Change doesn’t exist anymore – did you notice it is no longer in your pocket?
It has been just over a decade since the iPhone arrived and changed the world. Yes, that sounds dramatic but it is eminently appropriate for a device that turbo charged our move into a digital world of apps, social media, touch interfaces et al and reframed what we now consider a ‘mobile phone’ to be.
The beauty of such a significant consumer technological change is the immediate level of acceptance it achieves. It is almost impossible to now imagine the world without smartphones.
But what about money? Or rather, cold hard cash? Coins have been used as a store of value and trust since ancient times. It is said that the ancient Greek Lydians minted the first coinage for retailing on a large-scale basis around the 6th century BC. But let us fast forward to the present day, the age of the ‘Millennials’. A time when speech is (almost) no longer our primary form of communicating, having (almost) been superseded by instant messaging, Instagram, tweeting and generally viewing the world - and what goes on in all of it - via our timeline(s), resulting in the long-established top-down channels of communication and message control that humans have established over the last few thousand years have been disrupted. So if speech can be disrupted, is it any wonder that, in this age of transformation, physical money is also morphing into digital form?
Contactless payment technology has led the seamless move to the world of non-physical transactions, but do not assume that consumer confidence has developed overnight. As someone who was involved in the delivery of the Oystercard platform in London, we were acutely aware that at the early stage for the technology we had to tread carefully. The system could not fail. A transaction could not be lost. There could be no ‘tears’ between the card and the reader as the data moved between them and above all – we could not wrongly charge anyone. It was 2003 when Oyster went live, but we had run the system in shadow for over a year to build confidence and trust. The result was a system that people adopted with ease and now cannot remember what all the fuss was about. A huge success that laid the foundations for the future of contactless usage in the UK, not because of the technology but because the bond of digital trust had been established.
And now, does anyone pay by cash on any part of the London transport network? The phrase ‘correct fare please’ has been consigned to the lexicon dustbin. We tap, we pay, we move on. And boy have we moved on: we pay via our phones, credit cards have become apps and you can manage your savings, mortgage or business banking from any mobile device, anywhere in the world – with a decent network connection. So what next? It feels like the foundations are in place for the real change to now happen. I have written before (see Digital Vision for London) that we all have created our Citizen Digital Ecosystems; we subscribe for our connectivity, we’ve bought our devices and we have signed up to various social media platforms and retail portals. These, brought together, enable us to buy, surf, eat and consume vast amounts of information or just watch a cat chase a mouse while we commute to work. The point being that the time has come for convergence between the world of financial services and the digital world we live in. The opportunities from ‘Open Banking’, PSD2, challenger banks, cryptocurrencies and the tsunami of innovation that is being driven by vast numbers of FinTechs, means that I feel confident to say that a new age is dawning for money. There will be an even sharper decline, leading to the eventual death, of physical currency. Therefore, the manner of our relationship with our money is radically going to change.
The line between money and data is going to blur as the value of the two commodities becomes entwined. The platform(s) that enable us to visualise, manipulate and make transactions work for us will redefine the services we expect from the organisations that were formally known as ‘banks’. In fact, when our social media platform of choice or favourite shopping portal knows more about us, has earned our trust and is intimate with our spending patterns, surely they will morph into managing, rewarding, advising and growing our finances rather than just trying to separate us from our money. The coin and the note will soon go the way of the Dodo. Welcome to the new world, a world without money as we know it.
Digital Vision for Financial Services
This article is part of the Atos Digital Vision for Financial Services opinion paper. We explore the challenges and opportunities in a newly disrupted space for banks, insurers, FinTechs and technology incubators, who are today experiencing an unprecedented rate of technological and regulatory change.