I was not familiar with the work of Angela Strange, a former googler now at Andreessen Horowitz, but and article by her caught my attention because in it she holds a theory that I’ve been thinking about for a long time and that I discussed in my latest book, “Living in the Future” (to be published this coming February): in the future, all companies will be fintech companies and will offer their clients financial services.
The reasons for this are clear: traditional banks are increasingly unpopular, particularly among younger people. At a time of fast-moving change, they are not perceived as particularly innovative, and furthermore, the entry barriers to providing financial services have fallen sharply.
Today, more and more businesses of various kinds are being integrated into banking: creating a fintech company and specializing in some of the stages of the financial services value chain is not particularly complex. Getting a banking license is becoming increasingly simple and will become even simpler in the future. However, in addition to a license, everything from information systems to the user interface, including security, payments and data analysis, is increasingly available. The growing number of startups in the fintech segment is a consequence of traditional banks providing opportunities that any entrepreneur would try to exploit.
Today, a bank can be anything from a tiny fintech startup to a telecommunications giant, a consumer electronics company or a department store. Any company can be a bank, and in fact, being one makes it possible to introduce into our business, many elements that can offer a differential value and convenience for our clients. As machine learning develops and is applied to the banking business, more and more features that were once obscure or little-known features are becoming a commodity that anyone can access. Traditional banks, operating from a privileged, protected position for decades, have led to a customer relationship culture that is no longer acceptable, and which they are proving incapable of redefining. Any Fintech is able to explain its business to customers better and more transparently than a traditional bank.
Strange’s long, detailed article, with video included, is worth reading carefully. Especially if you are in the banking business. And even if you’re not, the chances are that whatever you do, you may end up being involved in it one way or another. Unfortunately for traditional banks, all companies are going to become banks.
Previously published on Medium.com and is republished here under permission.
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