Whether it’s cryptocurrencies, blockchain, AI or machine learning technological platforms, even the use of quantum computing, the banking sector is having to contend with fintech companies and new technologies that are completely transforming the competitive environment.
Among consumers who are looking to move to a new primary financial institution, as many as 60 per cent have said they are open to the idea of looking at Big-Tech firms such as Google, Amazon, Facebook or Apple.
The news that Facebook is to launch its own digital currency called Libra could be a game changer, making it possible for its billions of users to make financial transactions across the globe.
It has the potential to completely change the world’s banking system.
US lawmakers, however, have been quick to raise privacy concerns about the currency and the congresswoman and chair of the House Financial Services Committee, Maxine Waters, has called on the company to put a stop to the project until Congress and regulators can review it.
“Facebook has data on billions of people and has repeatedly shown a disregard for the protection and careful use of this data,” Waters said in a statement. “With the announcement that it plans to create a cryptocurrency, Facebook is continuing its unchecked expansion and extending its reach into the lives of its users.”
How will Facebook use financial data to profile and target consumers? At the end of the day its move into financial services isn’t about banking or the control of finance, but rather the control of data. And its record, in selling people’s data without permission, should worry people. But will it?
Whatever its reasons for launching this new currency Facebook’s move provides another example of how traditional banking is changing.
Cryptocurrencies and fintech solutions are taking business away from banks and where Facebook leads, inevitably, others will follow.
All told we are seeing a revolution in how people access, manage and use money. Is banking, as we have known it, now coming to an end?
