Why to Abandon Traditional Financial Services for International Money Transfers


There is plenty of ads and mentions of new financial services on the Internet. They all sound compelling, but how often do people want to try new money-related services? There should be reasons to switch from what is well-known to trust some new provider. Here, we at Wittix consider why it is worth abandoning traditional financial services. We counted five disadvantages of the old system. Let’s go!

Online fintech platforms are modern. Developers think of convenience, speed of money transfers, and demanding clients’ tasks. The new services are more flexible than the old systems. Due to the possibility of creators accepting feedback, they can add new features. Thus, clients get instant chat support, email responses, and in-app help on demand.

But, the old systems are machines running for decades or even centuries. For example, the start of the Bank of Sweden, renowned as Sveriges Riksbank, took place in 1668. This establishment is widely acknowledged as the world’s inaugural central bank. It takes work to change processes in such institutions. But they are still delivering services and getting full respect from loyal clients. That is why the latter stay in their banks even if some slight minuses exist. 

This article is for working businesses, startups, and everyone interested in the options. Wittix has prepared the five reasons to consider dropping traditional banking services. Remind them when sending money abroad the next time and pick a better choice!

1. Inefficient Customer Support

The efficiency of customer support impacts our financial experiences. It is especially true when dealing with business tasks and international transactions. It is a blame to put on traditional financial institutions; they are not client-oriented. They often grapple with inefficient customer support processes and delays for individuals. It is frustrating for them to open accounts, receive updates, or resolve issues across different countries. 

For instance, opening a bank account in person in the United States can take 30 minutes to several hours. The task will take up to a week to proceed with an online application. Across the ocean, in the United Kingdom, opening a bank account lasts for two weeks, including identity verification checks. No option to say, “Send money fast, today, or even tomorrow,” if the one is a newcomer.

Another issue; customers may not receive real-time notifications. Sending money, one would like to know about their transactions’ progress or when it is received. These mysteries do not help in dealing with time-sensitive transactions.

The rise of financial technology solutions revolutionized how we handle international money transfers. They offer experiences with real-time tracking, instant notifications, and responsive customer support. The knowledge makes us confident and secure to communicate with partners and acquire clients.

2. Lack of Transparency

The lack of transparency is a significant concern that demands attention. Partially, it is about the previous point but goes further. The presence of concealed fees and charges is disconcerting in traditional banks. No one likes discovering that their final transaction amount deviates from the initial one. Still, it happens due to undisclosed intermediary fees and covert currency conversion costs. 

Some hidden charges may also be there. International money transfers may involve intermediary banks known as correspondent banks. However, traditional banks may not divulge the identities of these correspondent banks. It leads to confusion and a lack of transparency in understanding the transaction’s journey. It is frustrating. It becomes difficult to accurately predict the total cost of sending money abroad. With fintech services, things are different. In Wittix, business clients get their plans and cost information. Besides, in case of questions, the customer support line is open and ready to answer all the questions. 

3. Location restrictions

Traditional banks predominantly rely on physical branches. That means their services are inaccessible to those living in remote or underserved areas. Some banks serve clients who can visit it. Thus, people residing in rural regions with limited infrastructure may face challenges. It is a demanding task to access banking facilities. 

Many businesses go digital or deliver services remotely across the world. It is inconvenient to lean on geographical position when considering payment. This disparity exacerbates financial exclusion. It denies individuals the opportunity to participate fully in the modern economy.

Besides, the traditional 9-to-5 schedule aligns poorly with the lifestyle. Entrepreneurs need flexibility with extended or weekend hours. On the contrary, Fintech alternatives offer to send money abroad from home/office—thus, not leading to inconveniences and forcing customers to rearrange their schedules to meet banking needs. 

4. Limited Accessibility according to status

The following practices have historical and regulatory origins. Still, they often create barriers for individuals seeking to engage in financial activities. 

Citizenship Requirements: 

Some banks demand proof of citizenship. It serves as a prerequisite for opening accounts or accessing certain services. This practice alienates individuals who may be legal residents. But lack of citizenship status in a particular country makes the difference. As a result, non-citizens, such as expatriates, immigrants, and students, encounter difficulties. Securing fundamental banking services is not possible for them.

Residency Obligations

Banks may impose strict residency requirements. They may deny individuals who don’t meet those criteria access to financial services. This approach disregards a society to maintain connections and finances in many countries.

Documentation Challenges

Banks mandate specific documentation. The latter varies depending on a particular region, presenting challenges of paperwork. It impacts migrants and refugees with limited documentation due to circumstances beyond their control.

Financial Exclusion

Due to the above reasons, some people can not access critical banking services. This exclusion can hinder their ability to establish credit histories, save for the future, or invest in education and entrepreneurship. 

Fintech’s influence is creating a new paradigm that embraces inclusivity. It empowers individuals across the globe to access financial services without arbitrary restrictions.

5. Slow Transaction Speeds

Last but not least, the speed. Technological advancements revolutionized various industries, but not traditional banking transactions. 

Interbank Delays

The multi-step process involved in interbank transfers slows transaction speed. Transactions often pass through intermediary banks, each with its processing timeline. This relay-like mechanism leads to delays as funds traverse multiple institutions. It forces partners to unnecessarily waiting.

International Transfers

Cross-border transactions involve multiple financial institutions, currency conversion processes, and compliance checks. Traditional international wire transfers can take several days or weeks to complete. 

Clearing and Settlement

Traditional banks rely on dated clearing and settlement systems. The latter can take days to finalize transactions. It makes a lag between initiating a payment and its actual settlement. With the absence of tracking and customer support, it frustrates the participants. 

Missed Opportunities

The snail-paced transaction speeds within traditional banking can have tangible consequences. Missed investment opportunities, late bill payments, and delayed fund transfers are financial losses. No business owner wants it to happen.

Conclusion

Waiting for funds to arrive can be frustrating, especially for urgent matters. Incorporating fintech solutions will be a good decision. Avoiding the cons of the banking system is what entrepreneurs want. Wittix money transfer services empower clients and their businesses. They get a seamless and cost-effective way to send money internationally. Try Wittix out, and you will see while overcoming the limitations posed by traditional financial services! Good luck in your endeavors!

About Author

Ben Adam is a dedicated in-house copywriter at Wittix, a leading money transfer services company. With a passion for crafting compelling content and respect for clients, Ben has created engaging and informative articles that captivate readers and provide valuable insights into finance, money transfer, and related topics.

 


Leave a Reply

Your email address will not be published. Required fields are marked *