The World of Diginomics
is experiencing growing pains,
but it’s all part of growing up.
“Bitcoin is here to stay,” says Frank Schwab, co-founder of the Fintech Forum in Germany, according to CryptoCoinNews. “It is a first of its kind,” he says, referring to the fact that “bitcoin is the first globally relevant virtual currency that does not need the banking system.”
According to the article, “Banks will either respond to fintech or they will disappear, he said. Some banks will benefit from fintech while others will simply disappear.”
Antony Jenkins, former Group CEO of Barclays, agrees. “I’m predicting that over the next 10 years, we will see a number of very significant disruptions in financial services — let’s call them Uber moments – driven by companies in the Fintech sector.”
Jenkins is strongly bullish on the “transformative power of technology. It is an unstoppable force, which often has a hugely positive impact in the way we live and work. We will see massive pressure on incumbent banks, which will struggle to implement new technologies at the same pace as their new rivals [from the Fintech industry],” he says.
Speaking before the Royal Institute of International Affairs in London last November, Jenkins predicted that “the number of branches and people employed in the financial services sector may decline by as much as 50% in the next ten years. Even in a less harsh scenario, I expect a decline of at least 20%.”
If his predictions are accurate, Reuters projects that Barclays alone will “shut between 280-700 branches in Britain, along with cutting between 26,000 and 66,000 jobs worldwide.”
Business Insider (Aug. 14, 2016) reports that Millennials distrust of banks is helping to fuel the growth of the fintech industry. Comments from Rick Yang of New Enterprise Associates emphasize the point: “There’s a massive shift in consumer behavior and consumer trust,” he says. “Millennials have a massive
distrust of existing financial services. They tend to trust technology more than the recognized stalwart brands, like a JPMorgan Chase or a Wells Fargo.”
In conclusion, though, Yang feels there’s a balance coming between the two sectors. “I think it’s really hard to offer a full suite of banking,” he says. “It’s one of those things where at the end of the day, both sides are going to realize that they need each other but both sides are a little wary of each other.”