Bank 4.0

Bank 4.0 tells the story of how banking and FinTech have evolved and developed over the years, and also predicts future trends. In essence, banks need to move past the concept of traditional branches, and evolve towards a completely digital space, in which FinTech companies will manage the bulk of online banking.

Today’s banking system no longer works, and if it continues to focus on how to improve traditional banking models, it will never evolve. According to the author, bank managers need to change their approach, because technology is adapting in real time and before our very eyes; our mobile phones already dominate practically every single aspect of our lives. Simply digitising forms on a website is not enough, because this still requires customers who are applying for a mortgage, to sign forms and papers. 

This approach is based on the idea that ‘this is just the way things have always been done’, and therefore implies an outcome that improves the starting model, but only in small incremental changes. Author Brett King advocates a more disruptive philosophy, and compares modern payment networks to those of the Templars in the 12th century. In order to achieve new, unconventional objectives, we have to carry out a total reset, and start again from scratch. 

Elon Musk created SpaceX not just to send humankind to the Moon again, but with the aim of travelling to Mars. He based his designs on new rocket models, rather than improving on those built over the last fifty years, in an attempt to reduce the cost of going into orbit by 90%.

Steve Jobs, on the other hand, revolutionised the very concept of the telephone when he invented the iPhone, which combined an iPod, a browser, multitasking applications, and a phone in one single device. Instead of trying to improve on the Nokia and Blackberry models, he started from scratch, and came up with a touchscreen design. 

Putting first principles into actual practice requires a vision, and banking is no different. In the not so distant future, we will all do our banking everywhere except in banks, because we will no longer need physical branches, not even to meet with bank managers to twist their arm for better interest rates.