Trapped by the System: How the Modern Banking Model Keeps Millions Stuck — and what MOSARSY offers instead

Most of us were told the same story in school: study hard, get a job, save money in a bank, and you’ll be fine. But that neat narrative hides a harder truth. For huge numbers of people around the world, the financial system is less a safety net and more a slow-moving trap: low returns on saved capital, recurring fees, poor financial education, and an ecosystem that funnels value upward into banks and political power structures. Below I lay out the problem with data, explain the mechanics of the “vicious cycle,” and present alternatives — including the MOSARSY idea — for people who want to keep more of what they earn and build real financial resilience.

1) The scale of the problem: many people still lack useful financial access — and those who have it are often unprepared to use it well

Despite huge technological progress, many adults globally remain outside or at the margins of effective financial participation. The World Bank’s Global Findex shows that while account ownership has improved, a large share of adults still don’t regularly use formal financial services; recent updates highlight that hundreds of millions remain under-served and many who do have accounts don’t use them to build savings or credit effectively. World Bank+1

At the same time, international studies repeatedly show low financial-literacy levels. The OECD/INFE international survey found that only a minority of adults reach target scores on basic financial and digital financial literacy measures — meaning a lot of people are making decisions about money without a reliable foundation. Low literacy increases the chance of costly mistakes (high-interest borrowing, missed fee avoidance tactics, poor savings choices). OECD+1

2) The mechanics of the vicious cycle — how schooling, product design, and incentives combine to trap capital

Here’s how the cycle typically works for millions of workers:

1. Poor financial education — Schools emphasize testable academic skills, rarely teaching practical money management, credit mechanics, or how banking products really work. People enter adulthood underprepared. (See the OECD findings on low financial literacy.) OECD

2. Safety-first behavior — Because of limited knowledge and fear of risk, people keep a large portion of their liquid capital in transactional bank accounts or low-yield savings accounts “for safety.” These accounts are often easy to access, but pay negligible returns relative to inflation. (Average savings yields remain low in many markets — the U.S. average savings-rate figure is a fraction of what inflation erodes.) Forbes+1

3. Banks monetize that inertia — Banks use low-cost deposits to fund lending and investment, earn spreads, fees, and large profits. Again and again, global banking reports show the industry generates very large revenues and net income — meaning the system monetizes the public’s cash holdings. Globally banks generated trillions in revenue and over a trillion dollars in net income in recent years. McKinsey & Company+1

4. Fees and product design punish the poor or uninformed — Overdraft charges, monthly maintenance fees, and other penalties are disproportionally paid by lower-income or less financially literate people. While some regulators and large banks have reduced certain fee streams, fee revenue historically has been a major profit source. For example, overdraft/NSF revenues were billions annually (though they’ve fallen in some markets recently after policy and product changes). Consumer Financial Protection Bureau

5. Political reinforcement — Large banking systems have political influence over regulations, subsidies, and policy design. When capital sits in banks and banks are profitable, political incentives to maintain the status quo are strong. The result: slow reform, incremental fixes rather than systemic change.

6. The combined effect is that many workers effectively subsidize the broader financial and political ecosystem by keeping capital in low-yield accounts and paying recurring fees — while receiving little in return besides nominal “safety.” The aggregate numbers are striking: the banking sector’s profitability demonstrates the scale of value extracted from customer deposits and fees. McKinsey & Company+1

3) Some hard numbers that matter

1. Unbanked / under-used accounts: The World Bank’s Global Findex has shown dramatic improvements in account ownership in recent years, but hundreds of millions of adults in developing economies still don’t use formal financial services regularly; progress is uneven and many newly “banked” users still don't save or access credit effectively through formal channels. World Bank+1

2. Financial literacy: The OECD/INFE 2023 survey shows low scoring across many countries — only a minority of adults meet the minimum target score for financial literacy and digital financial literacy, which directly correlates with poorer financial outcomes and vulnerability. OECD

3. Bank industry scale & profits: McKinsey and other global reviews report the banking industry generated roughly $7 trillion in revenues and about $1.1–$1.15 trillion in net income globally in recent reporting years — illustrating how large the sector is and how much value circulates through it. Those profits are built in large part on spreads, fees, and the use of customer deposits. McKinsey & Company+1

4. Low returns on deposits: Average savings-account rates in many developed markets are very low (examples: U.S. average savings rate reported around the low fractions of a percent to low single-digits depending on dataset). That means real returns after inflation are often negative for typical bank deposits. Forbes+1

5. Fee revenue: While some fee categories have declined, overdraft/NSF fees were billions of dollars annually in the U.S. alone prior to reforms and still represent material revenue for banks; consumer-protection changes have reduced some of that but have not removed all friction or profit-taking. Consumer Financial Protection Bureau

4) The human cost: trapped capital, lost opportunity, stress

When people keep their money where it’s “safe” but unproductive, the immediate visible cost is small — but over time it compounds into lost opportunity:

1. Eroded purchasing power: Low nominal returns plus inflation mean savings often lose purchasing power year after year.

2. Missed investment & growth: Money sitting idle could support higher-yield, community-focused, or peer-based financial arrangements (when done wisely).

