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CeFi, DeFi? No, it’s HyFi with WiFi!

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Growing up hi-fi was High Fidelity, the best way to hear music. In 2022, HyFi is hybrid finance, the best way to use money. HyFi combines CeFi with DeFi. I don’t believe you can just have one. DeFi works for small things; CeFi is required for big things; HyFi allows both to work seamlessly.

What does this mean?

It means that when you are making small payments, P2P stuff, mobile transactions and more, then DeFi is fine. The issue with DeFi is that it is unregulated. When your payment fails, who do you call? Googlebusters?

And this is the crux of the issue between DeFi and CeFi. If there is no control, how can you manage?

Now I do know that a lot of folks will tell me the network is the control. Really? What happens when the network fails? Who you gonna call? Googlebusters?

This hit home a long while ago, when I realised that I don’t have Google’s phone number. But it goes further than this. These days, we spend hours on calls because we don’t have access. My bank card has a payment that is questionable, I need to discuss it. I call the bank and the answer is: we are experiencing a high volume of calls at the moment, please wait or use our website. My flight is changed, I need a refund. I call the airline and the answer is: we are experiencing a high volume of calls at the moment, please wait or use our website. My booking to see the doctor has changed, I need a new booking. I call the doctor and the answer is: we are experiencing a high volume of calls at the moment, please wait or use our website.

To be honest, I got a surprise the other day when I booked a local taxi. You may ask why I didn’t book an Uber? That’s another story. My local taxi firm has had two ladies taking my bookings for years. I knew their names and felt I had a relationship with them. Now? It’s an automated booking system. The ladies are no longer there, and when you telephone – why are you using the phone? – you need to know the zip codes of where you travelling from and travelling to.

You may say: so just book an Uber; I will say: the system is broken.

We have moved to a world where everything is automated. I am all for that and, as you will know, I am an advocate of that. But … and it’s a big BUT … you have to have a control mechanism.

When the person booking the taxi does not know the zip code of where they’re going, you need an alternative. When the person trying to see the doctor, you need an alternative. When the flight booking is messed up, you need an alternative. When the payment fails, you need an alternative.

The big mistake we are making with digitalisation is believing ti can all be automated. Almost every business believes they can do this, because it saves them money. It’s a cost saving thing. What they fail to understand is that yes, it can save cost, but what about the customer?

When the automation fails, who does the customer call? Googlebusters?

And this hits at the crux of the discussion of DeFi and CeFi. I’m all for decentralised finance, peer-to-peer payments and cryptocurrencies. However, in a similar way to automated flight bookings, taxi rides, lost payment transactions and more, what happens when the technology doesn’t work? You need a better control system that, ideally, can resolve issues fast and easily.

To me, this is the biggest mistake most firms make, not just banks. When the system fails, you need the organisation to resolve the issues as fast as possible.

But then the question arises: do you build a business for the busiest day? Do you build a business for the one day of the year where everyone needs you? Putting it in context, and I’m aware this is a religious view of one religion, do you build your church for Easter Sunday?

There are one or two days of the year where everyone turns up. What about the rest of the year?

In the business world, I know that one or two days of the year, you will be very busy. Yet, why is it today that every day when you call, the answer is we are experiencing a high volume of calls at the moment, please wait or use our website.

Well, I know the answer is that the business just doesn’t care about me or my experience.

Returning to DeFi, CeFi and HyFi, the point is that you can decentralise as much as you want but, if you don’t have the controls and access to problem resolution, then you have a broken system. You need HyFi.


Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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