How relevant will the financial services industry be in 2050?

How relevant will the financial services industry be in 2050?

Manuel Silva

Head of Investments at Santander InnoVentures

Manuel is the Head of Investments at Santander InnoVentures and oversees the investment team and sourcing and execution of new investments. Before joining Santander in 2015, Manuel was the founding member of BBVA Ventures out of San Francisco, which he started after spending 5 years at BBVA in Corporate Development and Innovation functions. Manuel holds a B.A. in Business Administration from CUNEF (Madrid), an MPhil in Philosophy, Politics and Economics from Sciences Po (Paris) and has conducted doctoral level research on Chinese Economics at the Chinese University of Hong Kong. Manuel lives in London but spends substantial time in San Francisco and Latin America.

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How relevant will the financial services industry be in 2050?

11.04.2019 02:45 pm

Banking has been around since the early days of our civilisation. Shaped by multiple reconfigurations of the world order, it has been an ever-changing industry, adapting to an ever-evolving society. Banking has been at times a way to transfer value across time (from the Silk Road promissory notes, to the modern complex lending system) and space (from cocoa beans and cheques to Ripple’s XRPs). More often than not, banking has been a source of trust for its stakeholders and the relationships amongst themselves. And as such, banking has always been an enabler to human experiences, experiments and endeavours and, as the “industry of value”, an enabler of utility.

We live interesting times. Exponential technologies are making the world smaller and more connected. New markets and industries are appearing as the old ones (and the old ways of working and conceiving capital) crumble. Geopolitics is moving away from the battle field, with ‘winners’ no longer defined by country, resources or military power, but instead by digital supremacy, intellectual property and innovation. The world is coming face-to-face with challenges of transcendental importante, from climate change to demographic unbalances, from ethical concerns around AI usage or genomics to the very questioning of democracy. Across all this, data drives everything, changes everything, challenges everything.

As a result, expectation of experiences drastically changes and experimentation is essential to remain relevant in an increasingly competitive world. Operating under the illusion that banking can remain unchanged denotes a clear “status quo bias”, which unfortunately many seem to suffer from.

The question is: how should banks adapt? The many societal and economic changes that will have an impact on financial services are closer than we think:

  • How relevant will a mortgage be in a world where some cannot afford to own property while others prefer to turn it into a variable cost that adapts to their nomadic ways of life?
  • What will happen to trade finance when supply chains are disrupted by 3D printing, on-demand consumption and automated logistics?
  • What financial services should be made available for the new economic agents such as a drone? And for the courier that that drone has replaced?

In my opinion, it is the role of anyone who is part of the innovation and investment ecosystem to position the right debates in front of those who can really make a difference — from senior executives in the industry to decision makers at a country or international level.

As investors, we have a duty to back those entrepreneurs who can pave the way to disruption and cast some light on the changes to come and solutions to be found. This duty is something that remains a core part of our investment strategy and it’s something that also encourages and challenges us to think who we welcome into our portfolio. Stay tuned for new investments from our team.




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