Unbanking

Unbanking refers to the process of withdrawing funds, severing financial ties, or disengaging from traditional banking services and institutions. This can involve closing accounts, refusing to utilize bank-provided services, or choosing alternative financial solutions like digital wallets, cryptocurrency platforms, or decentralized finance (DeFi) options. The motivation behind Unbanking can range from dissatisfaction with high fees, lack of transparency, or ethical concerns to a desire for greater financial control and autonomy. It is a multifaceted concept with potentially significant impacts on both individual finances and the broader financial ecosystem. This involves rejecting traditional banking services for new and innovative financial solutions.

Unbanking meaning with examples

• Frustrated by hidden fees and poor customer service, Sarah chose to start unbanking. She closed her checking account, opting for a digital wallet and peer-to-peer payment apps for her everyday transactions. This allowed her more financial control and transparency, aligning her banking choices with her values, and avoiding bank limitations.
• The rise of cryptocurrency has encouraged many individuals to begin unbanking. They are transferring their assets into digital currencies and utilizing DeFi platforms for lending, borrowing, and investment. They hope to gain more control over their wealth, and avoid government controls.
• Following the scandal, the community organized an Unbanking campaign. Encouraging people to withdraw their deposits from the involved bank and move their business to a credit union or other financial institutions that better reflected their values, forcing the bank to deal with its reputation issues.
• Many small business owners are considering Unbanking due to the cumbersome application process for business loans and the slow turnaround times. They are turning to online lenders and alternative financing options. This helps them with fast and flexible financial support and streamlined experiences.
• Driven by privacy concerns, John initiated Unbanking by opening an offshore account, moving his assets from the country's banks to one with stricter privacy regulations and less government oversight. This offered him more security and control over his information, aligning with his security goals.