Banking / Finance

The great rebundling of financial services

There’s much talk of “unbundling” in the industry these days. Bankers are fretting about startups nibbling away at their most profitable customers. New technologies from marketplace lending and robo-adviser platforms to real-time payments and the distributed ledger have the potential to dismantle core areas of our traditional business model, and more critically, connectivity to our customer value proposition. Depending on your point of view, the pace of fintech innovation is unsettling, maybe even terrifying to some. As I’ve long warned, with these changes, there will be blood.
But the reality is that banks unbundled themselves.
As usual, I’m getting a little ahead of myself. Let’s back up a bit. I grew up in Silicon Valley in the 1970s and early1980s, as it was just becoming what it is today. I had friends whose parents worked at companies like Fairchild, IBM and Apple. Like many of my peers, my first experience with financial services was through a passbook savings account housed at my family’s American Savings branch (now, after several mergers, part of JPMorgan Chase). My first “job” was delivering newspapers for the San Mateo Times. I remember riding my bike down to my bank branch several times a month to deposit money into that passbook account. With interest rates just over 6%, getting interest applied to that account was much more than the rounding error it is today.

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