What will the bank account look like in 2030?
Much can change in 12 years. Between 2000 and 2012, the world saw the invention of the iPhone, the birth of Facebook, the rise of Google, and Amazon’s breakaway from selling books to selling everything.
So how might the banking industry evolve over the next 12 years. By 2030, countless new innovations and companies could shake up the status quo. Here are some of the trends to look out for.
Many high street banks will still be around
Many of the established banks will still be active by 2030, according to our research. A handful will disappear, either through bankruptcy, or through industry consolidation. The banks that survive may also look dramatically different, shedding unprofitable areas of business to focus on niche markets.
Several challengers will survive — but not all
The banking industry is ripe for disruption, and the opportunity is vast. This is why so many new entrants are now vying to seize market share. Not all of these neobanks and financial innovators will survive but there is room for several to co-exist. The survivors will fall into two camps: marketplace/hub or specialist. The former being a one-stop aggregator for financial services, pulling in the best apps and products as partners and wrapping it all up in one slick and easy interface. The latter will have a laser focus on a specific problem, which it will solve brilliantly, until it is either acquired by a larger bank, or slotted into the marketplace.
Consolidation is coming
The next few years will bring major consolidation in banking, as financial giants attempt to acquire the bright young technologies and businesses that will assure their survival. Most have flirted with in-house labs and accelerators but these have largely proved unsuccessful. As deal frequencies and values rise, more and more start-ups will pile into banking; VCs have already seen this “froth” build in the financial services industry. A few new brands will maintain their independence, and reach a scale where they too are buying up the new disruptors.
The most successful marketplaces will offer more than financial services
Just like WeChat in Asia, which has seamlessly connected the seemingly disparate worlds of social media and payments, the uber-marketplace of the future will be more than a financial services provider. It will be a one-stop shop. Money is fundamental to almost everything we do every day, whether we’re earning it or spending it. Successful marketplaces will position money as part of a spectrum of services that help the consumer.
The survivors will fall into two camps: marketplace/hub or specialist. The former being a one-stop aggregator for financial services, pulling in the best apps and products as partners and wrapping it all up in one slick and easy interface. The latter will have a laser focus on a specific problem, which it will solve brilliantly, until it is either acquired by a larger bank, or slotted into the marketplace.
It is unlikely that many of the tech giants will become banks
The likes of Amazon and PayPal will continue to build up their portfolio of financial services but may stop short of becoming a full-fledged bank. This will avoid excess scrutiny from international regulators, and prevent cash being tied up by strict capital requirements. They will work with existing banks and some of the new challengers to support these new services. Nonetheless, they will seem like banks to the man on the street, with branded bank cards and wallets, branded credit tools and seamless transition between products.
Bank branches will continue to disappear
The only branches that remain will have a specific business case. This will be either because they are in areas of high footfall and double as marketing for the brand, or because the cost is covered by the value they create; the safe deposit boxes they store, for example. More and more banking will happen online via chat technology or apps.
A “black swan” is not inconceivable
A major global event, catastrophe, or technological leap could have an enormous impact on the world in next decade. Known as “black swans”, these kinds of scenario are impossible to predict but may drastically affect all industries, including banking, and force business models in an entirely new direction.
Global banks will rise
At the moment, the majority of banks operate in geographic silos. In future, hi-tech banks will cross borders and be able to attract customers in multiple territories.
Blockchain will become a significant technology in banking
Blockchain technologies will gradually be matched to applications that revolutionise the user experience across multiple industries — but it is not yet clear how much this will change the overall banking industry. Cryptocurrencies will rise in prominence but are unlikely to become part of the fabric of everyday banking. Brands that do hold cash in crypto form will be forced to find ways to keep the currency stable so it can be easily and quickly swapped into fiat currencies without swinging too far in value.
More regulation is coming
The regulators are still playing catch up. This age of innovation will see a raft of new laws and regulations to help protect consumers and force banks (new and old) to ensure their business models are robust and fair. The true impact of Open Banking will not be felt immediately but be seen as a game-changer for the banking industry by 2030.
Identity and data will come at a premium
People will have more and more control over what data they share over the coming decade. Brands will be forced to reveal exactly how they use this data to make decisions, and to be transparent about how it is harvested. Consumers will eventually be able to knowingly trade their data and identity in return for perks, discounts and special services.
