It’s an understatement to say that technology has changed the world of money and finance. It’s more like an evolutionary shift, something akin to a Darwinian biological mutation in a species.
Banking and finance are some of the oldest businesses in the world, believed to have started in Ancient Babylon when merchants offered farmers grain loans to help them transport their produce between towns. However, banking and finance as the highly organized structures we recognize today started in the 14th century in Italy. Money management didn’t undergo any radical changes until the 21st century. Today, we are getting increasingly accustomed to thinking of money more as digits on a server rather than actual notes and coins that we carry on our person.
Here are 3 quiet revolutions that have occurred in the world of banking and finance:
Cryptocurrency is a digital currency that is used worldwide. In early 2009, the first decentralized cryptocurrency was bitcoin. Today’s investors have a new digital gold-rush, where investing in equipment for mining is the new way to build wealth. This YouTube video records how Genesis Mining sent a Bitcoin 34km up into the stratosphere on August 30th 2016 to make the first space-based peer-to-peer transaction.
2. Contactless cards.
Not all technological changes are international in scope. A good example is contactless cards.For little known reason, the US has not adopted contactless cards, but they are quite ubiquitous in the UK and Australia and their usage is becoming more widespread in Canada, parts of Europe and SE Asia. Instead of using a plastic card to make a payment, all a user has to do is use a smartphone app.
Although the technology for contactless cards have been around since 1997, when Mobil first issued contactless cards for customers who were getting gas, British banks only started using contactless cards in 2008. In London, you can even pay your bus fare with a tap on your mobile phone.
3. Easier banking.
For generations, customers have stood in line to get to a teller’s window to deposit money or make a withdrawal. The lines were particularly long on weekly paydays, usually around noon when workers were on their lunch breaks. This was a miserable experience for everyone. Customers endured ennui to get to a teller while tellers were overwhelmed by the endless stream of short-tempered people and got into trouble if their drawers at the end of their shift came up short.
While customers still brandish checks and tellers still count out money back to them, going to a bank is now entirely optional. Online and mobile banking has made it possible to do everything electronically, including mortgage applications. In fact, cash, too, is optional. Most retailers have credit and debit card machines to process transactions.What’s more, some banks are entirely virtual, which have partnered with existing banks to ensure funds are safe.
4. Safer banking.
When asked why he robbed banks, Willie Sutton said “that’s where the money is.” Although it would be nice to say that bank robberies are a thing of the past, that hasn’t happened yet. Still, it’s a rare thing because banks have so many security systems in place that most bank robbers get caught either before they leave the bank or shortly after. This, as you can imagine, is a huge disincentive for people hoping to live a life of luxury and ease with their ill-gotten loot. The day of great bank robberies are finally behind us.
While banks are safer to visit, it doesn’t mean that banks hardly ever get robbed, but the big crimes are now virtual ones, data breaches, rather than men storming into a bank brandishing pistols. The age old conflict between cops vs. robbers has changed to hackers vs. cybersecurity specialists. Today, banks have to spend a considerable amount of money to protect all their financial information and keep their customer’s accounts safe.
The Future of Banking and Finance
In the future, the Bureau of Engraving and Printing, one of largest printer for currency in the world, responsible for printing all US currency, located in Washington, D.C. and Fort Worth, Texas, might be replaced by server rooms that “mint” money for the nation and accounting bots that crunch all the numbers.