What’s the future of finance? Here’s what those in the know say
We asked those in the know – from challenger banks and traditional banks to fintech startup stars – what's future of financial services? As the Innovate Finance Global Summit kicks off, here's what the experts had to say.
Taavet Hinrikus, chief executive and co-founder, TransferWise
"In five years’ time, some parts of the sector will be almost universally controlled by non-banks; other parts will be a mix. The most important result will be the true democratisation of finance. The nature of the current 'bundle' model of banking is fundamentally unfair. But this is changing – and the consumer will benefit.
"In ten years, it will be transformed. The main shift will be in our expectations and behaviour as consumers. Most of us are now happy to use alternatives to banks for more and more of our financial needs."
Anthony Thomson, founder, Atom Bank
"Financial services is going through the most seismic shift I have seen in 30 years of looking at market data. The future is digital in general and mobile in particular. By 2020 more banking transactions will be done on mobile devices that all the other channels (branch, telephone, internet) put together. Debit and credit cards will eventually disappear as all payments are made on mobile devices."
Marta Krupinska, co-founder, Azimo
"Even in as little as five to 10 years, the financial services industry will be a very different world in the future. Our world today is mobile-first and that could easily become mobile-only in the years to come. For financial services, that means that two billion more people will have smartphone centric mobile wallets in places like Africa and Asia putting them financially on grid – think about what that would mean for the families and the economies in those regions.
"Social media will also become a mainstream way to send money. Whether it’s through WhatsApp, Viber or Facebook Messenger for example. We were one of the first to integrate our service with Facebook, allowing customers to add beneficiaries based on their Facebook profile. Surprisingly, it’s easier to forge a passport than it is to forge a social media profile with hundreds of friends, constant activity etc. – another reason why this will take off."
Patrick Eltridge, chief information officer, RBS
"I am often asked what is the single biggest difference between great and good in technology, what is the one thing that separates the leaders from the pack and it’s very simple – cycle time. To put it very simply: how long does it take your business to offer new products, respond to the market or to finally provide the function your customers have been waiting for?
"The fintech and start-up community are great examples of sectors which focus on cycle time. Take the example of Mondo: they are not afraid to release in Alpha and Beta to customers. In this example, getting to customers quickly with a strong proposition is more important than perfectly polished (and delayed) propositions. Working closely with the fintech ecosystem is a great way for the industry to get better at cycle time.
"In a race, the slowest are often forgotten, as having great products and a great user experience relies on an ability to get your services quickly to your customers wherever they are. Value, customer trust and advocacy are as important as ever, but never before has the saying 'he who waits is lost' been more important."
Travers Clarke-Walker, chief marketing officer, Fiserv International
"Customers want a convenient and frictionless experience, and fintech companies and banks will work together to deliver it. So whether it is a new entrant, niche bank, small bank or an established institution, fintech companies are ready to support banks as they venture towards providing a richer experience to the customer. We are in a vibrant fintech environment, but what must happen is a greater degree of collaboration. Banks need to look to advisory services and make the most of the expertise of companies who can help them adapt."
Rhydian Lewis, chief executive, Ratesetter
"More lending will be done through marketplaces than through banks. It is already the case in the US that more lending is done via capital markets than via banks; this will happen in the UK and Europe too, with the emergence of marketplace lending platforms just accelerating that trend. It will become completely natural for investors, both retail and institutional, to hold loans in their portfolio, just as there is already mass-market ownership of equities."