Most recently, I’ve been exploring the Future of Retail Banking (upcoming posts will preview the Council’s predictions). Through my work, I learned that it is important to have a firm understanding of today’s realities in order to gain a window into the future. One reality that has become increasingly clear to me is that banking is becoming a social right rather than a privilege. Just see a few examples of “banks” that are bringing a social purpose to financial services:
- Safaricom’s M-PESA – allows rural communities in Africa to access the global payments market through mobile phones.
- Charity Bank – uses 100% of depositors’ savings to support charities, voluntary organizations, and social enterprises.
- Common Good Banks – can be opened by individual communities and are run as a democratic, community based system.
- GreenChoice Bank – has a green mission, offering not just green products, but operating under environmentally sustainable policies.
- Kiva – creates a marketplace for individuals to fund micro-businesses across the world.
- YouthBank UK – finances young people’s good ideas or youth-based community programs.
- Prosper – creates a marketplace to fund loans, similar to securitization, but with greater transparency.
As new innovations in business models and technology allow financial services to overcome economic barriers, the retail banking market will grow at an unprecedented pace.
For decades, banks have fought for their share of a limited “pie.” That “pie” is now growing to include millions of under-banked and under-financed consumers and businesses. Will this opportunity go solely to niche providers?
