What if the future digital bank is not a bank at all?
This week I went along to the DeFi Summit London. Awesome event, full of huge ideas and personalities. Back in the day, when I ran innovation teams in banks, we always talked about the dawn of a ‘digital bank’. It always looked a lot like a traditional bank but with fewer people and no paper. At the summit, however, I caught a glimpse of an entirely different possible future.
What if the future digital bank is not a bank at all? Instead, it is an unbundled set of services accessed via an aggregator platform such as a wallet where users secure their keys in their wallets, and then use them to manage their assets. Hence, what the browser is to the Internet and what the bank is to traditional finance is what the wallet then becomes to the blockchain, and to the future of finance.
If you want to borrow, then CDP your ETH with MakerDAO to mint DAI stable coin. If you want to lend money, use Compound Finance. If you want to hedge, use UMA project. If you want a simple way to go long on an asset and lend it, let your wallet mint and lend DAI with a single action.
In fact by stringing together multiple DeFi services to engineer a specific outcome, the wallet provider ends up packaging together a financial solution for their users. The wallet becomes the new distribution channel. Brave new world!