I don’t have a lot of time to post but I thought I would comment on this one.
I’m retired but spent my life in software engineering and process control and I’m helping out a company in Vancouver at the moment. Their goal is to try and enable services for people in second and third world countries (South East Asia, India, Africa, etc.) that we in the West take for granted. So, Entertainment, E-Health, Remote Education, Banking, etc. It sounds like a noble effort, but they are a for profit business and generally work with the local governments in these locals to roll out services.
A big part of their portfolio is banking. In many of the places they service, people may have to walk for a day to get to a bricks and mortar bank. They have moved all of that on line and employers or the government can make payments to that account, and they can settle debts through the same system. Its cell phone based as 3G is pretty much ubiquitous and cheap phones are easily provided. As someone said above its basically adding and subtracting numbers from a total that’s kept in a table. Its not real physical money.
Since the application was build from the ground up, and its used in some sketchy area’s security on both the client and server side was paramount and was built with that as a first priority, unlike on-line banking applications in Canada. I’m and RBC customer and their application contains GlassBox that basically tracks everything that I do on my screen. Its similar with every interact transaction I do and every web banking transaction. I can see it when I log onto on-line banking and it gives me reports on my spending patterns and habits.
Why do they do that? Its not for my benefit to track my spending. They sell it to people like Amazon, Advertisers and Retailers so they can better target their promotions to me and drive sales. This is an enormous money maker for the banks. So much so that Stats Canada tried to get into the act a few months ago. There was a good Globe and Mail article on it
Before we retired my wife ran the Data Science group there. Basically, there are petabytes of information on all their customers that is worth a lot of money. BTW, that’s why 95% of my banking is now done through Meridian.
Nevertheless, there are almost 220 million people in third world countries that depend on this new banking solution. They are in the process of regularity approval in Canada and the US and if approved it will be a major shift in how banking is done. Clearly the big banks will fight it tooth and nail. It may not be for everyone or replace all banking but if I could get third world bank fees in a more secure and convenient environment, I would certainly consider it. BTW, Paypal sounded crazy at first - now it’s a verb
One of the slides in the pitch deck is interesting. The CEO compares himself with the big 5 CEO’s. So, you have McKay there that’s making $12mm a year salary with total comp around $70mm, for doing quite a poor job IMHO. Keith’s salary is $1 a year. Now clearly, he doesn’t need the money, but that money he is not talking is coming back to people in the form of minimal fees.
Banking will change. Bitcoin was a bit of a cluster **** but the underlying technologies have proven to be very solid and secure. Too secure. I was given 2 bit coin back in 2011 when it was worth about $200. I tried to sell when it was close to $20k but I have lost the keys and there is no way to retrieve them. That money will be in cyber space forever.
