Would it really?
I’ve only skimmed the article but I can see there being less brick and mortar banks. Since I went full Monzo well over a year ago I’ve not stepped foot in one and the reason for going #fullmonzo was all the cool features that help me manage my finances better.
Even when I wanted a loan I used a price comparison site and while I ended up using a legacy bank, I did the whole thing online.
So to conclude I agree, legacy banks certainly should take note of these fintech companies and start transitioning soon if they want to survive.
There is definitely a battle going on in the High Street between those, mostly of older generations, who want actual bank branches to visit, and campaign vociferously when banks close the last branch in the town, and the (probably) younger generations who are perfectly at home never setting foot in a bank.
Inevitably, the latter will win as the former group simply die off, with the Post Office (or just PayPoint corner shops) picking up the slack for cash handling. Even cards won’t need to be produced instantly in–branch as we become accustomed to loading up Apple or G Pay when an account is opened.
Indeed, if Tom’s long term vision comes true, we won’t even have ‘accounts’ and Monzo won’t be a ‘bank’ for ever.
“If a bank really wants to be in a certain business, it can dominate a fintech company every single day because it has lower cost of funds and can afford to pay more per customer”
I’m not too convinced by this…
a) Monzo’s cost base is a fraction of the big banks, this is arguably more important than a low cost of funds
b) Users don’t only switch because they are paid (e.g. brand)
c) Monzo’s tech enables it to do certain thing the other bank can’t do