Crowdfunding has become a significant topic in IELTS Writing Task 2, appearing frequently in questions about modern finance, technology, and social change. Based on analysis of past exam papers, this theme has appeared in various forms since 2019, particularly in questions about economic development and technological innovation.
Comparative analysis between crowdfunding and traditional banking systems
Actual IELTS Task 2 Question
Some people believe that crowdfunding platforms have become a better option than traditional banks for both businesses and individuals seeking financial support. To what extent do you agree or disagree with this statement?
Question Analysis
- Topic: Comparison between crowdfunding and traditional banking
- Task: Opinion essay (agree/disagree)
- Key points to address:
- Benefits and drawbacks of crowdfunding
- Advantages and limitations of traditional banking
- Comparison between both funding methods
- Personal stance with supporting arguments
Sample Essay 1 (Band 8.5)
In recent years, crowdfunding has emerged as a revolutionary financing method, challenging the dominance of traditional banking institutions. While I partially agree that crowdfunding platforms offer unique advantages, I believe their role is complementary rather than superior to conventional banking.
Crowdfunding platforms indeed present several compelling advantages over traditional banks. Firstly, they democratize access to capital by allowing entrepreneurs to reach a global pool of potential investors directly, eliminating many bureaucratic hurdles associated with bank loans. For instance, many successful tech startups have secured initial funding through platforms like Kickstarter without requiring collateral or extensive credit history. Additionally, crowdfunding creates a unique marketing opportunity, enabling businesses to validate their concepts and build a customer base before launch.
However, traditional banks maintain crucial advantages that crowdfunding cannot fully replicate. They offer financial stability, regulatory protection, and professional guidance that are essential for long-term business growth. Moreover, banks provide a comprehensive suite of financial services, including business advisory, international trade support, and risk management tools. These services are particularly vital for established businesses requiring substantial capital or complex financial solutions.
I believe the optimal approach lies in recognizing both systems’ complementary nature. While crowdfunding excels at supporting innovative projects and early-stage ventures, traditional banking remains indispensable for structured financing and comprehensive financial services. The future of funding likely involves a hybrid model where businesses strategically utilize both platforms based on their specific needs and growth stages.
Sample Essay 2 (Band 6.5)
Nowadays, many people think crowdfunding websites are better than traditional banks for getting money. I partly agree with this idea because both systems have good and bad points.
Crowdfunding has some benefits. First, it is easier to get money because you don’t need to show many documents like banks require. Also, people can start their projects quickly if many people like their ideas. For example, many small businesses got money from crowdfunding during COVID-19 when banks were strict about lending.
But traditional banks are still important. They are safer because governments check them carefully. Also, banks give professional advice about money and help businesses grow. Sometimes crowdfunding projects fail and people lose their money because there is less protection.
I think both systems are useful in different ways. Crowdfunding is good for new ideas and small projects, while banks are better for big loans and serious business plans. People should choose the right option based on what they need.
Scoring Analysis
Band 8.5 Essay:
- Task Response (9): Comprehensive coverage with sophisticated analysis
- Coherence & Cohesion (8): Clear progression with effective use of cohesive devices
- Lexical Resource (9): Sophisticated vocabulary with natural flexibility
- Grammar (8): Wide range of structures with full control
Band 6.5 Essay:
- Task Response (6): Clear position but less developed ideas
- Coherence & Cohesion (7): Basic organization with some logical progression
- Lexical Resource (6): Adequate vocabulary but limited range
- Grammar (7): Mix of simple and complex structures
Key Vocabulary
- democratize (verb) /dɪˈmɒkrətaɪz/ – make something accessible to everyone
- bureaucratic hurdles (n.phrase) /ˌbjʊərəˈkrætɪk ˈhɜːdlz/ – administrative obstacles
- collateral (noun) /kəˈlætərəl/ – property or assets offered as security
- regulatory protection (n.phrase) /ˌreɡjʊˈleɪtəri prəˈtekʃn/ – safeguards provided by official rules
- complementary (adj) /ˌkɒmplɪˈmentri/ – combining in a way that enhances qualities
Conclusion
The relationship between crowdfunding and traditional banking represents a significant modern financial topic. For practice, consider writing essays on related topics such as:
- The impact of digital finance on traditional banking
- The role of technology in democratizing financial services
- The future of banking in a digital age
Share your practice essays in the comments section for feedback and discussion.
