The Future of Financial Services

BRETT KING

Bank 4.0 and the Future of Financial Services

Brett King is a futurist, an Amazon bestselling author, an award winning speaker, hosts

a globally recognized radio show, is the Founder and Executive Chairman of neo-bank

Moven, and in his spare time enjoys flying as an IFR pilot, scuba diving, motor racing,

gaming and Sci-Fi.

According to him, to remain competitive in today’s fast changing business

environment, it is not enough to just import technologies like AI, blockchain or

smartphones into existing financial services. Banks must reassess their role in their

customers' lives in order to continue in business. King provides a vivid image of how the

Bank 4.0 will be shaped by Jack Ma, robo advice, and quantum computing.

FinTech start-ups and tech giants are redefining how banking fits in the daily life of

consumers and can extract more business value using technologies. i.e. generating

insights and monetizing data of consumption pattern when customer orders milk using

a smart speaker/voice assistant. To survive competition, banks are rushing to develop

new capabilities, new jobs, new products, new services and even new business models

altogether.

King also outlines how the future of banking is built in voice-based smart assistants

such as Alexa and Siri, as well as smart lenses, which will guide you on everyday

spending and money decisions. The coming Bank 4.0 era is one where either your bank

is embedded in your world via tech, or it no longer exists.

Conclusion

Banks and bankers, as illustrated, are deeply embedded in their ways, but just because

something has been done the same way for centuries does not mean it will continue to

be done that way in the future. Whether or not traditional banks can respond to this

challenge is a question of their own existence. However, for the rest of society,

innovations in how we live our lives will drive adoption, potentially putting existing

banks out of business if they are unable to supply the products and services that we, as

customers, desire.

2

1. What does FinTech consist of?

FinTech refers to the use of technology in financial services and procedures, as

well as the automation of those services and operations. It is derived from the

English term "financial technology".

This concept encompasses a large and rapidly expanding industry that serves

both consumers and companies. FinTech companies integrate AI, blockchain

and financial science technologies in the financial sector to make them more

secure, faster and more efficient. It is one of the fastest growing technology

fields. With innovative companies in almost all areas of finance, from payments

and loans to transactions in Forex, stock, cryptocurrencies, etc.

2. What is the relevance of FinTech in banking competition?

As times are changing, banks are being forced to switch to a more

customer-centric banking experience. Banks also need to adapt to better

technologies to deliver their services. Digital solutions that are built by FinTech

companies must aim to change one particular aspect of traditional banking. If

banks don’t utilize new technologies, they are at the risk of losing customers to

institutions that offer better technologies.

Competition from fintech companies is starting to erode the margins of

traditional banking. It is estimated that over the next ten years, as fintech firms

expand into all market segments, they could erode 60 per cent of the profits

that banks generate from retail services. [McKinsey (2017), Retail Banking

Insights, April]

This increased competition in the financial sector benefits customers as they are

always getting better services. All because FinTechs are developing newer

technologies it makes it easier for customers to utilize their banking services.

The banking industry has drastically improved its services by incorporating

innovation into technology.