory becomes incapacitated.
What’s more, their financial performance is increasingly concerning. A recent analysis of country-by-country data for EU banks revealed a sizable risk of underperformance, with a very limited number of high-performing financial institutions and a large number of poorly performing ones. Both the jurisdiction-level gap and bank-level gap are important reasons for the low performance. Some banks were found to require performance improvement relative to other banks, while others needed to enhance their performance within specific jurisdictions.
Credit Booms End Poorly For Banks
An article published in the Review of Financial Studies demonstrated that the common stock of US banks whose loan growth was in the bottom quartile of banks significantly outperformed the stock of those in the top quartile. An analysis of publicly listed American banks (1972-2014) reveals that credit booms tend to end poorly and are succeeded by lackluster financial performance.
The extended period of empirical analysis demonstrates that the phenomenon is persistent rather than being an outcome of changes in bank governance or regulations. In simpler terms, loans from rapidly growing banks tend to perform worse than those from other banks, and neither equity analysts nor investors anticipate this poor performance despite it being a long-standing trend.
According to theories of credit booms, investors and banks fail to fully account for loan risks during periods of accelerated growth in loan books. Unfeasible loans are just one example of traditional banks’ shortcomings. A strong and intuitive crypto platform with reliable services and returns will outperform a traditional bank.
XBO.com has developed a web-based and mobile platform to help make cryptocurrencies universally accessible. The platform addresses issues commonly encountered by traders and investors, drawing from its team’s experience in the area. XBO.com crypto exchange offers a reliable and intuitive gateway into digital assets filled with opportunities.
Unwarranted Bias Is Giving Way To Mainstream Acceptance And Adoption
Associations of crypto platforms with scams, high risks, losses, and speculative trading continue to linger, partly because all of those were admittedly a fact in the early years of crypto. The digital asset market is maturing and shifting from sky-high, unsustainable returns to moderate but guaranteed benefits for users. Key events reflect this process, including US President Donald Trump’s support for the industry and his plans for a Crypto Strategic Reserve, which would be a game changer.
The prospect of a reserve is a significant milestone in his plan to establish the US as the world’s crypto capital, which was one of his election promises. Digital assets will become a more common investment, and this step is part of a monumental shift that will ultimately encourage more institutions to transact in cryptocurrency as well. Such a shift will bring broader acceptance of crypto, according to Jeffrey Neuburger of Proskauer Law Firm. He believes allowing more US financial institutions to hold digital assets will lead to their enhanced integration in mainstream financial channels, and crypto will become a common investment asset, just like gold or securities.
Crypto Is For Everyone
XBO.com combines bank-grade security with the empowerment of individual customers through Web3. Its core belief—that crypto was made for everyone—reflects its commitment to democratizing access to the Web3 ecosystem. The platform is highly intuitive and is based on core values such as security, inclusivity, trust, simplicity, and compliance. Its founders, who come from the trading, tech, and fintech sectors, recognized the need for a secure, user-friendly, and rewards-driven exchange that both retail and institutional investors can access with ease.
XBO.com combines lifestyle rewards with a premium trading system and a fusion of intuitive tools and serious functionality. Users will soon be able to trade, earn perks, level up, and access real-world benefits through the platform’s loyalty program with a virtual debit card and the XBO token. The platform offers secure, fast, and seamless integration of crypto payments and infrastructure for platforms and fintechs via CryptoPayX and other crypto solutions for businesses.
Why Web3 Platforms Outperform Banks
Well-designed Web3 platforms outperform banks by offering increased efficiency, transparency, and accessibility through DeFi and blockchain technology. They utilize smart contracts to reduce transaction costs and facilitate peer-to-peer transactions without intermediaries, potentially revolutionizing the world of finance.
Decentralized lending platforms and stablecoins play a crucial role in providing financial services to the underbanked. Stablecoins, which are pegged to a fiat currency like the US dollar, offer a reliable and secure alternative to other cryptocurrencies, given the latter’s occasional volatility. This makes them a viable option for residents of countries with inflationary economies or unstable currencies. Stablecoins can be nothing short of a lifeline for individuals seeking to protect their funds and participate in the global economy.
Decentralized lending platforms enable access to loans without a credit score or a conventional bank account, presenting a new opportunity for financial empowerment and growth. However, Web3’s true potential to democratize finance lies in its ability to offer trustless financial tools and programmable liquidity. Its decentralized protocols circumvent traditional gatekeepers and offer financial services that are not constrained by legacy banking infrastructure or even geographic borders.
Users of Web3 platforms can move away from outdated payment processing and use incentive-based technology, which means no longer having to trust third parties to carry out transactions. The inadequate performance of banks and their lack of focus on customers have set a bar that’s effortless for well-built Web3 platforms to overcome.
