CNBC interviewed me a few weeks ago on the question of “trends that could shake up the financial industry.” Over the years, I’ve done thousands of such interviews.
They just ran the resulting article, “4 Trends Changing the Way You Manage Money.“
A couple of key points:
The article observes:
Last year Accenture, a global consulting firm, released a report that peered into the banking sector’s future. It concluded that by 2020, banks could lose 15 percent of their market share to technology companies.
“Who gains in this market share?” asked the authors of the Accenture report. “Digitally oriented disruptors that are far more agile and innovative—the equivalent of speedboats competing against schooners.”
That certainly fits the key theme I’ve been explaining to many of my clients since 2009 — that the pace of innovation in every industry is shifting to Silicon Valley.
My part in the interview? Cash is disappearing. As with any trend, I explained my thoughts on the future by viewing the world through the eyes of my sons:
On a recent kayak trip, Jim Carroll asked his 19- and 20-year-old sons if they had any cash that he could use at the store. Instead of handing over a few bills to the Mississauga, Ontario-based futurist and author, they gave him a blank stare. “They told me they don’t use cash, and that’s huge,” he said. “The next generation doesn’t use money at all.”
According to Carroll, in the future every payment, including credit card purchases, money transfers and business bill payments, will likely be done virtually. “We won’t have credit cards in our pockets,” he said. “Every payment will be done through our mobile devices.”
The global mobile wallet market is expected to grow by 35 percent a year between 2012 and 2017, and mobile payment transactions topped $235 billion by the end of last year, according to Gartner Research.
This has implications for credit card companies, banks and other financial institutions that lend money, issue credit cards and wire cash between countries.
I know everyone is talking about mobile payment, but do folks realize where it is really taking us.
I often challenge my clients to think about the long term, substantive trends that are forever changing every industry. I truly believe one day in the future, cash simply won’t exist in the form that we know it today — bills and coins. The question is when; it’s simply a matter of timing.
And as that comes about, there is going to be a tremendous amount of change and disruption occurring. Fianncial organizations have to be relentlessly focused on innovation and the ingestion of new ideas and technologies if they have any hope of coming out the other side in acceptable shape.