The Late Great Institution Called a “Bank”

I walked into a bank in the middle of the day and there was no one there, and it got me thinking...

A thought experiment:

I’m a bank and I am really AWESOME. I have really big secure buildings, with big heavy vaults and I hold and keep your money safe. You come to my buildings to get some of your cash back, put more money into my vaults, or negotiate with me to lend you some of the money that doesn’t belong to me, to you. I pay for all of these buildings and services and the salaries of all the people that work here, including pretty big C level bonuses, from all the money you pay me to hold your money and lend it back to you. Along the way you have learned not to like me very much because, let’s face it, I haven’t always been that interested in you, but hey, I am one of a very select few that you can choose from and we are all pretty much doing the same thing. You need us.

Hmmm… but hold on. I’m a customer at the bank. I don’t get paid in cash anymore and I rarely pay in cash for anything I need. I never go to your buildings. If my great grandfather gives me something called a “cheque” I take a picture of it and send it to you. My relationship with you is via the app on my phone. If your app sucks, our relationship sucks. And since the product that you have is “money”, the lowest form of a commodity that we have, I can move it to a better app if I want to very easily. About the only thing that you do for me is hold the ledger of what I have and what I owe.

Hmmm… but hold on again. I don’t have to count on you Mr. Bank to hold my ledger. The blockchain can hold it. And if the blockchain holds it I can choose to borrow from anyone who pools money from blockchains together for a fraction of the costs that you have, or invest according to the rules that I define with firms that have the “algorithms” that I like, and funny enough, the algorithms don’t make six and seven figure salaries. So it is pretty cheap for me to self manage what money I have.

I’m a bank. I have walls and vaults that don’t mean anything anymore. Apps that can be replaced in days by those who actually specialize in apps and who have none of the legacy systems, technical debt, bureaucracy and self serving interest groups that I have. I have overheads and salary expectations that boggle the mind and the ledger that I maintain can be open sourced. And all of the services I provide disrupted one by one by upstart kids in Y Combinator type labs around the globe. Hmmm?