Bank or Software Company as a Bank?

The Future Bank

Is it a software company, like Apple, that will enable your payments or your local bank?  This has been on my mind for quite sometime since Apple may be releasing an iPhone with a built-in fingerprint (bio-metrics) reader that will scan and identify you as the rightful owner/operator of your smart phone.  The relationship of any smart phone that validates your identity with any monetary transaction you invoke, makes for a new relationship between you, your smart phone and the software company that is identifying that you-are-who-you-say-you-are.

Using Your SmartPhone To Conduct Monetary Transactions

Voice recognition was once considered a valuable technology for identifying the person transacting business.  It was thought that an “imprint” of your voice patterns or even a word would enable a person to authenticate to systems and transact business.  However, the use of voice patterns and speech recognition for authentication has not be adopted and has not been considered secure way to identify you-as-you.  After all, there are still ways for someone to impersonate your voice.

Why Use a Fingerprint Scanner on a Smartphone?

In recent years, we have seen fingerprint scanners on PCs, but they were not adopted for many reasons, but the main one being that PCs and laptops are shared.  Furthermore, operating systems software is not programmed to immediately or even quickly switch to the users preferences based on a swipe of the finger.  Usher in the very personal smart phone – a device that is rarely, if ever, shared with others.  And, because it’s rarely shared, the fingerprint scanner makes sense for this device.

Now that we have an always-on device that is rarely shared, and a fingerprint scanner that is identifying that you-are-who-you-say-you-are, we have a truly mobile and truly personal way to interact with systems and technology.

Personal Touch to Buy Stuff

We have been buying stuff on the internet for over 25 years.  We know how this works.  We have made a credit card available to the companies that have the stuff we want to buy.  It’s simple.  But making that PAYMENT is something that could change with fingerprint scanners and smartphones.  Now your smart phone is your digital wallet.  If you own an Apple iPhone, It is likely that your credit card is already on-file with iTunes.  If you own an Android, you probably have a credit card on-file with Google.

Now that fingerprints can identify you-as-you, the relationship between you, your smart phone and your smart phone’s software company have become one.  You are you, you are the use of your smartphone, and most importantly, your software company is representing this fact.  Apple knows that who you are and your swiping behaviors already.  Now, what if they want to take that a step further?  What if they want to enable you to make payments for stuff?  They are poised to represent you.  They already have a way for you to buy stuff because they have your credit card in iTunes.  They are poised to make payments for you.  They are poised to make you offers for stuff they know you won’t refuse.

Does Anyone See Where This is Going?

If you’re software company is now on the verge of enabling you to interact with them as your payment system, is it too much of a stretch to pontificate that they might be your bank somewhere in the near future?  I’m sure there was someone who saw all of this or saw the possibility.  Steve? I’m certain that Megatrends documented it long ago, but the fact that we are very, very close to it being a reality makes for an interesting future in banking — or, a bad Sci-Fi movie.

Barry R. Morgan

An interesting article on the same subject:

Uh-oh: Now Apple threatens the banking system, a banker warns



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