{"id":51382,"date":"2019-01-14T19:11:00","date_gmt":"2022-10-18T19:11:52","guid":{"rendered":"https:\/\/www.salesforce.com\/?p=51382"},"modified":"2022-11-01T16:48:01","modified_gmt":"2022-11-01T23:48:01","slug":"the-future-of-banking","status":"publish","type":"post","link":"https:\/\/www.salesforce.com\/au\/blog\/the-future-of-banking\/","title":{"rendered":"The future of banking"},"content":{"rendered":"\n

The future of banking is built on digital platforms, and customer trust will be gained through digital experiences. Brett King, author of Bank 4.0, shared his insights into how banks and finservs can win customer trust without a building, branch or ATM in sight.<\/p>\n\n\n\n

If you look at the most disruptive innovations historically, they have all tended to use a similar design principle. It\u2019s known as \u2018first principles design thinking\u2019, and it basically means tearing things all the way down and looking at the problem afresh, based on new technology. It means an entire rethink of an industry.<\/p>\n\n\n\n

A couple of good examples include the automobile, which replaced horse and cart, and which caused a rethink of how transportation should work. The iPhone was another completely new platform and, as a result, every phone now looks like an iPhone. It changed the way people thought about mobile technology.<\/p>\n\n\n\n

If you look at banking, what we\u2019re seeing right now is strong evidence of first principles design thinking. We have the ability to deliver banking when and where it is needed in real time. What we don\u2019t need is product structures and the distribution mechanism those products require, particularly the bank branch.<\/p>\n\n\n\n

You don\u2019t need a plastic card to buy your groceries, you don\u2019t need a 16-digit number and you don\u2019t need the application process.\u00a0If your bank knows you well enough and uses AI, then when you walk into a grocery store it knows if you\u2019ve got enough cash to buy your groceries. If you don\u2019t, it can send you a message: \u2018We can solve this problem for you\u2019. And it can do that in real time. You no longer need any of the structures or constructs around how people have conventionally solved such a problem.<\/p>\n\n\n\n

A new definition of banks<\/h2>\n\n\n\n

We\u2019re seeing a reimagining of the way banking is embedded into our world via technology. There\u2019s a quote attributed to Bill Gates: \u2018Banking is necessary, banks are not\u2019. Passbooks and ATMs and debit cards \u2013 once the core of interactions with banks \u2013 are going to become digital artefacts. There will be something in the cloud that stores your money and that can, via AI, give you advice on the best way to use your money<\/a>.<\/p>\n\n\n\n

By 2025, most people will have an e-wallet or a value store on their phone that they use day-to-day for banking. It will not have been issued from a bank, it will instead be from a technology company, or a mobile provider. These already exist \u2013 look at WeChat and AliPay in China, or M-Pesa in Kenya. Many of the potential billions of people using these services have never visited a bank.<\/p>\n\n\n\n

Ten years ago, we considered the Australian banking sector to be quite advanced; they were early with mobile and so forth. But today, when we want to look at the most advanced application of technology in financial services we look to China, where 98 per cent of mobile payments are completed across TenCent (WeChat) and Ant Financial (AliPay).<\/p>\n\n\n