Fintech needs better innovation than the blockchain

It’s very hard to argue that there has been a better innovation in the fintech industry than blockchain in the last decade. This small but powerful technology has completely changed the understanding of money for many people. However, it is not the perfect innovation that the fintech world was looking for, nor did it ask for it.

Sure we may say that the current demand for cryptocurrencies is what justifies the implementation of the blockchain, but it really doesn’t. Cryptocurrencies don’t really provide value in a way that we were anticipating it to do in a fintech standpoint. Sure it allows for some purchases here and there, but in most cases, the user always regrets spending their Bitcoin, and that’s not something innovation should stand for.

Furthermore, cryptocurrencies are nothing more than a financial asset, an investment tool rather than a medium of exchange. There is always some kind of change in Bitcoin price as well as volume, but there are no immediate improvements to the general financial landscape of the world. 

But let’s distance ourselves from cryptocurrencies in this article and focus on the blockchain as a whole and its current role in both retail and institutional finances.

Blockchain is controversial

How could an innovation call itself positive when half of the world’s governments are severely against its implementation? How could an innovation call itself positive when a significant portion of its use is dedicated to universally illegal activities? 

These are the questions that many fintech experts are asking each other when recognizing blockchain as the next best thing since sliced bread. Sure it helps with faster and more secure transactions, but is that a price big enough to pay for all the issues it may cause? Many people think that no, it’s too steep of a price. Unfortunately, those people tend to be senators, famous politicians or economists and influencers as well.

Even when we bring cryptocurrencies into the equation there is very little value that can be found in them. And when we consider the blockchain technology on its own as a “useful” feature there is not too much to talk about. 

The technology itself was just a facilitator for slightly more secure P2P transactions that then turned into enterprises. Now every single transaction over a service provider is documented and reported to a local financial authority. 

It’s basically the use of money with extra steps of converting it into Bitcoin or other cryptos.

But what is that immediate innovation that fintech requires for further adoption? Well, exactly what blockchain does but without cryptos.

Fast transactions are the innovation of the century

No matter how we look at it, there is a huge demand for fast transactions in a modern and digital economy. However, this is not necessarily a demand for the consumer. It’s a demand for the producer.

You see, when we make the payment for our purchase, we don't have to wait until the seller receives this money, the order is placed immediately. Based on the product we may receive it immediately, or have to wait for it a few days due to delivery. 

The seller though has to wait until the payment is processed by banks and finally approved on their account. This sometimes proves to be a large issue in terms of logistics as the seller may receive so many orders at a given point that the savings he or she has prepared are not enough to act upon these orders. He or she does not have access to the funds paid by the customers because they’re pending by the bank.

With immediate transactions, the international business would be much faster and therefore much more accessible. 

We may say we have it now, but Bitcoin just simply doesn’t cut it as a currency.