Aaron Greenspan: The End of the Banking Era. Recently, Blockbuster Video declared bankruptcy. The news wasn't particularly surprising to anyone who had been following the market for video rentals over the past ten years. Netflix emerged in 1998 with a better, more efficient model for video rentals, and as the speed of broadband internet connections increased throughout America, going to the store, the public library, or even the mailbox to get a movie made progressively little sense. Banks are next. Given current market trends, retail banking as we know it today will no longer exist by 2020. Even by 2015, almost all small retail banks will be struggling, and even some of the large banks will be trying to re-invent themselves as software companies as they are confronted by competition from more agile and technologically adept competitors: the people who make your cell phone.
A number of factors will influence the coming sudden shift away from brick-and-mortar banks. Is Google the best candidate to create a good, customer-focused. Slowly -- and sometimes not so slowly -- the bricks have been giving way to the clicks for the past 15 years. Plenty of formerly unassailable business models have suffered as a result. The tears flowing for these companies, however, have been few outside their own high, stony walls. Users, customers, innovators, seekers -- the majority bottom sections of the social and economic pyramids -- these are the big winners in the many wonderful effects of the Web and Internet. And I for one have the freedom, productivity, choice and empowerment to prove it.
Except in one glaring area: banking. We are by no means done on the disruption front. I have had it with the old financial processes, lack of capability, murky institutions, rips-offs, peonage fees/rates -- and especially attitudes. I have had it with credit cards, banks, mutual fund companies, PayPal, debit cards, MasterCard and Visa. Merchants hate it, users hate it. You want financial industry reform? A few good transactions.