Paying for food with a messaging app. Photo credit: McDonalds.
“We need banking but we don’t need banks anymore,” said Bill Gates two decades ago, predicting the explosion in startups creating web and app-based financial services that we’re seeing right now. With nearly US$11 billion last year invested into so-called fintech startups across Asia, the sector is rivaling online shopping and ride-hailing among the hottest tech arenas.
As this seismic shift takes place, nowhere is it more visible than in China.
If you thought India’s decision to ban 86% of its cash was ambitious, wait until you hear what it may do next.
The head of a government-run policy institute said on Thursday that the country could completely eliminate the need for credit cards, debit cards and ATMs in the next three years by switching to biometric payments.
Amitabh Kant said that even electronic payment methods may be “totally redundant” by 2020. Instead, all Indians will need for transactions is their thumb or eye.
“Each one of us in India will be a walking ATM,” Kant said at the World Economic Forum in Davos. That would represent “the biggest technological leapfrogging ever in the history of mankind,” he added.
Growth in the off-site ATM sector is being driven by banks’ efforts to serve existing clients more cost-effectively, attract new customers and by the expansion of independent ATM deployers.
Cost savings drive off-site ATM expansion
Globally, the share of ATMs located away from bank branches rose to 51% in 2015, according to RBR’s study Global ATM Market and Forecasts to 2021.
RBR found that, faced with rising operating expenses and fewer customers visiting their branches, banks in developed markets are streamlining their branch networks and turning to off-site ATMs as a more cost-efficient customer service channel. In the Netherlands, for example, 900 branches were shut between 2011 and 2015, while the number of off-site ATMs grew by 800.
Off-site ATMs aid financial inclusion
RBR’s study shows that in newer markets too, banks often see ATMs as a less costly alternative to branches. In countries with large rural populations, where it would not be feasible to open a branch in each small town or village, the ATM is often the first and only physical point of contact between banks and their customers. Off-site machines serve as an important tool in efforts to increase financial inclusion and compete for new customers. An example of this is Chile, where the state bank is the largest ATM deployer and has a mandate to reach out to unbanked and underbanked population segments.
The Global War on Cash
The Money Project is an ongoing collaboration between Visual Capitalist and Texas Precious Metals that seeks to use intuitive visualizations to explore the origins, nature, and use of money.
There is a global push by lawmakers to eliminate the use of physical cash around the world. This movement is often referred to as “The War on Cash”, and there are three major players involved:
1. The Initiators
Governments, central banks.
The elimination of cash will make it easier to track all types of transactions – including those made by criminals.
2. The Enemy
Large denominations of bank notes make illegal transactions easier to perform, and increase anonymity.
3. The Crossfire
The coercive elimination of physical cash will have potential repercussions on the economy and social liberties.
The FinTech sector is being shaped by shifting market conditions, new regulations, and changes in consumer demands and behaviors. For the past decade, FinTech companies have moved quickly, forcing incumbents to rethink their core business models and embrace digital innovations.
But now, the FinTech industry is itself maturing and entering a period of rapid change. Companies wondering how they will fit into this new era must first understand the forces that are pushing the changes – writes Miklos Dietz, senior partner at McKinsey, Vinayak HV, partner McKinsey and Gillian Lee, consultant.
While the industry will undoubtedly continue to expand as its customer base grows and investor appetite remains unsated, changes are imminent. Indeed, the very concept of what comprises FinTech will shift. As the industry evolves, it will play a role well beyond financial products and services, individual companies will vie to become undisputed leaders by size and breadth, and ecosystems will develop that have a tight grip on customer loyalty.
You can`t find a branch then simply follow the van!!!
Wema Bank Plc. has gone a step further in making banking convenient for its customers and Nigerians in general by launching a new mobile branch “Wema Bank on Wheels” that will be accessible to everyone in all parts of the country.
The new truck where normal branch services are offered is also fitted with two automated teller machines (ATM), and is powered by solar energy, a feature that won it IBU 2016 Award’s Most Innovative Product.
“At Wema Bank, we are committed to making banking as convenient as it can be for our customers, and we achieve this using technology, while adhering to global best practices,” says Damola Bolodeoku, head of eBusiness at Wema Bank.
Described with four moments of realisation
The cell phone is, in fact, a serial killer.
Cultural or mass behaviour change doesn’t happen overnight. The transition of settling almost every payment you make throughout the day with your plastic card to start forgetting that it exists will certainly take time. But how long? In this post I’m going to introduce four key moments which I think will describe how we gradually experience these changes, where mobile payments will eventually take over our regular use of plastic payment cards.
More than two billion people across the world continue to stay unbanked. One of the biggest reasons for that exclusion is accessibility. In developing countries in particular, low-income groups tend to get left out of the fold because they don’t have access to basic banking services. But now, as simple services like mobile banking have proven to help people transition out of poverty in Africa, organizations are starting to focus on the financial inclusion of vulnerable communities. 2Kuze, a mobile payment solution from Mastercard Labs, is one such initiative that is built for farmers in Kenya.