The world of money has been slow to innovate - not much has happened in the last 30 to 40 years. The ATM was the last major innovation and since then, although banks have been avid adopters of new technology for their own internal needs, little else has changed.
But as consumers, our expectations have changed. We now expect things to be faster, better value, and easier because that’s what we’ve become used to thanks to innovation in everything from travel to music. When it comes to the world of money, we wonder why things aren’t better.
Well, things are changing. Enabled by technology, new companies are slicing off a service normally run by a bank and doing it much better - from international money transfer to card payments to lending. The financial system is getting rebuilt from the bottom up, driven by the desire to solve the customer problems created by the banks.
Traditional consumer finance has been unfair for decades. With no alternatives available, banks have been able to overcharge and under-serve their customers. To make it worse, there’s a complete lack of transparency in the sector. Consumers are often completely unaware of what the banks are charging them.
One of the worst areas is international money transfer: hidden charges of three to five per cent are applied to international bank transfers. These are costing UK consumers nearly £3 billion each year, affecting eight million people. We set up TransferWise to right that wrong - to give people a better and fair way to transfer money.
This month we’re going one step further with Project Payback - we’re giving back customers what the bank took from them in hidden charges. We’re inviting anyone who transfers money overseas regularly to tell us how much the bank took in hidden charges last time they made an international bank transfer. When they make the same payment during the offer period using TransferWise, we will return the money taken in hidden charges by the bank previously.
That’s what the future of money will be. Fair and transparent. Technology will effectively democratise finance - giving control back to the consumers. In five - ten years from now, at least 40 per cent of financial services will be provided by fintech companies. And the sector will be unrecognisable. That can only be a good thing.