Will we ever live in a post-bank world?

4 Jul 2016

Hazel Moore, co-founder of FirstCapital, David Tighe, head of innovation at Bank of Ireland and Claire Calmejane, director of innovation at Lloyds Banking Group, discussing the future of fintech at Inspirefest

What is blockchain all about, and will we ever live in a world without banks? These were questions put to a panel of experts at Inspirefest 2016.

A few months back, we looked into banking and what the future holds. Among everything from tiny start-ups popping up to nab a slice of the banking pie, right through to the threat of popular companies like Facebook or Google scaring major banks with their data-driven might, one clear theme come through.

The customer is winning.

Everywhere you look in banking, the customer is winning. Faster transactions? Check. Less arduous paperwork? Check. Less meetings, easier ways to manage money in real time, and cheaper currency transactions? Check, check, check.

Are banks becoming obsolete?

However, it’s all relative, with some areas progressing faster than others. Our transactions are dominated by mobile, with companies such as Google and Apple enjoying greater insight into our financial-transaction world.

One question crops up quite regularly when people look into this field: will there be a day when we don’t need banks?

Not according to Hazel Moore, co-founder of FirstCapital, David Tighe, head of innovation at Bank of Ireland, and Claire Calmejane, director of innovation at Lloyds Banking group, who sat down to chat about the subject at Inspirefest 2016 in Dublin last week.

Claire Calmejane, director of innovation at Lloyds Banking Group

Claire Calmejane, director of innovation at Lloyds Banking Group

“No, there is still a big population who do not use online,” noted Calmejane, who spoke of banks’ attempts to find services suitable for all amid an ever-changing environment.

“They have fear,” she said. “We are thinking hard of building an inclusive environment for customers. Our customer base is very diverse, providing services that could fit everybody is the goal.

A changing rulebook

“I think it is unlikely that there will be a post bank world,” said Moore, who noted the impending Directive on Payments Services 2, which is soon to shake up the banking world for good.

“That forces the banks to open up their infrastructure to anybody, through APIs,” she said, highlighting the risk that banks become “reduced to a utility”.

“Others can come in and deliver services on top of [banks’ infrastructure]. This layer becomes commoditised. Unless they take it on the front foot, and explain how they can provide value and services [they are in trouble].”

Tighe spoke of blockchain, and how it has gone from its nascent days doused in fears of “pornography, drugs and crime” as its sole use, to a major opportunity for banks in both the present and the future.

“It’s definitely not a funny sideshow. That underlying technology provides security and trust,” he said.

“It takes a huge amount of data and provides a very simple customer-facing platform. What you can do with that is customers, banks and regulators can interrogate that. We’re at the exploratory stage. You’ve got to be experimenting with these technologies.”

Standing out for the crowd

Lastly, the trio discussed modern lending and funding mechanisms such as crowdfunding, and the role websites like Kickstarter or Indiegogo play in financing a wide range of projects.

Highlighting how artists, musicians and other non-traditional business ideas can now capitalise, Moore felt they provide valuable avenues to raise money previously removed from the grander banking system.

Hazel Moore, co-founder of FirstCapital

Hazel Moore, co-founder of FirstCapital

Added interest

“The thing about crowdfunding platforms is that there are some areas where you can raise money from the crowd where the money was never previously available,” she said.

“Arts, for example, has seen governments cut back funding, so you can motivate a philanthropic angle. The other side is the opportunity for people to potentially generate a better return on their savings. If you’re a saver on crowdfunding, you perhaps get better interest rates.”

The general mood was one of excitement for the future of banking, however, all three were in unison when looking at the position of a bank. If they don’t innovate and embrace the changing world, they will be left behind.

Inspirefest is Silicon Republic’s international event connecting sci-tech professionals passionate about the future of STEM.

All images via Conor McCabe Photography

Gordon Hunt was a journalist with Silicon Republic