Sept 21, 2025

By Nick Mellios, CEO, BlocPal  

Originally published in Nick’s LinkedIn newsletter People-Powered Finance.

In my last post (“How We Design Money Today Shapes Tomorrow”), I wrote about how we’re at a pivotal moment where the design of money will determine who gains wealth and voice in shaping the future of society. Good design spreads opportunity; poor design concentrates wealth and decision-making power. The next question is: how do we get there?

We start with the foundation, the pipes and rails of finance, and we recognize the roles we need each stakeholder to play. Banks and regulators must strengthen and open up infrastructure, while fintechs and innovators build on top of it. When the foundational rails are strong and accessible, the local tech builders, who know their communities best, can deliver the tailored services those communities need most. If we want a system designed for people, it cannot be combative; it has to be collaborative.

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Why Finance Is Behind in the Digital Shift

Compared to telecom, retail, and entertainment, the financial sector has been slower to evolve digitally. There are reasons: stricter regulation, deeply entrenched legacy systems, and the comfort of steady profitability. Banks haven’t faced the same urgent pressure telcos did when voice and SMS revenues collapsed.

But the result is clear: while other industries pivoted to embrace platforms and ecosystems, finance has lagged. Telecom focused on open networks and connectivity; retailers reinvented themselves with omnichannel commerce; and media embraced streaming. In each case, incumbents leaned into digital rails and ecosystems, often transforming themselves and supporting platforms others could participate in and build upon.

Finance hasn’t made that shift as decisively. Open banking is still developing, and connections aren’t plug-and-play. APIs, standards, and access rules differ by market and even by bank. Cross-border payments are still slow and expensive. Many banks continue to run on decades-old technology. At the same time, fintechs, wallets, and decentralized networks show every day that money can move faster, cost less, and be easier to use.

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Learning From Telecom’s Digital Shift: Analog to Digital

The telecom industry offers us valuable lessons. In the early 2000s, phone and cable companies feared being reduced to “dumb pipes” while internet firms captured the value. Many tried to hold on with walled gardens, portals, and exclusive bundles. Consumers walked away. The open internet exploded, and people flocked to services like YouTube and Netflix for video, and to Skype and app-based messengers for long distance and SMS-style messaging at far lower cost and with better features. Telcos couldn’t stop the shift; they had to adapt.

What saved them wasn’t controlling every service, but embracing their role as infrastructure providers. By focusing on fast, reliable connectivity, they thrived: data demand surged, customer bases grew, and profitability returned. The lesson is simple: being the pipes was not a weakness; it was a strength.

Banks are at a similar crossroad today. They can keep trying to own every product, or they can double down on strong rails: secure payments, trusted custody, compliance, and settlement. By doing so, they empower fintechs, wallets, and innovators to build the experiences people want. Far from shrinking, this approach extends reach, strengthens trust, and creates new revenue opportunities.

And just as telcos now resell streaming bundles, banks can resell best-in-class fintech and digital-asset solutions, curating what works for customers while still running the rails everything depends on.

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India’s Digital Finance Leap

India shows what happens when the payment rails come first. Aadhaar (digital ID), Jan Dhan (basic accounts), and IMPS (instant transfers, 24/7) created a common stack that both banks and fintechs could build on. The results were dramatic: financial access jumped from roughly 25% of adults to more than 80% within a few years. Today, hundreds of millions use UPI daily to move money instantly at near-zero cost.

In many cases, India’s rails are faster and more flexible than North America’s. Through AEPS, a consumer can pay for goods or withdraw cash with a fingerprint at a local shop. UPI enables real-time, account-to-account payments with simple identifiers (like a phone number or virtual payment address) and QR at the point of sale. Regulation has also advanced open banking, letting fintechs plug directly into the stack to reach people with new services. The result: rails that are open, shared, and widely used.

When infrastructure is strong and open, innovation flourishes, and people benefit at scale.

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Blockchain, AI, and the Next Wave

Blockchain tells a similar story in a different way. Bitcoin showed that people could transact across borders without any single institution. It is open-source, borderless, and community-run. In many ways, it grew like a flower pushing through cracks in concrete: even when the foundation wasn’t open, people found a way to build new rails.

That persistence is a signal to banks and regulators. If the official rails are closed or too slow, innovation will emerge elsewhere. The better path is to support it – to provide the pipes and gateways that make new technologies safer for consumers. Secure on-ramps, custody, oversight, and fraud controls don’t stifle innovation; they help it flourish in ways that are sustainable and less prone to abuse.

And blockchain won’t be the last wave. AI is already moving into finance with equal speed and unpredictability. If banks can’t adapt quickly to blockchain, how will they handle AI’s impact? Telecom’s history shows the pattern: those that resisted were left behind; those that embraced infrastructure and partnerships thrived.

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Thriving as Gateways, Not Gatekeepers

The way forward is clear. Banks should embrace their role as gateways and networks, not gatekeepers. By focusing on strong rails and enabling innovation on top, they remain relevant, expand their reach, and open new revenue streams. Regulators can protect without suffocating. Innovators can push the edges. And users benefit from services that are faster, cheaper, and better tailored to their needs.

When banks and regulators strengthen the foundations and act as gateways, they make it possible for innovators to meet people where they are with meaningful, tailored services. We saw this in telecom: as networks opened and improved, creativity surged, services flourished, access widened, and industry revenues grew with the traffic.

Finance can follow the same path. Strong, shared infrastructure isn’t just about moving money efficiently; it creates the conditions for more people to build wealth and expand their ability to invest, save, and grow. When wealth is more broadly held, people and communities gain a stronger voice in the choices that shape our future.

Thanks for reading, and stay tuned for the next issue.

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