Frictionless Finance with FinTech
Larry Summers, former director of the National Economic Council for President Barack Obama, writes a regular column in The Financial Times. His latest piece is his take on FinTech, which has the main headline that FinTech is taking away frictions in finance. Yep. The frictions are illustrated by things like interchange fees, the length of time it takes to clear cross-border cheques, the charges per transaction for basic banking services, the high overheads of insurances and interest on mortgages, etc.
He provides comparisons of the impact FinTech will have on banking being like:
'FinTech to banking is like Skype to telecoms – drastically reducing margins; or like Netflix to Blockbuster – yes, some banks will go bust'