Recently, Traxpay CEO John Bruggeman was asked to share his thoughts on the future of banking and financial services in his keynote for MoneyConf. Fresh off the back of being named Best CEO in the Financial Technology Industry by European CEO Magazine, John took to the stage to assert that banking was about to experience its biggest moment of disruption for 400 years.
After outlining his front-line role during major tech disruptions such as the “Browser Wars” and “Smart Phone Wars,” John painted a picture regarding the imminent “Banking Wars” by inviting attendees to consider Michelangelo’s Renaissance masterpiece on the Sistine Chapel ceiling. One of the world’s most recognizable works of art, few observers would deny its breathtaking beauty. But, despite the obvious allure, there’s another angle to the famous fresco of 1512.
With artists of the day funded by wealthy patrons, the privilege of viewing paintings like the Sistine Chapel in their original glory was reserved for an elite few. Today, however, accessibility to art is quite different. Citing Banksy’s iconic graffiti artwork as an example, John highlighted how art creation and appreciation has become more easily accessible, and inherently designed to carry a message that is dynamic and timely—real-time—for all, as opposed to a select few.
This dramatic disruption in art is mirrored by the alarming rate at which the world’s biggest businesses are now likely to lose their positions of power. Quoting a recent study, John pointed out that over a 45-year period from 1945-1990, 70% of Fortune 1000 companies managed to maintain their elite status. Over the next 24 years however, from 1990-2014, only 30% of companies held firm on the prestigious Fortune 1000 list. But even more interesting than the past is the projected future.
It is anticipated that only 8% of today’s Fortune 1000 companies will still be classified as such by 2025—making for a ten-year period in which discontinuity and disruption will be further confirmed as the new norm.
With this accelerated state of change in mind, John outlined that the largest banks and providers of services to banks will go through a dramatic shift in the coming years, and that being adaptable is their only shot at remaining relevant. But how exactly should they change to prepare for a future defined by disruption?
The banking industry has operated very much with a rear-view mirror approach. For example, corporates determine expectations and projections due to recent performance and how expenditure and revenue has been managed in the past. But there is another way to proceed, posited John—highlighting driverless cars as an example of technology that relies purely on real-time data and context to determine the best path ahead.
Likewise, the best banking services in 2020—especially in the B2B space—will take advantage of the wealth of dynamic data that businesses are operating with in real-time. Information about how buyers and suppliers are interacting on a relationship level, a business level, and a transaction level, resulting in better business decisions that aren’t bound to the past, but rather shaped and refined by all the available data sources. As businesses continue to demand faster, better ways to work, and technology is ready to meet those needs, an inevitable change in how banking must operate will drive the disruption.
In summing up, John gave his listeners a definition of disruption to take away. Consider, he suggested, that the world’s largest media owner, Facebook, creates no content; The world’s largest transportation company, Uber, doesn’t own any vehicles; And the world’s largest hotelier, Airbnb, doesn’t own a single room.
By 2020 then, it seems reasonable that the world’s largest provider of banking services will own no money. Working out exactly how this shift happens will be the key to the game-changing disruption that is set to overhaul banking.
You can see video footage of John’s talk from MoneyConf 2015 by clicking here, and his full presentation from the day can be downloaded via this link. And check out our Resources page for other videos from the event.