3. Psychological load: Financial stress — from fees, unpredictable penalties, or lack of knowledge — reduces life quality and decision bandwidth. (Surveys show a large share of people report stress tied to finances.) NEFE+1

5) Real alternatives — not magic tricks, but smarter design

This is where alternatives like MOSARSY come in. MOSARSY is designed to address precisely these failure points: poor education, lock-in to low-value banking products, and lack of community-based financial mechanisms. (Below I summarize how MOSARSY-style solutions provide alternatives — grounded in the features you, the creator, have been building — plus general approaches others have used.)

Features & approaches MOSARSY-style platforms should prioritize:

1. Shared & accountable group structures (“rings”) — small groups (for example, 12-member rings) where members contribute, rotate access to pooled funds, or use pooled capital to support members’ needs. These structures build mutual trust, reduce reliance on predatory credit, and keep capital productive inside the community. (You’ve planned MOSARSY to support 12-member rings and member-managed groups.)

2. Financial education baked into the UX — short, actionable lessons, calculators, and decision guides at the moment people make choices (not as separate lectures). This directly attacks the education problem OECD highlights. OECD

3. Transparent fee & incentive alignment — platforms that either minimize fees or transparently return value to members (rather than opaque fee capture).

4. In-app notifications and admin controls to help groups manage reminders, payments, and payouts, reducing cognitive load and late fees (you’ve already mentioned building admin-managed reminders and payout logging).

5. Hybrid product design — combining on-platform liquidity for day-to-day needs with pathways to diversify into higher-yield, low-cost options (community loans, micro-investing, cooperative bonds) when appropriate.

6. Strong privacy & governance — ensure members’ capital is governed by clear rules and visible logs — which builds trust and resists capture by third parties.

These are not theoretical: community-based financial cooperatives, rotating savings and credit associations (ROSCAs), microfinance institutions, and modern fintech cooperatives have long demonstrated that alternatives to traditional deposit/loan models can work — especially when combined with education and digital convenience.

6) What a person can do today (practical steps)

1. Ask for (and compare) effective yields — don’t assume the default bank is the best place for all cash. Compare real rates after inflation and fees. Use online aggregator tools and official central-bank/deposit-rate data. Forbes+1

2. Build short, medium, long buckets — separate emergency cash (small), working capital (moderate), and longer-term savings/investments (higher yield). This prevents over-saving in zero-yield accounts.

3. Join or start a trusted savings ring — small groups with clear rules can amplify savings, provide low-cost credit, and build financial discipline. Digital platforms like MOSARSY aim to make this easy and auditable.

4. Invest in financial literacy — short courses, reputable guides, and interactive calculators pay for themselves quickly in avoided fees and better investment choices. OECD data shows this matters. OECD

5. Use regulated alternatives — credit unions, community banks with transparent pricing, and vetted fintech savings products can offer better terms than large incumbents — but always check protections (deposit insurance, regulatory oversight).

7) Final note — reform versus alternatives

Systemic reform matters: better regulation, fee transparency, and mandatory financial education can change the macro picture. But reforms are often slow. Meanwhile, tools and platforms that combine community governance, education, and modern UX can help people escape the slow-drip extraction of value and build resilient financial lives now.

MOSARSY isn’t a silver bullet — no single platform will solve centuries of structural imbalance overnight — but its design goals (personalization, small-group rings, admin/notification tools, depositor control and transparency) are exactly the kind of practical, user-centered responses the current moment needs. If people can move even a portion of their working capital from low-yield, fee-prone accounts into better-managed community-backed instruments — while learning the basics of financial decision-making — the individual and collective gains can be substantial.

If you want, I can turn this into a polished blog post for your MOSARSY site (with headings, images, and the signature you prefer), add data visualization (savings-rate vs inflation charts), or create a one-page explainer for potential users and partners that highlights the MOSARSY ring model and onboarding steps.

Angel Garcia Ontiveros

Founder, MÖSARSY

Financial empowerment, built on trust.

Sources

World Bank — Financial inclusion & Global Findex. World Bank+1OECD/INFE — International Survey of Adult Financial Literacy (2023). OECD+1Forbes / FDIC data — average savings account rates (coverage & U.S. examples). ForbesDeposit interest rate datasets (by country). TheGlobalEconomy.comMcKinsey — Global Banking Annual Review (bank revenues & net income). McKinsey & Company+1Consumer Financial Protection Bureau (CFPB) — overdraft/NSF fee revenue trends. Consumer Financial Protection Bureau