Chris Skinner

For years, banks and industry pundits have bet that cash and bank branches will disappear, yet they are still as strong as ever. Sure, cash and branches are reducing in number, but cash in circulation is still increasing as are the number of bank branches in some countries. So is a branchless, cashless future a reality or a myth?

Over the next decade, a radical shift will take place in the role and function of banking. It’s already started and it’s all about BIG DATA. But it’s more than that. It’s to do with the value shift in society from seeing money to seeing virtual money; from seeing technology to seeing social technology; and from seeing government to seeing self-governance.

These shifts have been seeded in smartphones, social networks and the global linkage of every person on the planet to wireless media, and this shift will accelerate over the next decade. What this means for banks is that they will become hybrid keepers of money and data, and anything else their customers believe to be of value.
They might even be keepers of cloud secure Facebook photo albums … why not?

In previous ages bankers have sometimes pecked lower in the order of society than lepers. Jesus declared their usurious ways immoral. Amazingly, from this disadvantaged position in society, bankers flourished over the past two centuries before imploding spectacularly both financially and socially in 2008. Bankers now don’t even trust each other.

This illuminating review of the history and future of banking and society explores why these former outcasts from high society are natural problem children and ponders whether they have a social future and, if so, what will it look like?

Since PayPal began, we have seen money being digitized. Now mobile is booming, the whole mechanism of money and customer interaction is being revolutionized. Add to this Facebook credits and other virtual currencies, and you soon realize it’s not about money but it’s about value.

Value management in all its forms – money, knowledge, ideas, time, goods, services, trade – is the critical focus for tomorrow’s institutions. And, as value becomes exchanged in all forms of virtual and physical form, money becomes meaningless. What does it mean for you?

Banks are like landmines that explode in economic terms, in a similar way in which landmines explode and blow away people in the real world. Just as landmines blow the legs away from humans, banks blow the legs off economies.

It’s obviously the case that this is true today, what with the Lehmans collapse with Credit Default Swaps creating the first financial crisis; and now sovereign debt in the Eurozone is developing the second.
How can such economic landmines exist in a world where we should have cleared them by now, and how can we avoid them in the future?