I like shape very much. A novel has to have shape, and life doesn’t have any — Jean Rhys
When the two brothers from Ireland founded Stripe, Patrick and John Collison wanted to change the behind the scenes plumbing through which individuals and companies could receive payments online. As per the Tim Ferriss show, their goal was to make accepting payments on the internet simpler and more inclusive. When it comes to the world of banking and financial services, their vision is shared by thousands of Financial Technology (FinTech) and pure play technology companies. In a joint venture with Goldman Sachs, Apple recently announced its foray into the credit card business. This is a move by a technology company to leverage its user base to diversify its revenue stream.
These technology companies are trying to improve the world of banking one element at a time. The incumbents also have woken up to the fact that their archaic systems need an overhaul if not for anyone, for their clients.
It is hard to imagine what the bank of the future will look like because the players in the financial services arena (incumbents, FinTechs and TechFins) are changing the business one piece at a time. Therefore, what you see changing is one scattered piece at a time and not a holistic approach. Second, while FinTechs have garnered early success, they are yet to match the scale, reputation and trust that systemically important banks (mega banks) enjoy. Thirdly, the ubiquitous branch (physical infrastructure) refuses to die especially when it comes to garnering deposits. Branches are becoming more compact and digitized. Many banks are using Artificial Intelligence (AI) to find the ideal branch location.
This article presents arguments why the bank of the future is being built one scattered piece at a time. It concludes with a different take on what the future may look like.
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