What is a Web3 Bank? Where do Traditional Banks, NeoBanks and Rand fit?
At Rand, our mission is to be the next evolution of banking to democratize finance for all and enable you to build your financial wealth, no matter how little or how much you already have. Let’s look at the differences between traditional and NeoBanks, what they have in common, and where Rand fits in.
Traditional banks, Neo Banks and Rand all have one thing in common: they are regulated in their local jurisdiction and need licenses for custodial deposits and financial transactions in the country where they operate, such as within the European Union. CeFi (centralized finance) banks, or traditional banks, typically offer financial products such as payment processing, personal loans, mortgages, retirement accounts, financial advice, private banking, investment accounts just to name a few to both businesses and individuals. They store information and verify transactions by acting as a trusted intermediary between parties. They also regulate who can and cannot participate in financial products based on their suitability for investment. Banks are obligated to offer basic investor protection to customers and to ‘protect’ retail investors from high-risk products and services.
NeoBanks (think Revolut, Wise) harnesses Web 2.0 technology to create user-friendly digital-native bank accounts that streamline and update traditional banking and payment processing for the mobile app generation. They offer digital identity verification, in-app payments, higher interest bearing accounts and fee-free international transactions in a multitude of currencies. Neo Banks came about as part of the open banking movement to allow customers to easily access and manage their money within the traditional banking infrastructure using their mobile phone as the account interface. These are much more intuitive and user friendly but still rely on traditional banking infrastructures to deliver services to their customers (Think BACS, CHAPS and SWIFT payment systems), just neatly hidden in the backend of applications.
The goal of decentralization is to remove these trusted intermediaries (traditional banks) from financial transactions in banking and replace it with network verification. This means moving away from SWIFT payments infrastructure and building payment processing that does not use traditional banking networks. In DeFi (decentralized finance), financial transactions are verified, executed and completed via smart contracts which execute transactions automatically using coded instructions. Transactions are verified using consensus which means that transactions can only be approved when a majority of network participants verify that the transaction is valid and can be recorded on the digital ledger in the form of a block of transactions. Once the block has been recorded ‘on-chain’ it cannot be altered or amended and becomes a permanent record of the transaction which is visible to all participants. DeFi’s goal is to replicate financial markets without gatekeepers or barriers to entry; to create a more equitable and fair financial system for everyone and to allow anyone to participate regardless of their location or access to traditional intermediaries.
So where does Rand Fit? Rand is in many ways similar to NeoBanks but with one big difference. We harness the power of DeFi and open banking to bring these worlds together, to work for you! We want to forever change the financial status quo because we believe that everyone should have access to the most efficient and profitable products to get the most out of their money.
Rand is more than open banking at its best; our yield aggregator is the tool that unlocks and democratizes private banking and finance for all, empowering everyone to build wealth on their terms. It builds on the best market yield strategies across chains and platforms and empowers you via our earn and prize accounts. By automatically searching and creating strategies across DeFi, we can give you higher interest-bearing accounts that enable you to pay all your expenses on autopilot and save for larger goals faster, at a much lower cost to you and us.
So where can Rand take you? Take your place in the league of risk-takers, world-changers, move-makers and system-breakers to start creating the world around you the way you want it to be.
Rand provides the tools — you set the limits. Join Rand’s revolution today.
Rand brings its users the next evolution of banking. Rand is a simple mobile wallet and debit card that reimagines the way you save, spend, send and earn money. Simply open an account, and earn up to 7% interest on the savings you move into your Rand Earn Accounts. Or achieve your financial goals faster by moving your savings into Prize Accounts where you can win big every week without risking your money. If you don’t win, your initial investment stays put or can be withdrawn whenever suits you. It is that simple.
In 2021, Rand was founded in Barcelona with the premise that banking should evolve into a more user-centric industry where you have the financial tools to manage and make the most out of your money, no matter how much or how little savings you have.
Since the 1970s, the financial industry has changed very little and is deeply established in our economies. These services have become commodities built on volume, not value. This financial business model involves making as much profit as possible from your money, meaning that you will never profit as much as institutions do.
We want to forever change the financial status quo because we believe everyone should have access to exclusive financial products to make the most out of their money. So we built Rand to allow you to manage and grow your money differently, in a way that is profitable for you.