A cashless society
Speaking at the Fortune Brainstorm Conference on June 19, Bank of America (BAC) CEO Brian Moynihan spoke in support of a cashless society. He said that the second-largest bank in the US has “more to gain than anybody” from such a scenario.
He stated that while the bank still operates over 4,000 branches, and close to 1 million people visit those branches daily, three-quarters of deposits are made online.
Moynihan feels that technology-enabled business models offer cost advantages and efficiency compared to traditional models. Over the past eight years, Bank of America has invested $30 million in improving its technological infrastructure. The bank has 27 million mobile customers and 37 million online customers. Half of the bank’s transactions are already digitized through payment applications such as Zelle. Moynihan has called for the uniform regulation of financial products.
The Libra effect?
Facebook (FB) announced its cryptocurrency, Libra, on June 18, one day before Moynihan spoke at the conference. With its user base of 2.4 billion, Facebook may pose a serious threat to traditional banking once Libra launches in 2020. The payment space is an area in which the competition will be fierce, as traditional wire transfers are often expensive. How traditional banking prepares itself for the competition will decide the future of the financial services industry.