I was reading the Financial Times over the weekend and I came across this article citing a banking analyst’s perspective on the US banking sector. This analyst predicted that US banks could cut 200,000 jobs over the next decade, mainly in branches and call centers. That sounds about right.
But then he added this quote which I thought was stupefying:
If I was giving advice to my kids, I’d say you probably don’t want to go into the financial industry. It’s likely to be a shrinking industry.
I couldn’t disagree more. Now, this banking analyst covers large cap banks and so he is looking at financial services through a pretty narrow lens. But when I look at the financial landscape all I see is so much potential for change with completely new businesses and new business models sprouting up on a regular basis.
Here are five areas where financial services will expand significantly this decade:
- Banking as a Service
This is a broad area but one that already has great traction. There are many banks today, large and small, that are enabling businesses to integrate lending, payments and banking services directly into their own products. We are see the largest companies such as Apple and Amazon offering financial products in this way, and fintech companies like Stripe, Marqeta and Cross River doing this as well for companies of all sizes. As more businesses seek to offer some kind of financial service to their clients this sector will continue to grow steadily.
- Digital Currencies