Do brick and mortar bank branches have a future? Will digital currency make credit cards obsolete? Will the individual investor choose instead to become a crowdfunder?
A Social Media Week Los Angeles panel tackled those questions earlier today as they looked at the impact not only of social media but of technology, apps and mobile on the finance system.
“No Money, No Problem – How Easy Access to Capital is Disrupting Traditional Finance,” the title of the session, is welcomed by crowdfunding champions like Chance Barnett, CEO of crowdfunder.com. He described a “renaissance” of capital availability for startups which has resulted from crowdfunding and the movement of capital markets to online. That of course is a good description of his business. His vision of the future of investing, and for his company, involves opening the early stage investment market to everyone.
William Quigley, managing director of Clearstone Venture Partners, sees changes that have taken place in VC funding as supporting Barnett’s vision of an “opportunity for VC’s and the crowd to play together.” Quigley said that VC’s have become more reluctant to take a position in very early start ups. They are more likely to wait for “some sign of success” after which they will start throwing money, a lot of money, at it.
Quigley also offered the prediction that “all currencies within 25 years will be digital.” He noted two factors that will continue to push the growth of Bitcoin and similar currencies. One is the fact that online retailers all have “redlines” of parts of the world where they don’t do business because it is too risky with credit cards. Digital currency removes the risk of, for example, selling books online in the Ukraine or in Nigeria. He also noted that digital currency offers sellers the assurance that the transaction cannot be “pulled back” as is commonly done in the U.S. with credit card purchases.
Ben Katz, who is the founder and CEO of card.com, talked about how technology is impacting banks. He noted how companies like his own can offer services that target the “9 out of 10 people who don’t matter to banks.” While “banks are on your side if you are someone with $10k or more in your bank account,” the cost of banking has gone down dramatically with online banks that can be accessed by mobile. From Katz’ perspective there will be increasingly less reason for average customers to deal with institutions who have no real interest in them.