“[Financial] technology can reduce transaction costs, generate distributed trust, and empower decentralized platforms, potentially becoming a new foundation for decentralized business models. In the financial industry, this technology allows for the rise of decentralized financial services, which tend to be more decentralized, innovative, interoperable, borderless, and transparent,” says in a research paper published in the Journal of Business Venturing Insights.
For example, opening a bank account requires tedious processes, including a lump sum amount of money. For those working from paycheck to paycheck, producing such an amount can be challenging, limiting them from having a bank account. Now, DeFi innovations allow anyone to have a bank account without going through lengthy processes.
Such innovations allow users to participate in financial services by transforming the current system. Through DeFi powered by FinTech, millions of people can now access financial platforms that are only limited to wealthier classes.
