NOCASH was pleased to interview Chris Skinner at the Banking 4.0 conference. Mr Skinner, who is a world-class fintech analyst, shared with us his views on what the banking system might look like in the coming years.
The future of fintech as banks
„They all have potential. The main difference is that banks are product focused while fintechs are focused on customer experience view. From that perspective fintechs have great potential. The issue they have is the customer’s trust. The customer is reluctant to change the financial provider they trust. That’s the challenge. But over time a lot of fintechs will succeed because of that customer focus rather than product focus approach.”
The future of Visa & Mastercard, in the context of a rapid international expansion of the Chinese payments giants
„The Peoples Republic of China said that 45 trillion US Dollars was exchange in 2018 by mobile phones only compared to 200 billion US Dolars in the USA. In 2012 it was almost nothing in China. So in only six years we’ve seen this radical change. Six years from now could we see this radical change in Europe and America? I think so. But is it gonna come from WeChat Pay or Alipay? Probably not. It will come from Visa and Mastercard.”
What will banks look like in 10 years?
„The role of the financial banking institutions in the future is to be life events managers and by life event could be a car accident, could be unemployment, it could be moving home, having a first baby and so on. In those life events what financial institutions should be doing is using open finance and APIs to bring all of the services I need around this life events not just the financial service but maybe the home moving service, the home furnishing service, the home decorating services, everything related to your first home. Or the first child which includes the first nanny you might need, the first maternity duties you might need and so on. There are all brought together by APIs into an exceptional user experience. This is far more than just finance.”
Mr. Skinner also believes that „open banking is becoming more and more a phrase and is not really there yet”. „Open banking is what UK has implemented as a regulation. In Europe we have open API and PSD2. This is not open banking.”
As for the Libra project, the analyst is convinced that „digital currency will be driven by governments and not by technology giants”.
Follow the full interview below to see what Mr. Skinner believes about the objectivity of chatbots as virtual assistants, the reality of the first central bank digital currency and about the banking regulation towards open finance: a PSD3 or a GDPR 2?
„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.”