Last week’s fintech expo placed the emphasis on apps, AI, APIs and VR. They all point to one thing, says Tim Green, we don’t want people to get in the way of our financial services…
There were a lot of human beings at Money 20/20 last week.
The expo that showcases the banking of tomorrow brought together at least 1,000 of these humanoids. Some of them were even female.
MEF bipeds were there too. We had convened a panel to discuss the personal data economy. In it, we discussed with execs from Axa, Telefonica, Meeco and Barclays, the upsides of sharing personal data responsibly.
The session was one of many that sought to address a single ‘meta’ question: How will digital ideas change financial services?
For the Money 20/20 humans, there was one obvious conclusion.
It will need fewer of them.
Virtually every session confirmed it. There were discussions of AI (robots, not people, to answer your questions), VR (artificial environments, not buildings, in which to make your transactions), APIs (apps, not advisors, to analyse your habits) and so on.
They all screamed the same thing: we don’t want humans intermediaries in our financial lives.
Of course, if you reflect on this for even a moment, it’s obvious. Every time the sector introduces new banking automation, the public leaps on it.
By sweet coincidence, Money 20/20 took place on the 50th anniversary of the world’s first ATM (launched by Barclays Bank in North London in 27 June 1967).
That was the start of the machine invasion. Later came telephone banking, then online and lately apps.
Indeed, another bit of news announced during the show revealed (sorry to be UK centric here) that 19.6 million Brits used banking apps last year, up 11 per cent on 2015.
“When CNBC interviewed former Barclays CEO Antony Jenkins at Money 20/20, he said bank branches will be “as common as a Blockbuster video store in a few years’ time.”
Naturally, these innovations are changing the face of banking. Specifically, branch visits are dying. Industry analyst group CACI estimates the average customer will make just four branch visits a year by 2020.
Really? Which branches?
When CNBC interviewed former Barclays CEO Antony Jenkins at Money 20/20, he said bank branches will be “as common as a Blockbuster video store in a few years’ time”.
It seems inevitable that banking will sideline humans.
But here’s the irony. It will replace them with tech that is as human as we can possibly make it.
Thus, we will give AI names. Like the chat bot that handles your claims when you insure yourself at Lemonade. He is called AI Jim.
And we will flinch from anything that’s obviously robotic. During a session on AI last week, a panellist revealed that people don’t like it when bots answer queries too quickly.
“We flinch from anything that’s obviously robotic…people don’t like it when bots answer queries too quickly. Now, the system shows a little bubble suggesting the robot agent is typing. It’s not.”
Now, the system shows a little bubble suggesting the agent is typing (like in a WhatsApp session). It’s not typing, of course. And the illusion makes the session last longer. But people still prefer it that way.
Obviously, banking automation is a given. There’s no going back to the ‘good old days’ of queuing up at a branch to pay in a cheque.
What no one can be sure about is whether this revolution will change the structure of banking as it has music and newspapers.
One school says yes. It argues that new pure mobile plays like Monzo, Number26 and Starling will simply outsmart the legacy banks.
The rival school says the burden of regulation and trust will prevent people from switching wholesale to new digital services.
After all, you can switch from buying CDs to paying Spotify $10 a month without worrying about losing your life savings. Consumers will not be so cavalier about their bank accounts.
Of course, there is a middle way. Maybe banks will just become the boring recipients of our salaries. But all the clever value-added stuff will be provided by smart fintechs.
Which brings us to the biggest topic of all at Money 20/20: PSD2.
As MEF members will know, the second version of the EU’s Payment Services Directive compels banks to open up their APIs. That means any fintech (with permission from the user) can get access to anyone’s transaction history. That opens up the way for a deluge of new services.
The only limit is the imagination. And this is not something the big banks are known for.
Still, at least imagination is a human quality. It’s one area the bots can’t capture. Yet.
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