Traditional easily changed. On the other hand, maintaining

Traditional financial markets are facing challenges on an unprecedented scale. Most are overly
regulated and too complicated to adapt to new technologies quickly enough. Furthermore,
existing giants have no incentive to adopt new and – in their eyes – unproven technologies. To
them the potential gain appears marginal at best, while the level of uncertainty and the
investments required are substantial.
The result? More cost effective and efficient ways to deliver everyday services to every corner
of the world are slow to arrive, if they arrive at all.
What’s most striking, and regrettable, is that nowhere in this decision making process are the
needs of users considered. Traditional financial market players prioritise only their own
potential risks and gains.
1.1 Financial Markets
The traditional chain of financial service providers consists of a high number of
intermediaries. Every middleman has its own cost structures, which means they each charge
commissions in return for providing the services required.
These corporations have been using the same operating principles for years. There are two
reasons for this. On the one hand, the scale and scope of these operations means they are not
easily changed. On the other hand, maintaining the same traditional business models is
convenient for these players. Well-established financial corporations use their market
dominance to ensure their expensive and ineffective operations continue unchallenged. And
it’s usually their customers who pick up the tab.
Two major problems arise due to this lack of change:
• Firstly, important services become expensive for customers, for some user groups
prohibitively so.
• Secondly, a limited number of players dominate because it is very complicated for any
new business to enter the market and become an equal player in the ecosystem.
Combined, these two problems create a sort of lock-down in the sector. The offerings brought
by the traditional finance and banking industry fail to serve the needs of a significant part of
the population. However, new entrants who could meet these needs by challenging the status


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