Ten years ago no bank in Ireland had a mobile app. Getting set up for online banking required card readers and letters in the post and sacrificing your first born. The IMF had also just come to town too.

Fast forward 10 years and there are now about 1 million Revolut users in Ireland, transferring rent money, splitting bills, buying rounds (although less of that of late) all as easily as sending a text. Our phones can tap to make payments and I genuinely can’t remember the last time I used an ATM.

Quite a dramatic change from a decade ago, and most of that change has come in the last 3 or 4 years alone. When we think about how different our daily banking and money will be a decade from now, it can be hard to imagine what might change.

The biggest changes to banking will most likely be similar to what has happened in many others – unbundling. The concept of a single, large institution that stores your savings, accepts your salary, allows you to make transfers, assess you for loans and mortgages and has a branch in every village, is possibly coming to an end. All of these various layers of services will be separated out and, if we do things right, each become marketplaces for many new, innovative companies to take their place.

A good analogy is to think of your mobile phone network. It used to be the case that Vodafone built the network infrastructure, handled all the billing systems AND managed all the services, like SMS, phone calls, picture messaging, Vodafone Live etc.

Nowadays the mobile networks are the only providers of the base layers – the infrastructure and the network – with hundreds of messaging, calling and other services on top. Like Whatsapp, Viber, Skype, Messenger etc. Vodafone still does messaging and voice calls, but with lots of competition. They never developed video calling.

A similar trend will happen in banking. The big, core banking functions – namely holding everyone’s money, will probably remain with the large institutions. On the very top layer – the apps that people use on a daily basis – are already emerging, like Revolut and N26. Expect many more of these.

It will be interesting to see if the middle layer – in particular loan making – can become a thriving market for companies too, rather than dominated by the big banks like it is now.

Just like I can be a Vodafone and Whatsapp customer today, I could have my money in AIB, but my credit card, money transfer and loans from three different companies.

This obviously poses some existential questions for the big banks. What do AIB and Bank of Ireland do when their lucrative fee-based services face much more competition. This could also open them up to competition on the other side too – if I use a Revolut-like app to manage my daily banking, do I really care if the funds are stored in Bank of Ireland or another large European Bank? Or even directly with the ECB? Maybe Europe only needs 5 big core banks like Danske and Santander, not 3 or 4 smaller ones in each member state.

All of this is being enabled by European regulation and, as of yesterday, just got a big acceleration when Stripe, the payments company, announced their Treasury service (“Banking as an API”), which will let any young app development company to offer innovative, consumer friendly banking services, but without having to build the infrastructure of a bank.

It’s like how Whatsapp didn’t have to create an entire mobile phone network to re-invent SMS.

This is an exciting service launch, and an exciting few years for the re-making of the banking industry. Link. Link 2.

📰 News

Amazon‘s growth this year is astonishing. They hired 427,000 people in the first 10 months of the year. That’s an average of 1,400 people hired per day. Link.

Google News. This is an interesting development. Google’s deal to pay publishers will include giving readers free access to articles are usually behind a paywall. Seems positive for papers, readers and Google. One to watch. Link.

Microsoft announced an analytics dashboard for their corporate Office 365 suite of tools. This would let bosses see “productivity scores” for their employees. After wide backlash at the Orwellian nature of the service, they have correctly decided to roll it back. Link.

EU/US Tech Strategy. I don’t think it should be surprising that Europe is leading the way in pushing regulations that define how the internet, which operates across all countries, can be shaped by the values and rules of individual countries. The EU by its very nature is an institution built to find common laws that can work across diverse countries and cultures. The ideal next step would be for an alignment between the US and EU, for which Marietje Schaake and Tyson Barker lay out a compelling roadmap. Link.

💡 Interesting Links

In Myanmar, Facebook created their first “country-specific” guidelines for policing hate speech, false information and malicious falsehoods ahead of their recent elections. Early results seem positive. Link.

Captchas don’t prove you’re human, they prove you’re American. Link.

Ikea are using drones in their warehouses to automate inventory checking. Pretty cool. Link.

Stripe (run by the Irish Collison brothers) is creating and funding a market for carbon capture technologies. It’s great to see a company step into a much needed gap here. Much like Governments who agreed to pay-in-advance for Covid vaccines, they’re doing the same for technologies that will capture carbon from the air and sea, to help spur the development. Link.

Anonymizer. Here’s a cool tool, designed to confuse facial recognition tools. Upload a picture of yourself and it’ll use AI generate fake people that look kind-of like you. Like computer generated cousins, which you can then use as a profile picture without compromising your privacy. Link.