The Evolution from Analogue to Digital

It is no secret that our lives have become more and more digitized over the last decade. This includes our money and assets, though compared to the way people communicate with one another, financial services have been noticeably slower to digitize. There are a number of reasons why this process has been slower for financial services, including regulatory requirements in place to ensure that stable, reliable and trustworthy services are provided to people. However, in spite of the many benefits that come from regulated financial services, this does not mean that financial services can’t become even more digital in a responsible way.

We’re already seeing people signs of this change. Today, people are increasingly using digital wallets on mobile applications rather than physical wallets that hold paper bills. Banks and ‘neo-banks’ keep track of money by storing data (0s and 1s) in database files.

This might seem as if the whole experience is already digitized, however, on the ‘back-end’ (i.e., the infrastructure behind the mobile UX) is generally a disjointed and relatively manual set of systems that remain. Most people don’t know how many intermediaries are required to move financial messages from point A to point Z. Therefore, it still takes days for an automated clearing house (ACH) or international wire transfer to happen. It is also partly why there are such high fees and/or low savings rates on a traditional bank account.