NOCASH was pleased to interview Brett King at the Banking 4.0 conference. Mr King, who is a world-class fintech futurist, shared with us his views on what the banking system might look like in the coming years.
WeChat has been able to get almost 200 mil. clients in less than 5 years. We started the interview by asking King why we cannot replicate that in Europe?
From the mobile payments perspective, in Europe, we try to put the plastic in the mobile phone. „But in China they completely run around the system. You don’t need a Point Of Sale, you don’t need a plastic card, you don’t need the signature. As a merchant, all you need is a QR code to accept the payment. Basically, they skip the tokenisation process. As a result, they have been able to scale much faster network effect has been a lot stronger.” …
Another reason is that in the West „we don’t have this Person to Person culture around mobile payments that they have in China. If you missed that P2P element, and you don’t use the networking effect of the phone than you won’t scale faster”.
We like it or not, China is coming over. Brett King predicts that by 2030 most of the world will be on Chinese mobile wallets. He also believes that international payments scheme like Visa or Mastercard won’t disappear but they will be marginalized.
„Visa and Mastercard can still be relevant for the future but they have to change from being about tokenisation of a card to becoming data companies. (…) First thing they have to do is to get rid of POS restriction. If you need a physical POS to be able to transact you cannot scale at the same rate that the competitors from Chinese mobile wallets are putting in. So this is what I would looking to see for to survive.”
In this digital transformation process/journey from banking products to banking experiences, do you think we still gonna loose more branches or just some banking departments? Furthermore, what we will call bank in 2030?
„We had grown up with the bank being a place that we use to go visit but since 2008, we have seen a steady decline in branches. In the US is 2 to 3 percent a year but in some other economies it is been faster. (…) I don’t think that we will identify a bank like that in the future. Banking will be something predominantly technology based. Your primary banking relationship will be on your phone. That maybe a bank behind that, so a bank brand, or maybe you don’t know who your bank is. It could be Google, Apple, Facebook, Amazon or Alibaba.”
Now we can ask Alexa or Siri to help us in various ways, including for bill payments. We asked Brett King when he thoughts we could simply ask to virtual assistants to change our bank (account). „In about three years.”, he said.
See the full interview below to find out many other details related to subjects like why Mr. King believes that the mobile phone is the most effective channel to tackle the financial inclusion and who will be the biggest bank in the world in the coming years?
„Though Libra has met with fierce resistance from central banks and supervisory authorities and might never see the light of day, in many other cases tech firms (both start-ups and established big players) have successfully captured bits and pieces of universal banks’ traditional value chain. This trend may only intensify in the coming years. In this environment, European banks remain squeezed.”