{"id":479,"date":"2023-05-05T14:04:24","date_gmt":"2023-05-05T14:04:24","guid":{"rendered":"https:\/\/iqeq.com\/cn\/insights\/the-rise-of-alternative-banking\/"},"modified":"2024-08-16T13:06:55","modified_gmt":"2024-08-16T13:06:55","slug":"the-rise-of-alternative-banking","status":"publish","type":"post","link":"https:\/\/iqeq.com\/cn\/insights\/the-rise-of-alternative-banking\/","title":{"rendered":"The rise of alternative banking"},"content":{"rendered":"
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The global financial crisis of 2008 represented a watershed moment for the traditional banking industry, and whilst we are a long way from those dark days in 2023, recent high-profile incidents have led to increased focus on the sector.<\/strong><\/p>\n

Alternative banking options, which have steadily grown in popularity due to their long list of benefits, are emerging as leading solutions to restore a sense of security.<\/p>\n

In this article, we\u2019ll discuss the reasons behind the rise in alternative banking and why alternative banks might be the safest place to keep your cash in an uncertain market.<\/p>\n

Recent black swan events have prompted counterparty scrutiny<\/h2>\n

If firms can take one lesson from the recent tumult, it\u2019s the benefit of engaging diversified banking partners. Alternative banks, including electronic money institutions (EMIs)<\/a>, have become popular for those seeking a more user-friendly experience, flexibility with short-term lending, and greater transparency.<\/p>\n

Some firms are wary of alternative banking, however, in the UK, EMIs are subject to strict regulation and oversight<\/a> by the FCA. But as with any counterparty, a bit of due diligence goes a long way. Not all EMIs or other banking alternatives are created equal, so look into the bank\u2019s diversification and the state of its liquid assets before moving your money around.<\/p>\n

For their part, firms can diversify their banking risk by splitting up limits and using multiple counterparties to ensure they aren\u2019t putting all their proverbial eggs in a single basket.<\/p>\n

What are EMIs and why are they a popular alternative?<\/h2>\n

EMIs are financial institutions that provide online-only financial services<\/a> using electronic money. They can do most of what a bank might do, including issuing and redeeming (digital) money and processing international payments. EMIs arose to meet a need unmet by traditional banks<\/a>, which are often focused more on pleasing their shareholders than their customers. Here are just a few of the benefits offered by EMIs and other banking alternatives:<\/p>\n