FirstCapital’s co-founder Hazel Moore has fully embraced the digital banking world, yet when she looks at banks today, she sees a system stuck in its ways, refusing to embrace an age of smartphones and big data.
Hazel Moore was speaking on stage at Inspirefest 2016 when she admitted to a number of awkward situations that have arisen in her daily life, as a result of her transitioning faster than others to a cashless existence.
While online banking is being adopted at a considerable rate with the advent of smartphones and mobile payments, Moore said this leads us to believe the rate of change is going faster than it actually is.
Banks are wasting an opportunity
While we might be sending money digitally or checking our statements online, real digital game changers like agreeing a loan account for less than 1pc of deals made across the globe.
“We are just at the beginning of the beginning of the revolution of the financial services that is to come,” she said.
Yet she emphasises that the while a significant portion of the population continue to use a system of cash and cheques that has worked for decades, if not hundreds of years, banks themselves are not doing enough to instigate a cashless future.
When drawing comparisons between the innovations made in the banking world and the online world, the difference of strategies is abundantly clear.
Taking the example of Facebook, Moore notes that its algorithms are constantly learning everything about you as a person; from who your friends are, to your tastes and interests.
“Almost every day, there is something about me going through my bank, and yet what are they doing with that data to make my life easier or to provide new products and services that surprise and delight me?,” she said. “Absolutely nothing. What a wasted opportunity.”
‘If I were a bank, I’d be really, really afraid’
If banks are to continue in their current guise, she warned, they could soon be left behind by the major tech companies who are more than happy to offer the digital banking services that traditional institutions seem less keen to do.
Moore cited the Millennial Disruption Index (MDI), a three-year study of industry disruption at the hands of this new generation, with 73pc of the 10,000 people surveyed saying they would prefer to use tech companies than banks.
Even more worrying for the banks is that 33pc of responders to the survey felt that the rate of fintech is advancing so fast that they don’t see the need for a bank at all.
“Those figures are incredible,” Moore said. “If I were a bank, I’d be really, really afraid.”
Entering Fintech 2.0
As Moore said earlier in her keynote, we are only on the cusp of the beginning of a new fintech revolution, but she believes ‘Fintech 2.0’ will see us delve into the core processes that make up these older institutions.
This will result in a jostling within the financial sector like nothing seen before, as banks attempt to maintain their power by buying tech companies to provide digital first services, while the tech industry will try to establish a whole new financial ecosystem with their own acquisitions.
“There’s a huge amount of value at stake,” she concluded, “and we’ve only just begun.”
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