A Guide to Financial Services
The convenience of making financial services and financial transactions in general had been revolutionized first when telegraph companies have introduced wire transfers. However, with the coming new era of financial services, it’s time that we address the question of what would be the future of financial services?
Well, let’s start by looking at how things have gone for almost 100 years since the first time when wire transfers were introduced. Transferring funds using wire transfer methods through a bank is not a single step process but a multi step procedure. This works when the sender approaches his or her bank and ordered a fund transfer to an account. Unique codes will be provided to the bank by the sender to let the bank exactly know where the fund has to be transferred.
The bank of the sender will be contacting the bank of receiver by means of sending a message via security system, creating signals that a transfer is ought to be made. The receiver’s bank will get this message including the instructions for settlement and then, ask the bank of sender to transfer the specific amount in the message. Now, the bank of sender can proceed on transferring the amount. This isn’t done in one go however, bit by bit. Having said that, the whole process could take anywhere from few hours to two days for the whole sum be completely transferred.
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To be able to make the transfer, both banks should have a reciprocal account on each other. The transfer is made using correspondent bank that holds such an account if that isn’t the case. If you would notice, this type of transfers are relying heavily on mediator, taking more time than it should and also, prove to be costly mainly because banks charge some fee for the services offered. But if you want an alternative to such, opting for distributed currencies is a good choice as this makes the process easier.
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What set these kinds of services apart from conventional services is, they are not relying on central mediator instead, they operate using cryptographic protocols. Here, the process is way simpler, faster and most of all, more efficient. The system is transparent as well to both users while traditional systems used are more vulnerable to fraud because of complex processes involved. The fact that it is easy to trace transactions back to every creation of the unit value is what appears to be the drawback for this service.
Still, there are many people who are using distributed services and even P2P mobile transfers in which network operator help user in transferring funds simply by sending SMS.