Introducing: 'the future of the bank account'

Rebecca Burns-Callander
Principal OP Author

Technology has revolutionised the way we all live our lives. It is so entrenched that most of us take it for granted. How many of us are aware that we touch our phones an estimated 2,617 times a day?


The global digital transformation happened in waves, disrupting whole industries one by one. From smartphones to tablets, wearable technologies to smart machines, the technologies that make everyday life easier and more efficient have become ubiquitous.

Financial services is arguably one of the last few sectors to get a technological makeover. This makes sense: most people are risk-averse when it comes to their money. But that is all changing.

In recent years, we’ve seen a raft of fintech pioneers coming to market, shaking up the world of investments, foreign exchange, payments, and banking. Artificial intelligence, big data, blockchain, robotics, and the Internet of Things, among others, are helping to catalyse change in the financial world.

One way to prove that a revolution is happening is to follow the money. In the UK alone, venture capital investment in the fintech industry has jumped by 150%, from $704m in 2016 to $1.8bn last year.

The incumbent banks are also trying to leverage the newfound innovation taking place in this sector. Over the last 15 months, Santander alone has made 23 equity investments into 19 fintech start-ups.

Two major pieces of regulation have also altered the course of the financial services industry. The second Payment Services Directive, or PSD2, and Open Banking have combined the might of big data with financial services innovation to give control and transparency back to the consumer.

It has now become easier than ever before to move your money away from the incumbent banks. Technology players — new and old — are now able to move into the financial space wholesale.

The bank account sits at the centre of all this financial disruption as a single — and as yet relatively unchanged — concept. Most of us have a central repository where we put our salary, and from which we pay bills and other expenses.

The current account was invented back in the 16th century, when the enterprising Dutch realised they could charge a fee in return for holding people’s wealth. The idea spread rapidly to the UK and Britain soon became synonymous with financial innovation. Five in 10 of the world’s oldest banks were started in the UK.

Even the challenger banks have shied away from changing the basic structure of a bank account, focusing instead on a better user experience or slicker interface.

But could the bank account get a makeover of its own? If so, how long could that take? Who will invent the bank account 2.0? Will the same incumbents dominate in 20 years’ time?

The current account was invented back in the 16th century, when the enterprising Dutch realised they could charge a fee in return for holding people’s wealth. The idea spread rapidly to the UK and Britain soon became synonymous with financial innovation. Five in 10 of the world’s oldest banks were started in the UK.

We’ve been talking to industry players from around the world, as well as regulators, international technology innovators, economists and pundits about how the bank account could evolve away from the 16th century model — and the likelihood of that change taking place.

We’ve spoken to Tom Blomfield, founder of banking start-up Monzo, George Bevis, the creator of small business banking venture Tide, Lord Adair Turner, former chairman of Financial Services Authority and an advisor to OakNorth, the challenger bank; Antony Jenkins, former chief executive of Barclays and founder of 10x Technologies, a new financial services innovator; and a host of others experts.

Some of the topics we’ve covered include: the impact of Open Banking; the possibility of tech giants entering banking (Google Bank, anyone?); the fintech innovators to watch; the fallout from consumer apathy and other barriers to progress; the value of trust in banking; the impact of potential regulatory changes; the rise of the digital wallet; the future of cryptocurrency; and the blockchain phenomenon and how it could change financial services.

Technology doesn’t always move forward in a linear way; often, it leapfrogs, it pivots. In 1997, it was Coco-Cola — not a bank — that pioneered text payments, by giving fans the ability to text a vending machine to receive a Coke. In countries around the world that skipped the computer revolution, consumers were sending mobile payments on a phone as early as 2007.

Given these considerations, and the risk of other “black swan” events that could change the course of the future, it would be impossible to make a completely accurate prediction about what is to come. But it’s worth exploring the various scenarios. What are the major drivers of change? Which banks and startups will be victorious in 2030? And will the financial system as we know it remain the mainstream solution? View Insights to view all our feature stories and industry viewpoints.