The Second Renaissance Of Finance
Finweek English|24 October 2019
Technology is fast changing the role of banks, as well as the way we perceive money. But can regulation keep up with these changes?
Johan Fourie
The Second Renaissance Of Finance

For much of the last five centuries, the core functions of banks have changed little. Their primary role as financial intermediary between a saver who deposits money and a borrower who receives a loan has remained. This exchange facility lowered transaction costs and allowed banks to ‘create money’, loaning out more than they had in deposits. This made banks pivotal in capital formation, which is essential for economic development.

But technology is changing both the role of banks and the money they manage.

Opening a new bank account at Tymebank requires only an ID and cellphone number. Tymebank’s ATMs are found in Pick n Pay stores and provide all the necessary services. No need for expensive bank branches and employees, keeping monthly fees to zero and transaction fees minimal. The bank had more than 300 000 active clients six months after opening in February 2019.

At the other extreme, Discovery Bank will use big data, combined with behavioral economics, to nudge clients towards making better financial decisions. Then there are the new fintech solutions, including the plethora of cryptocurrencies that have revolutionized the way we think about money.

What are the consequences of these technologies?

This story is from the {{IssueName}} edition of {{MagazineName}}.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

This story is from the {{IssueName}} edition of {{MagazineName}}.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

MORE STORIES FROM FINWEEK ENGLISHView all
THE HEALTH OF SA'S MEDICAL SCHEMES
Finweek English

THE HEALTH OF SA'S MEDICAL SCHEMES

As the Covid-19 pandemic abates, finweek takes a look at the financial performance of some of the largest players.

time-read
7 mins  |
5 November 2021
The effect of Gilbertson's departure
Finweek English

The effect of Gilbertson's departure

With Ntsimbintle Holdings now the major shareholder of Jupiter Mines, it could change SA’s manganese industry.

time-read
3 mins  |
5 November 2021
Making money from music
Finweek English

Making money from music

Why investors are increasingly drawn to the music industry.

time-read
3 mins  |
5 November 2021
Conviction is key
Finweek English

Conviction is key

Sandy Rheeder plays a critical role in Mukuru’s mission to open up financial services to the emerging consumer market in Africa through tailor-made technology solutions and platforms.

time-read
5 mins  |
5 November 2021
The post-pandemic toolkit
Finweek English

The post-pandemic toolkit

How CFOs can use technology to support growth.

time-read
4 mins  |
5 November 2021
Big city living exodus
Finweek English

Big city living exodus

Mini cities like Waterfall City and Steyn City are redefining city-style apartment living.

time-read
3 mins  |
5 November 2021
Big compact, big value
Finweek English

Big compact, big value

Handsome, with a hefty level of standard specification, the roomy Haval Jolion compact crossover is a great value proposition.

time-read
3 mins  |
5 November 2021
On barriers to entry
Finweek English

On barriers to entry

There are various ways in which a company or sector can achieve competitive dominance. They usually make for good investments.

time-read
2 mins  |
5 November 2021
Fear and greed in one index
Finweek English

Fear and greed in one index

To buck the trend, when markets are hot or cold, is a tough thing to do. However, it can deliver solid returns.

time-read
3 mins  |
5 November 2021
Africa's largest data centre facility coming soon
Finweek English

Africa's largest data centre facility coming soon

Vantage Data Centers plans to invest over R15bn for its first African data centre facility in Attacq’s Waterfall City.

time-read
3 mins  |
5 November 2021