Digital Identities are evolving fast as lenders, tech firms and governments roll out platforms to make it easier to shop, invest and constantly prove who you are. Banks – still trusted despite a myriad scandals and crises – are at the heart of this process: a situation that is unlikely going to change.
Banks have built trust over decades, even centuries; trust that at the very least in the early days of banking, and in the absence of deposit insurance schemes, the bank would give your money back.
Astyanax Kanakakis splits financial services into two categories:
- price-sensitive
- trust-sensitive
“Banks will find it hard to compete with fintechs in the price-sensitive category, but when it comes to trust-sensitive services, the incumbents have a real advantage.”
That, he adds, is why retail customers embrace neobanks like Revolut or N26, yet most corporates: “Still prefer to work with the traditional financial sector, as they’ve been working with them for so long and have built trusting relationships.”
Verification
A host of other identity-related products are starting to emerge, vital to the long-term survival of the banking and financial services sector as we know it.
Take KYC.
If a new or existing customer is on a sanctions list or wants to wash dirty money through the financial system, a bank has to know. Kanakakis’s aim from the outset was to revolutionize an antiquated KYC industry were things were done wrong and often the same way.
What has surprised me is how similar KYC is between banks and across geographies – despite them claiming it is completely dissimilar.
Read the whole article by Elliot Wilson, published on Euromoney, available here.
