The online edition of “Bankovskoye Obozreniye” magazine has published the lecture on transformation of banks in digital age, which Chairman of Financial Services Club Chris Skinner read at the annual forum Finopolis 2019.

Banks.am presents the most noteworthy remarks from Skinner’s lecture.

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Bill Gates said in the early 1990s that “we need banking but we don’t need banks anymore”. He was wrong.

It turns out we still need the banks, just not the type we had back then. Like many tech people, Bill Gates was slightly naïve in financial matters and had a somewhat simplified worldview. Yes, we no longer need banks to make payments. We don’t need banks in borrowing either. We don’t need them even for investment.    

What we need the banks for is translation of trust, because they are trusted service providers and vital elements of the entire system of financial trust. Banks obtain licenses and operate under strict supervision of regulators and governments. That is why they are trusted. In our world, banks perform as trusted mediators and carriers of trust between all.

Unfortunately, banks are often very ineffective at it, building the physical infrastructure the way they did years and years ago.

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Not many things can surprise me now, but whenever I work with fintech, I am stunned at how well you can combine finance and technologies. Fintech was born around ten years ago. Nowadays, we have thousands of fintech companies based on innovative ideas. Many of them raise billions and change completely our concept of financial services.


Figures can help understand the scale of this phenomenon, fintech. Investments in the global fintech market exceeded USD 111.8bn in 2018 against USD 50.8 in 2017. The growth made 120% in the span of a year. More than 12,000 startups raised funds and 40 “unicorns” matured over that time. Naturally, the bankers see that and try to respond, but still the experts insist that the financial industry is not at its most effective.

Banks need to stop being commonplace aggregators and controllers of financial services; they need to stop “doing everything for everyone”. Now, the banks have to become partners for companies that operate in one specific area of business and do it really well.

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Startups and fintech are a good thing. The bad part is that they have no history or capital. The so-called Big Tech - the large technological companies - has both. But the Big Tech does not move into finance beyond processing payments. It is advancing faster than banks. Regulations and compliance won’t let Big Tech use its speed advantage over banks. The other stop factor, as we can see lately, is that Big Tech has no reason to compete with banks, which are its largest source of profit.

Why dig your own grave? It makes much more sense to establish partnerships, provided that banks transform and stop viewing digitization as nothing more than a process or a project.

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