No bank will own the customer or their data in the future, enabling new FinTech-enabled competitors to enter the marketplace, drive down price and offer new services. The coming world of 'open banking' and standardized APIs, mandated by the CMA and others, could transform the banking landscape.
The industry trend towards openness is also inherent in the European Union's (EU) Payment Services Directive (PSD) 2 regulation. This is seeking to open up the marketplace continent-wide and encourage more alternative payment service providers (PSPs). Other such initiatives are evident around the world, driven on by the increasing power and interconnectivity of technology, big data, cloud computing services, and so on.
"Whether it is open APIs, the blockchain or whatever technology catalyst – the direction of travel is clear," said Currency Cloud's Laven. "And yes, it will need appropriate regulation, cyber-security and consumer protections and so on, but the future of the industry is clear."
New communities, operators and services may emerge from an increasingly open and commoditized banking world.
"We recognize that we haven't got all the brains in the world, but also see the trend as an opportunity to use others' innovation," said Damian Richardson, head of innovation and strategic initiatives at RBS, alluding to the desire to collaborate with more nimble start-up technology firms in order to harness their zeal and ideas.
After all, many FinTechs simply want to sell their idea to a bank and many participate in bank-sponsored incubator or accelerator scheme such as Barclays Rise program. ING, RBS and most other banks have their equivalents.
Only a minority of FinTechs possess the scale, customer base and financial expertise needed to compete directly with banks.
As ING's Buitenhek said during the panel debate, "probably only one of two of the smaller FinTechs will survive and avoid being bought out by an incumbent".
"The true winners (of the technology revolution)] could be the technology giants such as Google, Facebook, AliPay or WeChat," added Buitenhek. The latter already has its spin-off online WeBank offering to its social media community, illustrating the potential threat from technology-enabled newcomers to the established banking industry.