We got into another fine debate this week about bank disintermediation, a term used liberally throughout the 1990s and early 2000s when Web 1.0 came around, and then was dropped just as fast.
Disintermediation – taking the bank out of the customer delivery cycle and displacing it with a new provider.
As if that could happen.
We thought it might happen a decade ago and a decade later, nothing’s changed.
Sure, we have more banks competing with each other through these channels but Netscape, Intuit or Microsoft opening a pucker bank has not happened. Even Virgin and Tesco's threat of disintermediating the banks has failed.
Sure, we now have bank net and mobile channels, but there is no big new bank anywhere in the world.
Sure, there’s PayPal, but PayPal is just a layer on top of the old system. They’ve not replaced anything.
Maybe I’m just being a realist, but banks don’t need to worry a jot about the new payment providers.
PayPal will never be a serious player: Visa and MasterCard will crush them.
The threat of a BT or Earthport offering a secure transaction alternative to SWIFT is just a fallacy.
And the idea of Google, Facebook, Amazon, Apple or any of those guys becoming a serious contender in the financial servicing space is just smoking dope. They’re not in that space. They’re search engines and IT shops, not financial servicing processors.
As Nancy Pierce from HSBC put it yesterday: “we will absolutely not be disintermediated … who’s better to move the money than the banks?”
Or as Mark Buitenhek of ING put it: “banks need to reinvent themselves as they will be disintermediated by other banks, because we are the only ones that are trusted for secure transaction processing.”
So, for all my bleating about change and new entrants, don’t worry about them.
They are irrelevant.
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...