The sharing economy, a concept promoted by the rapid successes of companies like Airbnb and Uber, has been widely praised and covered in various economic and business journals over the last five years. It has experienced a significant growth across many industries, with projections ranging its revenues from $110 to $530 billion globally by 2025. It remains to be seen why the financial services industry hasn’t witnessed this wave of disruption yet. As blockchain technology and decentralized systems further develop, P2P businesses will mark a new beginning for this industry.

Breaking the barriers

When thinking about which direction the world is taking, and what global trends are pushing the society forward, technology almost always comes to mind first. It has been an incredible enabler and multiplier, allowing universal access to various information, and empowering millions of people to connect via the internet and smartphones. The widespread adoption of technology and digitization have become catalysts for the end of capitalism, which is making itself obsolete. Automation and sharing services are quickly replacing traditional production machinery, rendering the marginal cost of products and services close to zero.

Companies like Uber and Airbnb are perfect examples of the new paradigm shift, as I mentioned in my previous post. They have nearly perfected their customer’s user experience, with their users preferring to share products and services rather than own them. Decentralized business models initiated unprecedented collaboration among users, who now interact within a much larger network.

Case in point: cross-border money transfers

What does this mean for the financial services industry? How come it remained as one of the most centralized sectors, with legacy systems being in place for decades? Let’s look at cross-border money transfer industry, as it perfectly illustrates the level of centralization in financial services. Cross-border money transfers are inherently complex, with a high cost of capital, multiple regulatory environments, and are difficult to achieve scale.

As a result, legacy transfer networks, traditionally based on a centralized hub-and-spoke architecture built over 50 years ago, have managed to establish an entrenched position, preventing new competition. Their high fees, slow speeds, and opaque service come at a cost to all consumers and businesses who need to make such transfers. Instead of a closed and proprietary settlement infrastructure, technologies such as blockchain will allow multiple parties to engage in secure, and cost-effective transactions.

An open payment infrastructure for the world

Built on top of blockchain technology, rather than the edges of legacy settlement platforms, OKLink’s network supports money transfer companies including mobile wallets, remittance apps, cash pickup outlets and other forward-thinking businesses with cross-border settlement needs.

OKLink’s implementation of blockchain technology allows participants to complete a currency conversion and transfer in a fraction of the time and the cost it would take in the traditional banking landscape. In addition, the transactions recorded inside the blockchain are immutable. Once they are created and confirmed, they cannot be altered nor removed from the network, resulting in high security and transparency.

More on how OKLink is changing the world of payments in my next post…

Jovan is a Business Developer at OKLink, a global blockchain settlement network helping forward-thinking businesses make cross-border money transfers. We are growing rapidly with a settlement network being connected globally with over 150 licensed nodes from more than 40 countries. To become a partner in our network, contact us at [email protected]