The traditional banking model is under pressure as never before. A host of new disrupters is looking to disintermediate the incumbents' offerings and established lenders are struggling to offer seamless digital services.
The British start-up Secco wants to rethink the whole approach to banking, focusing on storing and trading personal data. Secco plans to launch in beta next summer.. Is it really onto something? Chris McGinnis caught up with Chris Gledhill, the start-up's CEO, to find out more.
As lead at the Lloyds Banking Innovation Labs, it becameapparent to me some years back that high street lenders carry an awful lot of technical and cultural baggage.
For them, merely standing still, in technical terms, is expensive. New systems tend to be bolted onto the old, because of price, regulation and host of other reasons, and all that crimps agility. Culturally, employees are less willing to take risks.
All that would change overnight if Apple, for example, was to launch its own bank. Doing so would force existing players to innovate immediately to defend what they have. But without
that existential threat, the competition is banking peers, and the pack stands still, or at best moves slowly.
To be sure, fintech players are popping up but they are still nibbling around the edges of banks' core business and don't yet present a real danger.
But look at what happened to Kodak and Blockbuster. Both were doing fine with their existing models, neither responded to disruption, and both are now gone. Banks have yet to have their Kodak moment. But give it time.
What's the idea?
When we established Secco, we didn't want to do what others such as Mondo or Atom are doing, ie start a new bank from scratch and focus on user experience or target certain demographics.
We wanted instead to take a stab at conceptually reinventing banking, to really look at the industry's core tenets and question the value of money. How might a bank look today if it was started by Google or Apple? Certainly not like HSBC or Barclays. We are building Secco around a few core themes. The first is data. There's a lot of value in personal data – as Google and Facebook have discovered – alongside risks in not properly protecting that asset. So why not have a bank where you can deposit both money and data, keep the data secure and lend, spend and earn interest on your own data?
Most banks have two channels, the physical and online. Secco's Aura channel will sit in between the two. Essentially, it uses handheld devices to interface with the surrounding area, giving the user the ability to interact with those around: making payments, exchanging invitations, coupons and offers or even barter for goods and services. It's a location-based social network for banking.