Читать книгу The FINTECH Book - Chishti Susanne - Страница 11

So how will financial institutions – and particularly the big banks – respond to this wave of FinTech innovation? The banking sector is vulnerable to disruption, partly as a result of recent history. Until the onset of the financial crisis, banks enjoyed a degree of public trust that was crucial to their brands. Although that trust hasn’t been entirely eliminated, it has certainly been eroded. As a study by the CCP Research Foundation revealed in June 2015, the world’s top sixteen global banks have, between them, incurred US$306 billion in conduct-related costs since 2010.9

In contrast, the leading lights of the digital era tend to be viewed positively. Research carried out for the Millennial Disruption Index report found that 73 % of respondents (teens to mid-thirties) would be much more excited about a new financial service delivered by Google or Apple than one announced by their incumbent bank.10 In that respect, traditional financial service providers are at risk. Customers no longer necessarily see the bank as the default provider or first port of call – what’s out there in the market is more exciting. And what’s out there in the market is treading heavily on the toes of incumbents. So, while individuals and businesses will always need banking services, will they still need banks?

At the most simple level, retail banks provide three crucial functions, namely:

● They take deposits and provide customers with a secure place to store cash and earn interest, backed by deposit insurance and significant regulation.

● They facilitate payments through a range of systems, including cash, cards, and transfers.

● They lend money.

To a financial services agnostic the same services can be provided by the new generation of technology-driven challengers. In terms of retail banking, money can be deposited with challenger banks, placed in pre-paid cards, stored in PayPal accounts, invested in bitcoins, or invested through P2P lending sites.

Credit is available from challenger banks and alternative lenders (including P2P), and customers have an increasing choice of payment options, including PayPal, e-wallets, and phone-based systems. While many of these options still use the plumbing of the banking system, in the medium term we may see payment and foreign exchange mechanisms that completely bypass the incumbent banking systems.