Bank is a licensed financial institution with the main function to receive deposits and provide loans. Is that all? In financial system, bank performs as a key component. Besides performing the economic function, they also provide other specialized financial services. Take for example wealth management, safe deposit box and currency exchange.
According to Federal Deposit Insurance Corporation data, about 7% of households in US are unbanked and 9% of them are underbanked. Seeing how important role that the bank plays, does it make sense? Do people really hate this financial institution or is there something suspicious hidden behind the curtain?
Unbanked people are those who do not have account at the financial institution. Their names are not listed as a bank customer. While underbanked are defined as those who own saving or checking account but can’t easily reach other financial services and products. Is there anyone to blame? Why this is possible when banks often release interesting promotion contents about their services? They offer special rewards to both new and existing customers with expensive goods like cars, cash and gold bars.
Reasons people do not go to bank
Many people prefer to look for alternative resources, instead of the bank, when they need cash. Take for example cash checking, payday lenders, money orders and pawn shops. There are reasons why they do not fill up for an account or loan application at the mainstream financial institution, including:
- Distrust and non-transparency
People should be able to go to a bank to save their money or take a loan. But sometimes, the banking staff does not serve the customers well in both saving and loan management. The non-transparency in costing also becomes a reason why many people prefer to close their bank account. - Lack of literacy
There are many terms in banking industry that the customers are not familiar about. They can’t understand how the bank works, the rates and the advantages of having an account. Besides the strange terms, many bank staff can’t speak multi languages and disable to assist customers who do not speak or read English well. - Jobless
People can still open a bank account although they do not have job or just lost their main income resource. However, the less amount of money to earn usually affects the frequency of financial transactions. People do not think that they should go to the bank again, although they can actually get the benefit of an account maintenance service. - Inconvenience
In today’s world, where everything needs to be done as quickly as possible, people put more focus on efficiency. They do not want to waste money, time and energy. It is better to look for more accessible alternatives. Many people say that they can’t easily find bank branches near their place to visit regularly. The limited operating hours also make workers uneasy to catch the time. - Already blacklisted
To open a bank account or apply for a loan, customers have to pass the background check. Unfortunately, they may have already been blacklisted because of the bad credit history. - Not many options
It may seem like to be discrimination, but the bank system can’t provide more services to customers who only have less money. They have no access to certain accounts which needs high maintained balance.
Those reasons above are classical problems. Unfortunately, people can’t hope too much that the current financial system will change. In fact, they still need a reliable platform maintain their money.
Kara Network comes as a smart and modern solution. This project provides inclusive solutions to deal with the current problems in the conventional financial system. Anyone, no exception towards unbanked and underbanked people, connected within the network can utilize the service to easily access their funds even without internet connection or Smartphone.
More Info :
Website: https://kora.network/
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