Community

Thanks for your article, I believe the subject is interesting but should it not be bankers who are discussing these issues rather than IT 'experts' or jounalists? As has been said many times, IT is an enabler for change, the change is not driven by it just as those who have not practised or been brought up as bankers are unlikely to be able to overhall the entire industry which is much bigger than most realise. Yes banking will be different in the future just as medicine, the legal profession and almost anything we care to name will change and largely due to the 'new world of possibilities ahead' you mention. In the case of banking, I believe that we need to keep in mind that banking is a service industry and any rebuilding including new innovation must start from here. Know what the customers needs are and ensure that those needs are met in the best, most efficient, transparent and rewarding way for both individuals, the world economy and our future.

I absolutely agree. Much better to listen and observe the good things banks are doing and how technology can help them rather than all the bad stories and why they should disappear. An innovative finance industry is the best chance we have of reducing poverty and improving global outlook. Sometimes new financial organisations are built from technology, sometimes they are not 'regulated banks' such as person to person lending, crowd funding or microfinance funds but technology is the enabler just as it is for travelling to space. Thank-you technology, lets move forward together.

I could not agree more. I think we need to persuade governments that this can be done. Perhaps through microfinance we could leverage up an initial blocked deposit (grant) with a form of credit interest to demonstrate how a small investment can grow while providing the depositor with other services such as payments etc.

Good to see Fintech working towards helping banks to help the poorest of the poor. As the World Bank study says we can only do that by helping such people to join the global economy with a bank account or at least a method of making payments or maybe through a digital currency.

I agree with Ketharaman and Tejasvi but my point is that the regulatory authorities need to be there behind any new initiatives helping them move forward and ensuring that nobody is squeezed i.e. ethical and social justice must be paramount.

Sounds like a good thing, competition may be as good as regulation?

I think this is the future and that it will help people get back on the credit / economic ladder. However this is not the first time I have seen and heard this model.

May I ask where is the regulation which we now know is paramount to success in the financial world? CRA's are regulated so to me it follows that there should be third party scrutiny and transparency on this development. You mention the CFA but what exacly is their role in all this?

I look forward to hearing your comments / response.

Disappointing to see there are no new posts on this superb article!!

Hi Graham,

Thanks for your response, I quite agree that this is a highly complex topic but there are micro-finance companies already adopting the micro-economy route by joining organisations like 'friendship' in Bangladesh http://www.friendship-bd.org/

I think that we have to get away from ROI being the main driver and look more long term at the global benefits. Maybe we do have to have local governments involved rather than repeating the old mistakes of the recent past. Transactional costs can also be reduced to virtually zero by using digital currencies as I mentioned (there may be other ways including instant payments happening soon).

The answer is definately not easy but I believe there are movements in the right direction and indeed I would like to help keep up the dialogue, educate people and keep up with the experimentation. Perhaps this blog is a step forward?

A great idea but maybe a bit ahead of its time because the first challenge is to reduce the under-banked. Also there is one aspect that bothers me and that is the question of pricing. If we are talking about real inclusion, profit &,worse still, greed should be secondary. Reward may come later and indirectly if we are successful in expanding inclusion of the poorest of the poor within the global economy. Maybe this could be achieved through digital or crypto-currencies effectively bypassing banks. I think this can only succeed through smal inclusive micro-economies and not through an isolated 'big bang'