Banking Without Banks
Banking without Banks
The concept of Banking without Banks is to provide as many of the financial services provided by banks, but through more direct, lightweight and transparent structures that eliminate most of the traditional costs of personal finance. Through Banking without Banks, individuals assume the role of lenders for attractive returns and borrowing costs are significantly reduced. Additionally the social impact of interest being paid to individuals, rather than to large banks, can't be overstated.
Banking without Banks "allows people to lend money directly to others, cutting out banks and other middlemen. Which means better interest rates for borrowers and higher returns for lenders. Described as eBay for loans, the P2P money exchanges work as follows: borrowers list loan details and a personal profile, and lenders bid on the loan. Lowest interest rates win. Lenders bid in increments and minimize their risk by bidding on numerous loans."
"Unlike eBay, which can connect buyers and sellers from around the world, peer to peer lending is generally bound by local financial regulations. Which means there’s ample room for national or regional versions."
http://www.springwise.com/financial_services/bankless_banking_update/
Examples
Civilised Money: CivilisedMoney’s goal is to make it easy “for people to invest, donate, lend, borrow and transact money with each other directly at fair and transparent rates” without the involvement of banks.
http://www.civilisedmoney.co.uk/
Zopa: "Zopa is a marketplace for money. Lenders get lovely returns, borrowers get low-cost loans and money becomes human again. At Zopa, people who have spare money lend it directly to people who want to borrow. There are no banks in the middle, no huge overheads and no sneaky fees, meaning everyone gets better rates."
"How it works:
- Lenders put money in
- Borrowers borrow money
- Everyone is happy"
http://uk.zopa.com/ZopaWeb/public/about-zopa/big-idea.html
CommunityLend: "CommunityLend is an Online Lending System where people can borrow money directly from individuals and institutions in a safe, structured and secure way. It is a unique lending service for Canadians. We bring an alternative to traditional lending. We are the facilitators of a lending community whose purpose is to give its members an alternative to a traditional financial services company."
Currency Fair: A P2P cuerrency exchange platform. "Currency exchange is a function that has long been dominated by banks with high international transfer fees, but a new Irish site hopes to change all that. CurrencyFair is a fully regulated online marketplace that lets ordinary people exchange currencies with other people anonymously, at rates typically available only to multinationals and market professionals.
Users of CurrencyFair can choose to exchange their currency on the spot, selecting from multiple competing market-beating rates, or they can offer up their own rate and wait for someone else to match it. Either way, the site works on the barter principle whereby an exchange is made only when it benefits both sides. In general, CurrencyFair says rates approach or even beat the Interbank Rate, which is the price financial institutions charge each other. All funds are received and paid out via Electronic Bank Transfer, so no physical notes are involved. Fourteen currencies are currently tradeable on the site, including the British Pound, the Euro, Krona, Zloty, and U.S., Canadian, Australian, New Zealand, Hong Kong and Singapore Dollars.
Middlemen have already taken a beating in so many areas at the hands of peer-to-peer sites — to the considerable benefit of consumers — so it’s no great surprise to see the same phenomenon come to currency exchange."
Holvi: "Holvi aims to give small teams a better understanding of how their money is spent and received. Users can create a budget for their activities and see a graphical report of everything happening in real time, for instance. They can also build income by selling tickets and t-shirts, for example, and then see their bookkeeping updated in real time. Expense claims can be received, fully tagged and categorized, and photos of receipts can even be uploaded directly to the site. Meanwhile, users can pay bills as they would with any internet bank; every payment is tagged and automatically updated to their budget reports.
http://www.springwise.com/financial_services/holvi/
Bitcoin Ecology
As a result of the creation of a P2P currency like Bitcoin, a complementary sector dedicated to attend to the different needs of Bitcoin users emerged. Some of the most popular of these services are:
- MtGox: Bank-like Bicoin - conventional currency exchange https://mtgox.com/
- Tradehill: Bank-like Bicoin - conventional currency exchange https://Tradehill.com/
- CryptoXChange: Bank-like Bicoin - conventional currency exchange https://cryptoxchange/
- BitInstant: Facilitator for fund transitioning between the ordinary banking system and the Bitcoin protocol https://www.bitinstant.com/