Banking like Water
by: Frank Sonder
In his famous New York Times interview David Bowie described the future of the music industry with “music like water”. 12 years later we listen to songs on spotify and gain mobile access to an nearly endless music library. As a result we witness diminishing intellectual property, the extinction of copyrights at a large scale and an almost completely new business model for music. Similar scenarios apply to movies, transportation and the way we consume media.
Banking is next. Digitalization and intelligent algorithms put the financial industry under extensive pressure. Their products and services are not even original or unique. However they transform in the same way as music to being completely digital and ubiquitous. In addition clients are losing trust, new competition is arising and stronger regulations erode a business model that was supposed to be safe. What about banking becoming an infrastructural component too? What about a new currency that is not backed up by governments and political unions but by communities? Might it be bitcoin or paying with mobile phone minutes in Kenya.
Nowadays there is almost no business area of banks that is not fundamentally questioned by fin-tech startups or peer to peer networks. Payment is increasingly done mobile and digital, financing via crowd funding is still taking of, investments based on algorithms and cognitive computing are rising — you name it.
It is time to rethink banking radically — if at all.
Editors Notes: This entry has been submitted to the FINTECH Book, the world’s 1st globally crowd-sourced book on FINTECH. Readers that enjoyed this initial abstract are invited to share and like it so that it may be featured in a longer version.