A New Decentralized Model to Disrupt Traditional Banking
The financial landscape is changing… for the better!
Traditionally, if you wanted to get a loan, you would approach a bank or a credit card company to lend you the money. However, the challenge for these institutions is that it is difficult to innovate with speed so find it challenging to adapt to more modern and advanced ways. Consumers who want to borrow money have to go through a long and bureaucratic process that’s old-fashioned, slow and cumbersome.
It should be fast, easy and efficient to borrow the money.
The systems to borrow cash should also be accountable and user friendly, using technologically advanced systems that both the consumer and the lender can easily understand and transact with. Our belief is that most traditional banking institutions still use outdated processes instead of switching to more technologically modern systems that are efficient.
Not Addressing Market Demand
Traditional lenders tend to have tedious procedures that are usually manual or paper-based. Their processes take a long time and use a lot of capital. The arrival of online peer-to-peer networks has changed the game.
However, even this new platform has its own challenges. For instance, they haven’t been able to match lenders and borrowers in real-time as fast as they intended to, and they haven’t been able to match their costs efficiently.
Also, both traditional and Fintech P2P companies have not been able to be of service to customers who have a limited credit history. They have also not made many inroads with the approximately over 2 billion people that are currently unbanked.
BLOCKLOAN will overcome these challenges by using different sources and methods to get credit information for people who want to borrow from them. This will enable them to tap into a new market.
According to research, alternative lending institutions, such as P2P lending and online lending platforms are set to grow at a rate of more than 53% between 2017 and 2025. Over the next five years, it’s expected that a rise in lending will increase due to this digitized way of lending money, decentralized technology and the ability of third-world countries to access better lending systems.
In 2017, the demand for personal loans was US$13.9 billion. This industry is divided into many different categories. The bigger financial institutions command a lion share of traditional fiat-based loans. They have a strong financial position in the market as they embraced the idea of working together with Fintech companies to lend money to people. Up to now, no big company has yet emerged that’s willing to take advantage of crypto lending and smart contracts.
The traditional systems that banks use continue to evolve on a regular basis. When this happens, banks try to embrace technology and find more efficient ways of doing things. The result of this is faster transactions, cheaper service, and improved customer support. In our opinion, the next developments in the traditional banking sector will be as a result of demands in the market for more options, faster service, better prices and the use of blockchain technology.
Banking Platforms Through Blockchain
BLOCKLOAN will be an extraordinary platform with a marketplace concept of lending out money.
- Both old style and modern AI credit scoring methods
- Lending money to people worldwide
- Lending money against the crypto equity
- End-to-end loan initiation, matching, and management of the loan
- Partnering with different countries to reduce the chances of defaulting on loan repayments and to improve
- Being able to access your funds from anywhere in the world through the use of a crypto credit card.
- A unified loan fulfillment prototype where the risk for lenders is diversified
The technology that BLOCKLOAN is founded on is an entire suite of services that provides end-to-end loan management through smart contracts and decentralized ways of loan fulfilment.
Lodex is an already existing financial and banking platform that’s based in Australia. It already has 45,000 registered users. BLOCKLOAN will take advantage of this to penetrate the financial market, not just in Australia only but all over the world. Lodex has a lot of powerful tools and features that enable credit scoring, property assessment reports, and social scoring. Users can also use the platform to conduct reverse auctions. This allows banks and brokers to bid for loans or deposits.
The main reasons why a lot of users prefer to use this platform is because of the powerful credit management system and the exclusive client authentication/credit scoring tools, which they can take advantage of and use for the auction-style platform. This removes power from lenders and distributes it evenly between lenders and brokers, as they try to outbid each other to provide a client with the loan that the client wants.
End to End Loan Management
BLOCKLOAN will be founded on the Lodex platform, offering comprehensive banking services. It will make use of the entire suite of services that Lodex offers. This is from the initiation of the loan to its management to the end. This includes both fiat and crypto loans. The platform will be built in such a way that it’s uncertain about the source of funds and will have a flexible user interface that allows for various lending products to leverage the core crypto lending structure.
A Way to Rate Consumers
Also, both the customers and the lenders will be heavily dependent on a credit rating system. The information on this credit feedback will be based on a credit rating engine that’s impervious to both parties. The authentication of users and their credit rating will be based on information that has been obtained from external third-party sources and the user’s social scoring.
This is a much more powerful way to get the credit rating of a large user base. Users will be able to gain access to this information and share it with external parties where it will aide them. Also, a borrower will have the ability to apply to multiple lenders simultaneously just with a single loan request.
This is a new decentralized model focused on the user and decreasing costs and increasing efficiencies. Watch this space as we disrupt banking as we know it today.