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It’s not FinTech vs Bank or CBDC vs Crypto

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I’ve seen a lot of discussions of adversaries. It’s FinTech versus Bank, central bank currencies versus decentralised currencies. The commentary makes it appear like a big battle. I disagree. It’s not a battle or a war. It’s a change to the system based upon progress, development and technology.

For example, I don’t see FinTech replacing banks. I see FinTech adding layers to finance that needed fixing. Some of those layers will replace what old banks did, but it won’t replace old banks. Old banks are still necessary (in case you haven’t noticed, that’s a common theme on my blog).

In a similar way, central banks can issue currencies – CBDCs or, if you prefer, Central Bank Digital Currencies – and they have that mandate. It’s not CBDC versus cryptocurrencies however. It’s all about customer choice and citizen choice.

In other words, when people pitch one against another – it’s FinTech versus Bank and CBDC versus Crypto – they’ve got the wrong position and view. The view should be the customers. What is the customer view? The customer view is essentially what works, who they trust and how they want to live.

It reminds me of a discussion I had with one of the leaders of mPesa, the Kenyan payment system. I asked him how banks compete with mPesa. He answered: they copy what we do and we focus on the customer and not on them.

This is a core point: focus on the customer, not on the competition.

Too often, companies are distracted by dalliances with new entrants and new ideas. They determine that that is where their focus lies, and the aim is to stop the competitor. By moving that dial in that direction, they lose their focus on what the customer needs. And maybe this is the heart of the debate about CBDCs. Central banks want to keep control over money, for obvious reasons, but citizens want to control their exchange mechanisms too. The rise and rise of cryptocurrencies illustrates this. Initially, cryptocurrencies popularity were purely with the libertarians and anti-government groups. Now, they have risen to become mainstream amongst those who no longer trust their government currencies, such as the people in Venezuela and Nigeria, and other migrant workers. It is their choice.

The key here is choice.

It is the customer or citizen’s choice. If people choose to use cryptocurrencies or CBDCs, it’s their choice. If companies decide to use Stripe instead of Adyen, it is their choice. If the investment process is led by eToro or Goldman Sachs, who cares? It’s the customers’ choice.

What this really demands is for companies – start-ups, FinTechs, banks or any provider – to just step back to that outside-in view of what the customer needs. It doesn’t matter what the customer wants – they often don’t know – it’s figuring out what the customer needs. As Steve Jobs said:

Some people say give the customers what they want, but that's not my approach. Our job is to figure out what they're going to want before they do. I think Henry Ford once said, 'If I'd ask customers what they wanted, they would've told me a faster horse.' People don't know what they want until you show it to them. That's why I never rely on market research. Our task is to read things that are not yet on the page.

And, just to reinforce this point …

Chris Skinner Author Avatar

Chris M Skinner

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