Senior banker: Googles, Facebooks will find way to enter banking industry
Tracking almost all our online movement, the Googles and Facebooks of the world probably understand us better than we understand ourselves. From fitness to connected homes, tech giants have penetrated almost every area of our lives.
While the world’s banks compete to offer their customers the best digital solutions, taking the banking industry out of the branch and into the app, online tech giants might be best placed to transform the way we use our money.
For Oriol Ribas Duró, vice chairman of Andorra-based private-banking group Andbank, executives in the banking industry are certainly feeling the pressure from the rise of Amazon, Google and Facebook.
“They have a lot of data and customers,” he told The Jerusalem Post during a visit to Tel Aviv this week. “Maybe 10 years ago, the public wouldn’t trust Google for banking, or Facebook for banking. Today, they trust them for everything and give them all kinds of information.”
Given their “money, data and means,” Amazon could open a bank tomorrow, Duró said. The only problem is that “the central banks don’t like them very much as they are too powerful,” and governments will not renege on their control over creating money, the transfer of money and collecting taxes, he said.
“Something is going to happen. Googles, Amazons or whoever will still come into the market somehow,” Duró said, adding that the next generation will likely learn about cash and coins from history textbooks alone.
“Why not give credit to buy things on Amazon? They know whether you are reliable and your propensity to consume. This is going to happen somehow,” he said.
Google already has made an initial move into the financial sector with Google Pay, a digital-wallet platform that enables mobile payment in stores and some transportation systems.
Duró arrived in Israel as the 90-year-old Andorran private bank, which manages approximately $27 billion in assets, establishes a new multi-family office in Tel Aviv. The bank operates in 11 countries worldwide and employs 45 workers in Israel, where it first established operations in 2016 when it acquired a controlling stake in Sigma Investment House.
While Andbank’s operations are primarily located across the Spanish-speaking world and Central and Southern Europe, its expansion into Israel and plans for further acquisitions are in line with the bank’s emphasis on Judeo-Christian values, Duró said.
“In Latin American tradition, European tradition and Judeo traditions, you have more or less the same set of values,” he said. “There’s a common heritage, a similar set of values and similar regulations and cultural orientations about the values of a family. They all, more or less, think the same. They think long-term about their children and multigenerational wealth.”
Duró cited the large community of Latin Americans in Israel and scattered Israeli communities in Mexico, Brazil and Argentina to demonstrate similar values between the traditions.
Despite the current tide of digitization and automation within the retail-banking industry, the private-banking sector should not fear the future, he said. Trusted advisers who provide a holistic approach will remain relevant, especially for clients dealing with complex finances and those seeking to save for different periods in life, both for their children and their own retirement, he added.
“I don’t fear the future too much, as we are like a family doctor,” Duró said. “We are probably not going to operate on your heart, but he’ll send you to the right cardiologist or neurologist and then arrange the follow-up. Whereas the big banks are big machines that will be much more automatized than us, the profile of our personnel and workers is very different than what you would find in a retail bank.”