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@BrettKing: "There are two types...too late"

Yeah right. That only leaves only investment banks who go laughing all the way to the bank by placing bets on both sides. Anyway, the point is moot: Both categories will soon be "Disrupted to Death" when all companies will be mandatorily disrupted in 18 years, with investment banks once again making big fees to shut down existing companies and form new companies. I've been reading Stanley Bing's While You Were Out column in FORTUNE for nearly 20 years. While they're always funny, his predictions are right more often than wrong, so I wouldn't write this off. 

@BrettKing: "Katharaman, Given that...hard enough...BK"

TY for the honor but I didn't say anything about head of technology etc. I called out your predictions about disruption of cash, plastic and branch. That too, after the previous commenter called out your (misspelled) name. Cash, plastic and branch are still around. Ergo, no disruption. In fact, cash in circulation is growing at 7% per year (Source: BBC).  

Anything can happen in future:

Many ecommerce companies have opened brick-and-mortar stores e.g. Warby Parker (USA), Flipkart (India). Even Amazon just opened a physical store in USA. Brick-and-mortar retailers like TJX and Ross Stores (USA) have announced massive expansion of their physical store networks. Who knows what banks will do about their branch networks when they study the rationale for the actions of retailers, the harbingers of digital commerce?   

There's a sharp drop in the use of Apple Pay on Black Friday this year compared to last year. Who knows if it will be around a few years from now or join the long list of other mobile wallets that have really been disrupted aka died in the last 2-3 years e.g. ISIS, Yapital, etc.? (Source: Bloomberg)

Somebody asked a related question on Twitter yesterday. Let me simply copy-paste my reply:

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Ron Shevlin ‏@rshevlin Dec 17
There's a growing trend of bank execs who talk about disruption and "uberization" but do nothing about it in their own banks.

GTM360 ‏@GTM360 Dec 17
@rshevlin My guess: They're angling for plum jobs in hot, well-funded fintech startups!

Ron Shevlin ‏@rshevlin
@GTM360 I think you're absolutely right.

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When it comes to this dumb pipe - intelligent pipe debate, it all depends on how a bank wants to define its remit. To illustrate my point with an example: Should a bank stop at giving a loan to a builder (which is a 5% margin relatively dumb business) or actually build the world's tallest building with that money (which can perhaps yield 30% margin and is certainly a more glamorous business). I know some bank execs who favor the first option and some other bank execs who favor the second option. For the sake of argument, I've taken regulation out of this equation.

To play a bit loose with an aphorism, it's not as though banks are queuing up in front of the soup kitchen. With whatever boundary they've set for their remits, they're extremely profitable:  

• Financial services was the most profitable sector in FORTUNE GLOBAL 500 in 2013: http://ow.ly/d/3qCc

• Finserv continues to be a very profitable sector. 6 out of 10 most profitable FORTUNE GLOBAL 500 corporations in 2015 are banks. https://twitter.com/GTM360/status/642284454409584641

Neobanks can chant their disruption mantra all they want but their music will stop overnight if their VC funding dries up or if banks cut off their access to banking rails.

Several wannabe-disruptors eat humble pieIn this WSJ article (http://www.wsj.com/article_email/banks-and-fintech-firms-relationship-status-its-complicated-1447842603-lMyQjAxMTA1MzE5ODYxNzg4Wj) e.g. “Time humbles you,” said Ben Milne, co-founder of Dwolla, .... Working with banks, he says, is the difference between running a sustainable business and “just another venture-funded experiment.”

I'm sensing a common belief that use of mobile banking, PayPal, SQUARE, ApplePay, etc. means disruption. I totally disagree. As I've explained in my comment on the other Finextra article (http://qwt.io/s_ketharaman/vi8Q), these PSPs increase revenues of banks.  

Since most fintechs use banking rails, they're dependent upon banks for their own survival. On the other hand, banks can shut down fintechs by simply cutting off their access to the banking rails.

None of this sounds like disruption of banks by fintech. In fact, all of this points to a mutually-beneficial partnership between banks and fintech in which banks clearly have the upper hand.

Who is Bret King? Is he the same Brett King who predicted several years ago that cash, plastic and branch will all be dead by now? The last time I checked, which was about one minute ago, they are all alive and kicking. Despite that, if you want to still read such stuff, suit yourself but I'll stay with my own reading list, thank you.

PayPal, Starbucks, ApplePay - and Square, which you've missed out but is often quoted in the same breadth as the others - none of them has disrupted banks. On the contrary, all of them have helped boost revenues of banks. They helped merchants otherwise accepting only cash to start accepting card payments. Banks gained a new source of interchange revenues. In other words, they act as agents / resellers of banks. And, as is common in all industries, they earn a certain commission for that. Nobody thinks of that as undermining the principle's revenues and profits. Take IBM for example. It has a large network of channel partners who sell its hardware and software. When a partner wins a deal and earns a commission for that, certainly IBM's own revenues come down. But does that mean channel partners are disrupting IBM? 

And, let's not forget, all these PSPs use banking rails and banks can shut them down at a moment's notice. 

While you're free to have your own reading list, I've written about these points in my following blog posts:

1. Hiding Your Secret Sauce
2. Apple Puts Banks Squarely At The Center Of Mobile Payments
3. Mobile Wallet Has Few Takers - Even At Starbucks

Regulatory costs force loss-making Tungsten out of banking

Let this be a warning to all wannabe-disruptor finsurgents. It wasn't too long ago when Tungsten used to threaten to disrupt banks in the cash management and trade finance business.

Between my family and company, I have over 10 mobile phone connections across 3 TELCOs, say A, B and C. Lately, I rarely visit their stores to pay bills - HDFC Bank's PayZapp Ends My Bill Payment Woes - but when I do visit them, I see customers of TELCO B and C wanting to switch to TELCO A, customers of TELCO A and C wanting to switch to TELCO B, and so on (Under Mobile Number Portability procedure, physical visit to the destination TELCO is mandatory). 

The point of this story is this: If bank account portability were implemented, I predict the same consumer behavior.

Ergo, even if the worst case predictions of bank switching figures come true, (1) How will it affect revenues and profits of banks? (2) Why will banks shed complacency? It won't and they won't - as a customer, whether I like it or not, that's the sad reality.

Not surprising! 

Banks Have Nothing To Fear From Neobanks

Will Millennials Bankrupt Neobanks?

Totally agree. I held suboptimal messaging by fintech vendors at least partially responsible for the sluggish pace of legacy transformation by finserv in Why Banks Can't Transform Legacy Applications - Part 2.

@VictoriaSpall: TY. I hadn't but I visited its website after your tip off. I bounced off as soon as I read the first line on its Merchant page: "Merchants can join the Saxo Payments Banking Circle as Merchant Members through your card acquirers...". This is one more company that hasn't "got" the secret sauce of successful PSPs like SQUARE: Why would I need Saxo or anyone else if I already had an acquirer account? Hiding Your Secret Sauce. But thanks anyway.

TY for your response. The tepid adoption rate of mobile payments shows that, even when people want to pay, like for instore shopping, not too many of them opt to pay by mobile / digital channel. Against that backdrop, I strongly doubt if people that otherwise won't / can't pay suddenly start paying up just because they can do so via digital channel. On another note, assuming that these 9M people in "serious debt" have seriously defaulted, they may already have gone out of the reckoning for future loans from banks. Therefore, it may be prudent for banks - at least that's what I recommended to them in Let Banks Chase Their Defaulters Instead Of Seeking Bailouts - to focus exclusively on recovering their outstandings from this segment rather than get diverted by side topics like collection channel, future brand ambassadorship potential of this segment, and so on.