The future significance of banks in society is in the hands of millenials, an audience at Cass Business School heard last week. Cass Entrepreneurs Network hosted a fintech event, entitled “Unbundling the Bank” on April 9th (in conjunction with Chinwag) to discuss disruption in the banking sector.
An expert panel, chaired by Ben Rooney (Co-Editor-in-Chief of tech news site Informilo), debated whether financial innovation is likely to be driven by the banks, start-ups, or through partnerships between them.
The panel agreed that the output of banks’ on-going digital transformation will depend on the extent to which they are seen as trusted by both millennials and, crucially, regulators.
They questioned the extent to which the existing fintech industry has disrupted the rails on which current banking infrastructure sits. However, it was pointed out that recently-announced regulatory requirements for UK/European banks to provide open access to customer accounts through application program interfaces (APIs) may finally lead to true unbundling – a technological response to regulatory pressure.
Dave Birch, founding director of Consult Hyperion, said: “Banks aren’t a place where you store your money, but should be a place where you store your identity.”
Digital technology will make innovation cheaper, easier and likely to happen faster said Gianvito Lanzolla, Professor of Strategy at Cass. However, he argued that new value curves in financial service markets leveraging a network effect are still likely to lead to one dominant player and a “long tail” of companies that find it hard to scale.