Automation Will Be the End of Banks as We Know Them
Traditional banks face an existential threat not from current fintech competitors, but from the coming wave of intelligent automation.
The unbundling of the traditional bank is already underway as fintech companies break up legacy banking by doing specific tasks better. Following the 2008 financial crisis, banks pull back and inadvertently create gaps that agile fintech startups quickly fill. Now, traditional banks are aggressively copying these fintech innovations, leveraging their massive scale and distribution advantages to retain customers without needing to build strictly better products.
However, the author argues that the only truly defensible long-term strategy against these entrenched banks is full automation. Over the next twenty years, intelligent automated services will make and execute the majority of financial decisions for individuals. These systems will understand complex human objectives, such as saving for retirement or funding college, and will optimize the entire financial system on the person's behalf without requiring manual input.
This vision of the future includes fully portable financial profiles and seamless account portability that works just like switching mobile phone numbers. Ultimately, AI-driven financial management will completely remove the friction of manual money management, rendering the traditional banking model as we know it obsolete.