We have made the argument before that when it comes to mastering the technology required for next-generation payments, the structure of banks doesn’t permit it and the attitude of bankers won’t allow it. Seems that we’re not alone. McKinsey & Company has now come to the identical conclusion.
In a fascinating report, McKinsey’s argues that bank’s technological intransigence-which creates the economic hole that payment facilitators are uniquely qualified to fill-dates back hundreds of years before credit cards. “Banking has historically been one of the business sectors most resistant to disruption by technology. Since the first mortgage was issued in England in the 11th century, banks have built robust businesses with multiple moats: ubiquitous distribution through branches; unique expertise such as credit underwriting underpinned by both data and judgment; even the special status of being regulated institutions that supply credit, the lifeblood of economic growth, and have sovereign insurance for their liabilities (deposits),” the McKinsey report said.