King - Breaking banks the innovators, rogues, and strategists rebooting banking

Brett King

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Copyright 2014 by John Wiley & Sons Singapore Pte. Ltd.

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This book is dedicated to Matt, my son, who is learning to code and has more potential than he can imagine, and to the Italians who invented modern-day banking.

The measure of intelligence is the ability to change.

Albert Einstein

There are a few people whose support made Breaking Banks and the ongoing disruption possible. First, thanks to Rachel Morrissey, who keeps me sane and keeps everything going, and to Randall and the team at Voice America for giving me the opportunity to run the Radio Show that led to this idea in the first place. Second, thanks to the amazing participants and interviewees who gave their time and support for the book, all of whom were very patient through rounds of edits and other unintended consequences.

Thanks to the team and supporters of Moven, who continue to give their incredible support in this tough, but amazing journey; to the tribe of bloggers, friends, and supporters who regularly tune in each week to my show, tweet, and amplify the message, including Sudu, Jim Marous, Dave Birch, Brad Leimer, Dave Gerbino, Serge Milman, Robert Tercek, Bruce Burke, Duena Blomstrom, Mike King (no relation), and cover artwork designer J. P. Nicols (no h), Ron Shevlin, Deva Annamalai, Jeff Stewart, Matt Dooley, John Owens, Bryan Clagett, Jason Cobb, Adam Edge, Jenni Palocsik, Matt West, Jay Rob, Lydia, and the crowd of other followers whom Im sure Ive missed; and to Uday Goyal, Sean Park, Sim, Pascale, Naoshir, Nadeem, Yann, and the team at Anthemis, who never cease to amaze me with their network and support.

Thanks to Nick Wallwork, Jeremy Chia, and the team at John Wiley & Sons for their support.

Thanks to Jay Kemp, Tanja Markovic, Jules, and the team at ODE, who support my efforts to keep the disruptor message loud and clear on the road about 100 days of the year.

Finally, thanks to the disruptors, innovators, engineers, entrepreneurs, investors, and believers who are changing the world of banking every day.

Brett King is an Amazon best-selling author, a well-known industry commentator, a speaker, the host of the BREAKING BANK$ radio show on Voice America (an Internet talk-radio network with over nine million monthly listeners), and the founder of the revolutionary mobile-based banking service Moven (Moven.com or search iTunes/Google Play for Moven). King was voted as American Bankers Innovator of the Year in 2012, and was nominated by Bank Innovation as one of the Top 10 coolest brands in banking. His last book, Bank 3.0 (available in seven languages), topped charts in the U.S., U.K., China, Canada, Germany, Japan, and France after its Christmas 2012 release.

King has been featured on Fox News, CNBC, Bloomberg, and the BBC, and in Reuters, Financial Times, The Economist, ABA Journal, Bank Technology News, The Asian Banker Journal, The Banker, Wired magazine, and many more. He contributes regularly as a blogger on Huffington Post.

The premise of disruption in financial services is relatively new. With the exception perhaps of the push for deregulation in the 1970s, banking is not known for huge leaps in innovation or significant shifts in the dynamic of the players involved. Sure, there have always been mergers and acquisitions, and some industry consolidation from time to time, but theres never really been anything that is akin to the level of disruption weve recently seen in the music or publishing industries, for example, or the dynamics of the communications sector with the shift from the telegraph to the telephone, and then from fixed-line to mobile.

In the midst of the financial crisis in 2009, Paul Volcker, the former U.S. Federal Reserve chief, berated the financial industry in respect to its track record on innovation:

I wish somebody would give me some shred of evidence linking financial innovation with a benefit to the economy.

Paul Volcker commenting at the Wall Street Journals Future of Finance Initiative, December 7, 2009

Volcker went on to claim that the last great innovation in banking was, in fact, the ATM machine. Volcker has a point. In all, banking hasnt really changed materially in hundreds of years. Ostensibly, the nineteenth-century form of the bank branch is still largely recognizable today. While we have had some so-called branch of the future concepts, the way we do banking has remained largely unchanged over the past hundred years.

At least, that was true up until a few years ago when the Internet emerged. Today, we see significant shifts in banking, consumer behavior, and bank product and service distribution methods. We have seen dramatic changes wrought by technologies like the Internet, social media, and mobile banking. The recent global financial crisis has undermined trust in bank brands collectively, and while that trust may start to return in the coming months, for now it is a cause for open challenges to the traditional banking approach. We have social media and community participation giving transparency to the discussion on bank effectiveness, customer support, and fees, like never before. We have new disruptive models of banking, payments, and/or near-banking that are taking off and challenging the status quo.