Chris Skinner describes the reason for writing this book in the following words.
“Would you really want your TV to order the next season of Game of Thrones, if the payment took ten days and cost $25 or more to process? Unfortunately with the four-pillar card scheme model and the SWIFT counterparty bank system, that is the problem we face today. As a result, we need an Internet of Value to work with the Internet of Things. The Internet of Value, or ValueWeb for short, allows machines to trade with machines and people with people, anywhere on this planet in real-time and for free. Using a combination of technologies from mobile devices and the bitcoin blockchain, fintech firms are building the ValueWeb. The question then is what this means for financial institutions, governments and citizens?”
— Chris Skinner (@Chris_Skinner) March 12, 2016
The book is in two key parts. The first outlines the challenges faced by the banking industry, and then the second has a series of case studies with relevant FinTech and Banking startups, as well as addressing the Bitcoin debate. Skinner aims to dig deeper in the whole FinTech / Banking debate to look at what trends are likely to emerge, and who the probable beneficiaries will be.
The book manages to offer a fairly comprehensive and well rounded consideration of where nimble innovative FinTech startups may do well, and yet also the advantages that incumbent banks hold, even with all the challenges of trying to maintain expensive, inefficient legacy systems. In a series of well articulated points Skinner sketches out the future prospects for the banking sector in the same way that his FinTech Mafia colleague/rival Brett King recently dealt with a wider evaluation of the future in general (see Augmented review). Traditional banks face massive challenges to remain relevant and desirable among younger audiences. At the same time many banks are run by highly intelligent people who are aware of these potential disconnects. Through a series of well researched examples Skinner illustrates where some banks have attempted to be where their (potential) users are, and offer the services that their intended customers actually want. Through many different examples it is clear those banks that aim to be customer-centric will be the ones that succeed and even thrive.
The future for banks will be in becoming holders of trust and value for customers. Payments will take place through many different methods and mediums, again all to satisfy user needs of being available when and where they want them. It already seems ridiculous to be limited by ‘banking hours’, and so similarly in the future there may need to be massive core changes for all traditional banks if they are to remain relevant and wanted by future generations. Entertainingly Skinner cites a figure that more people prefer going to the dentist than the bank, and certainly in Ireland the banking experience with all major banks have been beyond poor for at least the last three decades if not more.
— Svein Frøystad (@sveinfr) June 13, 2016
Skinner suggests those banks that will survive will be those that completely embrace change and acknowledge that “digital is not a function but a culture” (p231). If you’re a worried banker looking for inspiration then there are certain sections that are probably required reading, pages 238/9 for example list three key barriers to innovation that current banking leadership faces. His points for why the valueweb is like marmite (p245/6) are also good starting points for debate too and to ensure that banks move quickly if they do not want to end up overtaken by the tech giants who are already trying to work out how to move into payments, money and the whole eco-zone of their users.
The case studies section was enjoyable. The first part involved a series of interview with various key players in the Bitcoin sector. Many of these interviewees were keen to separate the hype from the reality with the bitcoin currency, and to move beyond lazy simplistic mantras like ‘bitcoin bad, blockchain good’. These are well worth reading to get a more nuanced and balanced understanding of what may or may not happen, and a potential time scale for it too. The breadth of FinTech and Bank startups helps to convey the range of people, both in traditional and also new companies working to innovate and create solutions for a better, more seamless experience through payments and ultimately life.
Matthias Kroner, Fidor Bank “customer centric banking is something people need and want”
— David J. Maireles (@davidjmaireles) June 14, 2016