With the boom in FinTech, there are many new buzzwords entering the dialogue that describe the future of money and banking. One of those words is “friction.” Just what is this friction?
Broadly defined, financial system friction is anything that impedes the process of accessing financial assets (money/investments) or services (loans/capital).These include:
- Steps to setup and manage accounts.
- Time and effort necessary to perform a financial transaction.
- Monetary cost associated with financial transactions.
This affects the environment in which you manage your financial life. The goal is to seamlessly integrate this very important aspect of your life with the way you live day-to-day.
- Do you really need to go to a branch bank to deposit a check? No.
- Should you be able to participate in non-traditional investments and easily manage those investments online? Yes.
- Should you be able to instantly send money to anyone in the world and have the currency conversion and regulatory issues handled in real time? Yes.
- Should you be able to protect your identity and maintain privacy when conducting financial transactions? Yes.
- Should you be able to immediately acquire and liquidate physical assets such as gold and silver? Yes.
These are just a few of the friction points that financial technology is beginning to remove. Currently, the industry is wrestling with the best way to solve these problems given the introduction of world changing concepts such as distributed ledger technology (DLT).
Within the next few years, an ecosystem will emerge within which you will be able to manage your entire financial experience. Because money and finance are intimately intertwined in each person’s life, this ecosystem will be nothing less than world changing.
Financial technology is here. It’s finding it’s legs. Friction is being removed. Soon, best practices and standards will begin to emerge. We are here to help you understand this new financial world and ultimately, to enable your gold and silver holdings to integrate with it.