Why Banks Have no Chance To Survive
We have seen large IT firms go away (Amdal, Bull, DEC, Nixdorf, Compaq..). We have seen large Airlines go away (PanAm, TWA, SwissAir…). And many other businesses that seemed to be rock solid.
Whether or not Blockchain is the new money transfer technology is not the point. And whether or not online wealth management is better than individual consultancy isn’t the point either. But there are apparently overwhelming forces that can’t make a conventional bank survive.
I can transfer money from my Swiss bank account to my German bank account and then pay an invoice to a Malaysian bank account in less than 60 seconds with PayPal. Doing the same with a conventional bank takes about 3 or more minutes to enter the data and then probably a day to process each transfer leg. And that is only with the high speed banking system in Europe. In the US it will take more than a week. Yes, there are a gazillion arguments about security, governance and countless other reasons – but the consumer just takes the most convenient route – period. Yes, banks could theoretically turn around and build ultra high performing transfer technologies – UNFORTUNATELY the compliance rules and regulations that cover all facets of the banking business plus the absolute gigantic management overhead will still tear down any effort or make it unaffordable.
Wealth Management & other services
My bank is offering a whole range of wealth management services, helps me put my money to work, charges a “nominal” fee and gets me some interest. My individual wealth manager however has access to better opportunities, lower transaction cost, higher returns and lower risk – simply because there is no billion $ management overhead that needs to be served and not hundreds of lawyers and business consultants who regulate the business to death.
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