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Will banking follow music, movies and books?

Industries are gradually being reinvented via the mobile internet.

Some were more obviously reinvented in the first generation internet, such as music.

Second generation internet is redefining more, from entertainment to news media to financial services.

One thing that’s worth noting however is that it takes years to see these redefinitions occur and for the new business models to emerge.

This is why there were huge worries over Napster, the Pirate Bay and, more recently, Limewire.


But these have all been shut down, taken to court and proven to be flawed.

The business model is gradually redefined as the industry moves from a stable physical world of stores and goods to a stable internet world of websites, apps and downloads.

Sure, there's still illegal downloading of music, but mainstream brands from Apple and Amazon have shown that $0.99 or cheaper per track downloads works and the music industry gets its brands and copyrights back.

Movies are going through the same process of disruption as music, with the Hollywood machine trying hard to stop illegal distribution of new films.

It's working slowly but surely, and will follow the same path as music.

And now the book industry is undergoing the same process, thanks to Kindle and iPad.

As eBooks take off, illegal distribution is a key issue but it's a transient process of redefinition of the business model.

Due to the reformation of such business models during this period, it’s like a Wild West for a while.

Everyone is gunning for each other and trying to shoot down the new boys on the block.

But gradually things do settle down.

The music, movie and book industries may be unhappy about illegal downloading but they are happier about legal websites such as iTunes and Amazon.

Equally, subscription sites are appearing regularly, such as Spotify’s new premium service, which also adds grist to the mill of the copyright machine.

So, over time, business models are redefined and what was a Wild West becomes a New Frontier.

These New Frontiers are being defined today, particularly for industries reliant upon a product that can be digitised and downloaded such as music, movies and books.

So what about banking?

Banking is digitised.

Banking is just bits and bytes of data.

Why isn’t banking redefined in the same way as music, movies and books?

The answer is that it will be, but it’s taking longer.

It’s taking longer because banking has far more protective rights than music, movies and books.

After all, if you lose a CD, DVD or book, it’s not a big issue.

Annoying yes, but not a major problem.

Lost your bank account and that’s a real issue.

So yes, it’s taking longer as the sheriffs try to stop a Wild West of Banking … but they are failing as a New Frontier does seem to be happening.

As mobile carriers, tech giants, new upstarts and innovative incumbents begin to grasp the change that mobile internet delivers, things are changing.

Every day now, I’m retweeting and blogging about Google, Apple, Square, PayPal, M-PESA and more as traditional players find these new entrants redefining the models of banking.

Does this mean we are in a Wild West of Banking?

Absolutely not.

Banking licences and protectionism means we will never enter a Wild West.

But we are in a reformation period.

That’s what we’re talking about with banking today.

A Banking Reformation.

Roll on the New Frontier of Banking as the Reformation takes hold.


About Chris M Skinner

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.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…

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