The headline of this article certainly caught my attention. The idea of an Internet Entrepreneur, who started Facebook in his dorm room at Harvard in 2004, touted as not only a future Central Bank Governor but a World Central Banker would have generated rages of laughter if this idea suggested a mere ten years ago.
With 2 billion Facebook users this idea is no longer far-fetched and I decided to turn to ‘my expert’ for his opinion on whether such a thought is merely an idea or could have some factual gravitas to it.
My expert comes in the form of my 12-year-old son. My expert, perhaps not the most prominent Facebook fan, is well entrenched in the digital world and spends a significant amount of time ‘online’.
I started off by asking him to name some of the banks in South Africa. After some hesitation the only one that came up was Capitec. I probed a bit more and realised that the only reason for Capitec was one of the Youtubers (I guess this is a comparison to the news feeds I follow) mentioned that Capitec ‘was being dumped’ because someone ‘called’ Viceroy had made up some story. The total of my son’s understanding and knowledge of traditional banks.
Why is this so fascinating you may ask?
Because, my children will bank with a GAFA (Google, Apple, Facebook or Amazon)
Over the last decade, the GAFAs have systematically built capabilities in areas such as digital wallets, payments, and digital enablement activities.
These activities, as well as their reputation as the most disruptive firms in the market, have increasingly left many traditional bank executives worried about where the competition of will come.
Barriers to entry in the local banking industry are high and incumbent banks have little incentive to transform their business models. As a result, banks have been slow to fully immerse themselves in services such as WhatsApp, Amazon Alexa, Facebook Messenger and Google Maps as channels of engagement.
The customer experience and expectation will be driven by the ability of a bank to service customers in both the digital and physical spaces. Those that have established Trust amongst the digital generation will have a more significant role in being the Bank of the future!
Who will your children be banking on to serve their financial needs?