Fully cashless society by 2036
The study of 2,000 U.K. consumers ties in with a London mayoral push for the city to become a financial technology (fintech) hub.
“Financial technology companies will change the nature of money, shake the foundations of central banking and deliver nothing less than a democratic revolution for all who use financial services,” Mark Carney, The Governor of the Bank of England said, in the London & Partners press release for the survey.
MasterCard data indicates contactless spending is up 326 percent, year on year in Britain, the mayor’s release says. Further, worldwide, the number of mobile money service users is expected to hit 1 billion by the end of 2016, researcher Strategy Analytics says in a report.
Londoners are counting the years until cashless technologies take over. A significant three-quarters of the urban dwellers there think bank notes and coins are on the way out.
The people there reckon those traditional instruments will be completely gone in 20 years, according to a survey conducted by London & Partners, a mayor-funded publicity company.
That will mean “20 percent of unique mobile users” will perform some kind of mobile money transaction by the end of 2016, the researcher’s press release says.
Mobile money transactions can include anything from remittances to “airtime top-ups.” An increase in the “integration of payments in social platforms” such as WeChat and Facebook Messenger is part of what’s driving it, says Nitesh Patel of Strategy Analytics.
More excitement in fintech is that U.K. banks are also about to launch “robo-advisors,” the Financial Times (paywall) reported earlier this year.
Unfortunately, robo-advisors aren’t actually robots wandering the financial branches and offices dispensing chirpy advice on how to spend money. They are online form-filling portals that ask a series of questions to automatically advise poorer customers how to invest. They are cheaper (and safer) for advice giving than humans. The institution can pass the savings on while avoiding any mis-selling issues human advisors may have. It could be the beginning of the end for humans in banks.
A bank in Holland is also embracing voice recognition, and others are considering retina scanning.
More new tech from banks is blockchain, a way of using cryptographic ledgers made famous by Bitcoin. At the end of 2015, 42 banks, including Bank of America and Wells Fargo, announced they were exploring how to use the distributed, peer-to-peer database system.
“The technology has the potential to be the ‘new internet’ for financial services,” said William Mougayar of Virtual Capital Ventures in a U.K. Business Insider article.
Banks are becoming virtual, too. FDIC-registered BankMobile considers itself “America’s first no-fee, mobile, tablet and online bank, one with zero physical branches,” according to USA Today, which wrote about the institution in January. Called the “Uber” of banking, the company focuses on millennials. The bank claimed 100,000 customers then. Everything is done via app, and paying bills involves capturing camera images of the bill, USA Today explains.
“Selfie pay” is MasterCard’s biometric fraud fighter. Bank card holders can use a photo of themselves to verify identity when making a mobile payment. The card processor is also testing “voice recognition and cardiac rhythm through a wearable wristband,” it says in a press release.
Goldman strategists also told their clients in December that “the blockchain could disrupt everything,” according to a Financial Times article (paywall).
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