More than 50 years ago, banks leveraged technology to adapt to new conditions with the introduction of automated teller machines. In 2020, history repeats itself through digital computers. finews.asia chief editor, Richard Otsuki, takes a trip down memory lane in an interview with Money FM 89.3.
In 1967, the U.K.’s Barclays first successfully rolled out ATMs into the market in response to increasing demand for financial services access and unprecedented pressure from labor unions to reduce working capacity.
Flash forward more than 50 years later, banks are once again at the crossroads of exponentially increasing the adoption of technology against a backdrop with very similar parallels.
2020: Parallels in Spades
According to finews.asia chief editor Richard Otsuki, there were two factors that were most similarly mirrored in both the ATM and digital banking revolution: reduced capacity and slow adoption.
On the former, Otsuki compared labor union pressures in the 1960s with the coronavirus health measures (social distancing, branch closures, travel bans) of 2020 as major drivers of reduced capacity. And on the latter, both forms of technology took over 20 years of evolution and acceptance before entering the mainstream – the first money dispenser was unsuccessfully launched in 1939 in New York while SMS banking in 1999 appealed to a handful of European bankers and not many more.
«Just to touch on a less optimistic point,» Otsuki said in the interview with Money FM 89.3 senior producer and presenter, Rachel Kelly. «There was even a foot-and-mouth disease outbreak in the U.K., similar to the current [situation].»
How is This Time Different?
«The levers for change are the same,» Otsuki said in response to a question about differences in this chapter of technological advancement. «But perhaps the scale of this change is different»
While ATMs increased reach by using small spaces to build larger networks, the reach of digital banking will only be limited by internet access. ATMs provided greater ease of access to services and money while the current revolution is even creating new forms of access and money through blockchain technology. Business output from digital banking capabilities has also improved substantially compared to the ATM era with the emergence of big data, analytics, artificial intelligence and more.
History Repeats Itself
According to Otsuki, macro uncertainty and disruptions have always played a key role in driving change, even if the ideas driving the change are not new. Take investing based on ESG factors as another example – the practice of socially responsible investing dates back to the 1700s when American Quakers prohibited religious society members from participating in the slave trade.
«I see. So, all just a case of history repeating then,» Kelly remarked.
«Always, always. Never fails,» Otsuki concluded.
Listen to the full interview on Money FM 89.3:
