The End of Banks?

It’s not often I go off on a rant about something I hate.

But I think I will today. And it’s about something many other people also hate.

The banks.

Right now I have an account with Barclays in the UK.

Barclays must have one of the worst online banking systems I’ve ever had the misfortune to use.

They require their customers to use this cumbersome “PinSentry” device in order to use online banking. It’s a kind of pocket calculator type thing like something out of the 1980s with a slot into which you have to insert your bank card whenever you want to do any online banking.

You have to use umpteen different PIN numbers, pass numbers, passwords, memorable phrases, memorable words with the account and with this “PinSentry” thing. It’s a minefield and I dread it whenever I have to use the account.

Well, the Barclays PinSentry device is now defective/batteries run low. As a result of the device not displaying correctly, I typed in the PIN or whatever it was that it wanted wrongly and my VISA card is now blocked.

This extreme “security” is not secure because it just confuses and overwhelms people (and I’m an IT person and it overwhelms me). The irony is it’s not “memorable” at all, far from it. People resort to noting down all this memorable word/phrase/password/passphrase/secret code mumbo-jumbo because that’s the only way they can remember it all.

You have to have it all noted down because if you make one single mistake at any stage when entering any of phrases, PINs, codes and other items, you are out and your account gets blocked. It’s then a big palaver to try and get it unblocked.

I’ve had experience of banking online with a number of banks – and the system used by Barclays has to be about the most cumbersome of all.

The fact that the banks put their customers through all this dreadful “security” passphrase, memorable word, card reader rigmarole shows they don’t understand the digital online economy. They come from a different world of old style bank branches and they are out of their depth when they try to offer banking online.

It’s also going to be such a palaver contacting Barclays and going through all the security rigmarole to order a new bank card from Barclays Bank and a new “PinSentry” that I don’t think I can face it.

I also hate the overseas call centres the banks all seem to use, where they employ people who do not speak or understand proper English. It’s another example of their contempt for their customers. HSBC also use overseas call centres to pester their customers as well. I have first hand experience of HSBC as well and it’s not positive.

And of course not to mention all the high charges, transaction delays for moving money to overseas accounts and so on. I’m sure their trading room day traders who speculate in derivatives, foreign currencies and commodities do not have to wait “three working days” in order to conduct their speculative money movements where seconds count in making a profit. But the rest of us do.

I’ve had enough of Barclays.

So I am now looking for an alternative bank and to close my account with Barclays.

But it’s also a palaver whenever you want to open a bank account nowadays. It’s not just Barclays – it’s much the same with all of them. I’ve had experience of banks in many countries and they are all similar.

Because of government anti-money laundering and anti-terrorism regulations – the so-called “Know Your Customer” routine  – or KYC as its called (which always reminds me of KFC – Know Your Chicken), opening a bank account is now a cumbersome process.

I’ve also had the misfortune to see the banks from the inside, having worked as a contractor in the past at the headquarters of a large German bank in Frankfurt and a large Dutch bank in Brussels.

Absolutely horrible places. Horrible work, horrible atmosphere and horrible management. The big office building of the one in Brussels was like a factory farm for the people that worked in it. A ghastly alienating environment. A living death.

I can’t think of any workplaces which must be more anti-life than working in a bank. How anyone manages to work full time in such places I will never know. Anti-Life PLC.

Fortunately though, with the development of digital currencies such as Bitcoin and Litecoin, as well as payment systems such as Ripple and others, the writing is at long last now appearing on the wall for these banks.

Traditional banks have little future anymore now that digital banking, and the new fintech (financial tech companies) are springing up to offer better services and capture their customers away from them.

Germany’s Cortal Consors or Consors Bank as they now call themselves is an example. They were one of Europe’s first online stockbroker startups, giving ordinary people easy access to the stock market online. Cortal Consors then went into the banking sector and shook things up there as well. Their online banking was much easier to use than Barclays – and it was secure.

The original startup entrepreneurs who founded Consors have since sold out to one of the old-style traditional banks Bank Paribas I believe. So it remains to be seen if their service and their online facilities will suffer in future.

Meanwhile a recent newcomer to the banking scene on the Continent is Number26 in Germany.  Set up by two young guys in jeans and hoodies, Number26, as they call it, is the first banking service in Europe to be targeted specifically at mobile phone users. And the bankers of the future no longer wear suits.

It’s also much easier with Number26 to open an account. No need to make an appointment and take time off to visit a bank branch. In any case, Number26 doesn’t have any bank branches, No need for them – it’s all done online and by mobile. The KFC, sorry KYC, rituals are all done using your mobile and built in camera.

And in London there is a new “high street” type bank focusing on small businesses called Metro Bank.

Not only that, but it’s possible that new cloud-based technology such as the distributed ledger blockchain system as used by Bitcoin may mean in future we could be doing our banking “DIY” style using “peer to peer” systems based in the cloud, without having to have an account with any old style banking institution any more.

Don’t believe it? Read the paper written by the Bank of England which discusses the revolutionary changes that the Bitcoin blockchain system could be bringing to the existing old legacy banking setup.

When even the Bank of England believes in the Bitcoin blockchain, you know it’s something not to be ignored. See http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q3digitalcurrenciesbitcoin1.pdf

We’ve seen changes across whole sectors of the economy through the innovation of digital processes, the Web and the cloud. Real estate agents, employment agencies,  travel agents, bookshops, tv channels, and many more have all been shaken up. Next it’s the turn of the banks.

It remains to be seen how things will develop and no one can predict with certainty how the new financial transaction scene will pan out, but the days of the old style banks are definitely numbered.

I hope very much that the dynamism of new digital entrepreneurs in the fast growing fintech sector will mean we get to see the end of these revolting institutions sooner rather than later. Hopefully these old banks will all crash and be forced to close over the next few decades.

So good riddance to Barclays – and all the others too.

My advice: forget the high street banks and open an account with one of the new cloud based startups instead. They’re coming soon to a computer or mobile near you.

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