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Shaping the future of finance

Old bank fears of regulators is opening massive new markets to their challengers

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I’ve just been through a very strange process with my main personal bank account provider who, thanks to fear of FCA and crypto, noticed that I had regular payments in and out of my account to Coinbase. During 2023, they decided that Coinbase and crypto is no good, and so they rang me to discuss it. The call was shaded in context, asking about many transactions in general but, after twenty minutes, focused upon those Coinbase transactions.

The result of that call is that I felt estranged from my bank of ten years, harassed and humiliated. In fact, it made me jump up and start to search for alternative bank providers that are crypto-friendly, with the first two on the list being Revolut and Monzo. Revolut still have no bank account offer in the UK – long story - but Monzo is fine. I already had an account and full account switching can be achieved within seven days with the account switching service rules in the UK.

So, I switched.

It’s a shame because I liked my old bank, but this experience made me realise that many people will be going through the same thing. I’ve seen this everywhere, from Monzo to NatWest, so no one is perfect. Nevertheless, because of risk and regulation, if a bank implements processes that alienate their customers to comply, is that a good thing? I think it’s not. Banks should be listening to their customers, not distancing them.

It also opens a huge market opportunity for the fintech firms, many of whom are crypto-friendly. If old guard banks are crypto hating and the new banks are crypto loving, which do you think will win?

There is a clear opportunity for the new banks. 1 in 10 UK consumers trade in crypto, according to the UK Government, and those figures rise massively in other markets where, for example, over 20% of the Vietnamese citizens trade in crypto.

For me, it is just another indictment of old management thinking. Sure, I get the fact that old management don’t trust crypto but guys, it’s been around over a decade now, it has billions of dollars invested and many of your customers like it. That’s the reason why it has forced the hand of the SEC to concede to market pressure and allow Exchange Traded Funds (ETFs) that include bitcoin as an asset class.

In fact, a bit like my post about VC funding drying up means that fintech funding dries up leading to hard times, the same is true with crypto. If investors want crypto and markets won’t give it to them, they’ll go elsewhere, which is why markets acquiesce to the crypto demands. That’s why Blackrock, Fidelity and Invesco forced the SEC’s hand to allow crypto assets in their portfolios. It’s not because they want it. It’s because their investors want it.

Question: Will BlackRock Surpass MicroStrategy in Bitcoin Holdings?

Answer: Yes!

Meantime, as I write this, I’d read another thread this morning about customer focus using Sam Walton, founder of Wal*Mart, as the example. There was a customer who attempted to return a defective riding lawn mower at a Wal-Mart store with no receipt of purchase. The manager of the store refused to exchange or take back the lawn mower, so the customer made a call to Wal-Mart’s headquarters. That same day, the manager of the store received a call from Sam Walton. Sam told the manager to select the best riding lawn mower in the store and personally deliver it to the customer’s home. Sam wrapped up the call by saying, “…and while you’re there, mow his lawn.”

Customer obsession works. If your customers are obsessed with crypto, why are you telling them not to be?

Chris Skinner Author Avatar

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...

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