Why we still need banks (for now)

Greg Dickens
Nov 16, 2018 · 7 min read
Photo by Robert Bye on Unsplash

“We need banking. We don’t need banks anymore.”

-Bill Gates

If you were to guess when Bill Gates said this, I bet that many people would think this could be a quote from last week or last month.

  • Get a loan through SoFi, LendingCircle, or Alibaba
  • And send a payments using various different cryptocurrencies


Many people might disagree and say, of course I don’t trust banks after the financial crisis.


The second value that banks provide is scale, and what I mean by this is that you can take your debit or credit card and go around the world and make payments or withdraw cash from most shops or ATMs.


The last of these is probably the hardest to replicate and the least obvious. This is what former Bank of England Governor Mervyn King dubbed “alchemy”, essentially creating money from thin air.

  • The Bank takes this $90 from this and makes loans to businesses
  • $10 is kept in reserve by the Bank to pay back any customers who want to withdraw funds or to cover the losses from bad loans that don’t get paid back
  • If you loan money to someone on a P2P lending platform like Lending Circle, you can only access that money when the loan is repaid or if someone else agrees to buy that loan from you. (not easy to do in a crisis when loans are not being paid back)

These are tough problems to solve

FinTechs have already solved the easy problems that are out there with banking. Everyone knows that banks are not user friendly and that FinTechs can create better front-end experiences — that’s not hard!

This story is published in The Startup, Medium’s largest entrepreneurship publication followed by +389,305 people.

Subscribe to receive our top stories here.

The Startup

Get smarter at building your thing. Join The Startup’s +789K followers.

Sign up for Top 10 Stories

By The Startup

Get smarter at building your thing. Subscribe to receive The Startup's top 10 most read stories — delivered straight into your inbox, once a week. Take a look.

By signing up, you will create a Medium account if you don’t already have one. Review our Privacy Policy for more information about our privacy practices.

Check your inbox
Medium sent you an email at to complete your subscription.

The Startup

Get smarter at building your thing. Follow to join The Startup’s +8 million monthly readers & +789K followers.

Greg Dickens

Written by

Maker, recovering banker, living in Greece. Building affordable digital tools for local news and other indie publishers at https://www.epilocal.com

The Startup

Get smarter at building your thing. Follow to join The Startup’s +8 million monthly readers & +789K followers.

Medium is an open platform where 170 million readers come to find insightful and dynamic thinking. Here, expert and undiscovered voices alike dive into the heart of any topic and bring new ideas to the surface. Learn more

Follow the writers, publications, and topics that matter to you, and you’ll see them on your homepage and in your inbox. Explore

If you have a story to tell, knowledge to share, or a perspective to offer — welcome home. It’s easy and free to post your thinking on any topic. Write on Medium

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store