Hi Y’all. Me again.
For those who do not know me, my name is Shahar Larry. I’ve spent most of my career as an innovation consultant and an entrepreneur. Over the past 6 months, I have been making my first steps into the world of Cryptocurrencies, blockchain, and ICOs. This article I actually drafted 6 months ago and only now got to finish it. Its title is pretty self-explanatory I guess.
Quick note: To be clear, reading this text, it may seem at times like a libertarian manifesto. I do not identify myself with the libertarian movement — although I do think some of its claims have merit.
Bursts of extremely strong feelings
We don’t like banks.
People, the general public, don’t like banks. Everybody knows that. No one misses a beat when someone says: “I hate my bank”. The thing is that we, and especially people working at commercial banks, tend to grossly and dramatically underestimate the intensity of the animosity people have towards banks and bankers. The reason for this underestimation is the infrequency of our interactions with banks and (paradoxically) the intensity of the associated emotions (people don’t like to remember or deal with intense pain). We HATE our bank and our banker in very short bursts of extremely strong feelings.
The sum of everything we fear and hate
This intense, concentrated emotion is a mixture of almost everything we fear and hate. Dealing with the bank, whether it is sitting with a person, getting a letter or an email or talking to customer service makes us feel:
- Stupid — things that happen to us in the bank, even the simplest things, are opaque. We don’t understand the “mechanics”, language or reasoning for what they do. They use terms we don’t understand.
- Blind — This opacity stems from rules, processes, and reasoning created by self-anointed, invisible people. With no reasoning or accessible source, we are left, sometimes with the bank clerk, powerless to object. We are ignorant of why things happen and thus we feel stupid; with decisions seeming arbitrary and with no clear source, resistance seems futile.
- Mute — We have no recourse and they know it. What do you say to an all powerful god that is totally deaf?
- Weak — Go to another bank? Not that easy. First, the other bank will be the same. Second, even if you did think that was a possibility, you have debt. Debt is associated with shame. Even if you could find a way to transfer your debt, being in debt makes us feel at a disadvantage and moving banks demands strength we lack.
- Powerless — Stupid, blind, mute and weak we feel, and are powerless. We are disenfranchised by an all-powerful, faceless entity that controls our present and future. Arbitrary decisions can turn my world around. Our rent, our children’s allowance, our dreams — the sum of all our fears is out of our hands.
- Enslaved — Without abdicating our own responsibility, banks take away our sense of freedom. Adam Smith described in his 1776 The Wealth of Nations, a system of natural liberty thus: “Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interests in his own way.” Need I say more?
The Seductive Stockholm Syndrome
Most of the time we don’t think about it. Most of the time things are fine. Most of the time we don’t worry about the fact that everything can change in a second and that we are at the mercy of our bank. But every now and then something happens and we realize that we are discounted, manipulated and controlled by the banks.
Examples of simple arbitrary things banks do to us: monthly service fees, ATM fees, overdraft fees, minimum balance requirements, low rates on interest-bearing accounts, high interest on loans, poor customer service.
Important note: Banks seem to be unaware of the severity of the problem. They conduct surveys that show that people are happy. One reason for this dissonance between the terrible feeling induced by the banks and the often favorable views is a sort of Stockholm Syndrome. We are “tied” to the banks. We are literally indebted to them. We are not surveyed immediately after we are wronged by the banks. It would be interesting the analyze feelings customers have towards banks right after an interaction, using emotion detection technologies such as voice and facial expression analysis.
Focus on Millennials
Here are some facts I gathered from various sources (list below). I know that these “stats” should be taken with a grain of salt and I am not claiming them to be the gospel. Still, they paint a picture:
- We are in debt — As of 2013, the debt burden of the average middle-class household [US] stood at 122% of annual household income. It’s almost double the debt-to-household-income ratio witnessed in 1989 of just north of 60%.
- 71% would rather go to the dentist than listen to what banks are saying.
- All 4 of the leading Banks are among the ten least loved brands by Millennials.
- 68% say that in 5 years, the way we access our money will be totally different.
- 70% say that in 5 years, the way we pay for things will be totally different.
- 33% believe they won’t need a bank at all.
Millennials believe innovation will come from outside the industry — Nearly half are counting on tech start-ups to overhaul the way banks work.
“When both employees and users (customers) experience pain, then bureaucracy turns into bureaupathology.” Laetitia Vitaud
Democratization of financial services
Fintech and financial innovation, blockchain financial applications and the cryptocurrency ecosystem and tokenization trend, all mark a new path of people expressing their discontent and employing ICT to redefine the balance of power. It is incredible to see and it is why I think this is not going away. Tapping into fear and loathing is easy and the centralized financial institution spent centuries fanning this flame.
Remember this: Asking a random person on the street about their bank may not yield horrible feelings, but look for the frequency of people losing their shit while in the branch; count the number of smiles there.
When I scan the industry I look for solutions that facilitate the use of alternatives to the banking services — the first and foremost being the currency we use for transactions.