Web3.0 is a concept of a new iteration of the World Wide Web based on blockchain technology which was coined in 2014 and gained traction in 2021.
The possible transformation to the new version of a decentralised web, will likely reshape business and operating models. Octavian Patrascu, founder of global broker CAPEX.com has entertained the idea and shared his vision of uncharted territory traditional banking systems and financial service companies will step into with the new age of Web 3.0.
So what can we expect for the fintech industry in the Web 3.0 iteration?
Web3.0 and fintech companies
The launch of Bitcoin in 2009 triggered growth in the financial technology sector. In the following years, there was a rise of fintech companies and increased development of innovative technologies that traditional financial institutions are now using.
Businesses can already feel the effects of decentralized finance (DeFi), which is based on blockchain technology.
DeFi is a new financial system outside of the central authorities’ control. The system’s protocols and platforms that provide financial services are decentralized and cannot be shut down by a bank. DeFi’s efficiency allows people to send money directly to someone without a mediator. All the transactions are recorded on the blockchain and are visible to everyone with an Internet connection, making it more transparent and accessible.
Due to these advantages of the DeFi systems, Web 3.0 can make the onboarding process more user-friendly. It can also make the storing of data safer.
The list of contributing technologies to Web 3.0 can help fintechs automate processes to perform customer journey mapping and allocate resources more efficiently to meet client demands, facilitate better engagement, and encourage enduring loyalty.
Octavian Patrascu, founder of global broker CAPEX.com stated:
Artificial intelligence, IoT (Internet of things), and blockchain technology – the three crucial foundations of Web 3.0 – ensure real-time, secure, and transparent transactions for FinTech companies worldwide.
Web 3.0 reduces account suspensions and denial of distributed services, helping financial technology businesses lower the cost of managing server failures or other similar issues.
The idea of Artificial intelligence (AI) and Machine Learning (ML) aspects of Web 3 come from Bernard Lee’s vision of a Semantic Web in which all data is machine readable.
Web 3 and the challenges it poses
The new Web 3 technology also poses challenges. The DeFi is still in the early stages of development which would lead to bugs and glitches that need to be fixed.
The fast-evolving nature of blockchain can also take businesses and entrepreneurs by surprise quickly changing protocols and platforms that provide financial services.
The rules and regulations in the traditional financial system, as KYC (know your customer) and AML (anti-money laundering), may not necessarily apply in DeFI, as a global system.
The future opportunities
With the arrival of DeFi, we observe a new wave of financial applications and services built on the Ethereum blockchain. Under web 3, we will see a shift from traditional financial infrastructure, centralized and controlled by a few institutions, towards a more decentralized and open system.
The change will open new opportunities for innovation and pave the way for a more inclusive and democratic financial system to emerge.
Octavian Patrascu said:
Democratization is a significant component in trading nowadays, and I know that investors are frequently looking for new prospects. The 2022 economic outlook allows more people to start investing in assets that were not considered feasible just a few years ago. As one of the leading global fintech companies, it’s only natural for us to look into the future to offer new types of services related to DeFi.