22 October 2017
Elizabeth Lumley
Elizabeth Lumley

Elizabeth Lumley

Elizabeth Lumley - Girl, Disrupted

165Posts 690,302Views 173Comments
Finextra community

Disruption in Retail Banking

Growth in internet and mobile technologies has transformed many industries and economies. The market forces and competitive landscape has completely changed in many sectors. iTunes has fundamentally changed music industry, Amazon has driven most big brick and mortar book sellers out of business, Expedia is one of the worlds' biggest travel company….. the list goes on. Internet and mobile technologies are big disrupters for most industries. What started (and tapered a bit!) with the dot com boom of 2000 has become a lethal threat to most business models today. Powered by mass adoption in mobiles phones, proliferation of smart phones and cheaper band-width, internet and mobile technology have changed many industries. The banking industry in has been dominated by a handful of big global or regional banks for 100s of years. While the credit crisis has shaken this industry, the core market forces for the industry have not changed. Will Innovation in Internet and Mobile technologies disrupt retail banking? Will there be 5 new names in global top 10 retail banks in 2020?
A post relating to this item from Finextra:

Anarchists, idealists and capitalists struggle for bitcoin's soul

03 July 2013  |  11368 views  |  0
bitcoin1.jpg
Anarcho-libertarians were thin on the ground at the Bitcoin London event yesterday, as the suits took over Level 39 in Canary Wharf to talk about building businesses, attracting venture capital invest...

Where bitcoin is going, there will be banks

04 July 2013  |  7879 views  |  0

I've been to a fair amount of FinTech, financial services and payments conferences in my time. I once sat through one where an old man in a badly fitting suit read passages from the Payments Services Directive...line by line...(I still have flashbacks).

However, outside of the non-stop party that is European banking regulations, nothing screams FinTech circle jerk like a conference aimed at disrupters. You know the ones I'm talking about. Easily sniffed out on Twitter, look out for hashtags like #screwyoubankers and follow the over the top bromance Tweets like:

@PaymentsNinja rockin' the stage at #screwyoubankers!

@salariedITtype Oh man, wish I could be at #screwyoubankers! Keep up the Tweets guys!

@ImNotaBankButIPlayOneOnTwitter Today we saw the meteorites at #screwyoubankers. The dinosaurs won't know what hit them.

Fast forward a year and those same 'cool kids' who were predicting the 'total destruction of traditional banking' are now sitting on stage bitterly complaining (or mansplaining - ta Jezabel) that those pesky banking regulations (especially US ones) are 'killing innovation' and making it impossible for new (sorta) banking entrants to take over the market. And my personal favourite (and an actual quote) "international payments are complicated!"

I can see Edmund Hillary now, standing at the base of Mt Everest. "This mountain is just too high; it really puts off us mountaineers." 

So, back to my point. I attended Bitcoin London this week. I braced myself for a wave of earnest young men dressed like half the guys who worked at my college radio station in 1990 and grey-haired former hippies sporting jeans with 32 inch waists on a 38 inch body (because THAT shows you don't work for da man).

I waited for passionate speeches talking about how bitcoin transcends governments, circumvents the Axis of Evil (high street banks) and predicting how our children will look up at our wrinkled faces to ask 'What's an IBAN number, Mummy?'

While there were a few lads sporting cardigans as well as a high beard quotient, I really need to say...(wait a minute I need to take a deep breath...ok)...Bitcoin London was not a #screwyou... type of conference. 

The chat started at breakfast.

Bitcoin entrepreneur: "We started the first bitcoin exchange in Brazil." 

Me: 'Oh that must be important given the political unrest happening now in Brazil."

Bitcoin entrepreneur: "Ya...but we're focused on gaming sites now..."

Oh, so you're not sending bitcoins to 'Where in the world is... Edward Snowden?' then? Not enough profit margin in it for you? 

Now, listen I'm not waving the flag for a Gordon Gecko-style 'Greed is good' bitcoin revolution. I'm just not surprised when profit and money trumps anarcho-libertarian, cosmic war-type utopian posturing.

Another bitcoin 'business' that many were loath to get into at the event was the decentralised digital currency's role in those other profit-making activities - drug trafficking and money laundering. This was a conference for people with 'legitimate businesses' (no irony, please)

Stefan Thomas, CTO of Ripple, admitted on stage that he once lost 7,000 bitcoins due to poor back up (that was $200k worth of bitcoin at the time, if you're wondering). He also spoke of bitcoin's problems with fraud and 'irreversibility' and how that issue needed to be addressed. 

In this Finextra video Thomas even says that banks, are *shock horror* "reliable, trusted institutions", and have an important role to play in the bitcoin economy, especially in opening it up to less technical users. 

Holy digital currency, Man of Steel, this guy is a bitcoin evangelist and he just called banks 'reliable, trusted institutions'. (I had to have a cookie after that)

Constance Choi, a lawyer with Payward, who knows a thing or two about working with FinCEN and the US Treasury in the US shed some home truths on the panel looking at regulation and compliance issues for bitcoin businesses. She stated that the industry was not going to get any special treatment from government regulators, because 'we just aren’t special enough, yet.'

"The US Treasury's attitude is that 'these are the regulations [that bitcoin constitutes money transmission and therefore needs to comply with AML legislation] and it is up to us as an industry to deal with that." 

You can sit on a panel in a cosy room in London and complain about regulations or you can stay on the pot and make do. The world is run by people that 'do'. 

The rest of the day was peppered with entrepreneurs saying that the fledging bitcoin industry doesn't need VC cash, what they need is advice on how to run, 'real, grown-up businesses'. No one mentioned anarchists (except in disparaging terms), no one pondered on the drug trade (expect to say that the media seemed to fixated on it). 

Shakil Khan, angel investor and founder of Coindesk described three types of bitcoin enthusiasts: the anarchist, the idealist and the capitalist. 

There are those that would call themselves 'idealists' at Level 39 in Canary Wharf on July 2nd. But they shouldn't kid themselves. The room was dominated by 'capitalists'. The one institution capitalists need more than anything else is banks.

When bitcoin goes mainstream...there will be banks.

You can follow the Tweets from #btclondon in the Storfiy here.

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job title Global FinTech Commentator
location Crayford
member since 2009
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Global FinTech commentator. Author of the Girl, Disrupted blog

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