Can the Internet Replace Big Banks?

We've seen digital technology disintermediate everything from record companies to university curriculum. Yet banking has remained rather immune to all this disruption.

Sure, ATMs and online banking may threaten the bank teller's union, but central banking's monopoly over money has hardly budged. Just like we have to get our food from real plants and animals, we have to get our money from real banks. Or at least it appears that way to most of us.

However, the rapidly changing digital economy is about to give banks a run for their money. Literally. But if they learn to work with, rather than against, the new role of money in a peer-to-peer landscape, they may just come out of this on top again — or at least working side by side with the communities they should be hoping to serve.

 

In short, banks can continue to write loans to their communities, but only if they also help these communities invest in themselves, as well.