A Bitcoin story

In 2017, I purchased Bitcoin for the first time. It couldn’t have been easier. I just walked to the 7-Eleven branch near our office in Makati and got PHP500 worth of the cryptocurrency using the popular Coins.ph cryptocurrency wallet, which allows anyone to buy bitcoins even without a bank account.

Just download the Coins.ph mobile app and sign up, and link your mobile number. After the usual KYC (Know Your Customer) verification, you can then top up your account by going to 7-Eleven’s Cliq Kiosk and specifying the amount you want to put on your Coins.ph wallet. In my case, PHP500. After paying the amount at the 7-Eleven counter, it should then be reflected in your wallet.

Now you can click on the Convert button to turn those pesos into bitcoins.

At the time, I was a banker. It was my first time working in the banking industry. I was there to help the bank embrace digital and become more innovative. I excitedly shared this development with my manager and colleagues. Buying a new form of digital currency (cryptocurrency like bitcoin is different because it does not rely on a central authority like the government or a bank) in a convenience store? This was revolutionary. And quite disruptive, of course, to the banking industry.

Instead of being curious about the new technology, however, the reaction was skepticism. One of my colleagues asked why I knew all this techie stuff. Another said how could a virtual currency threaten the banking industry. Especially considering our bank was a subsidiary (which since has been merged into) of the first bank in the Philippines and Southeast Asia.

Those of them who had heard of Bitcoin at all knew it only as a scam. To be fair, the cryptocurrency space was rife with scandals at the time.

None of them took the threat of Bitcoin seriously, least of all my manager, who was supposed to be in charge of innovation at our bank. As traditional bankers, digital to them was all about marketing. How would paid media like Facebook Ads and Google Ads increase the number of auto loans and housing loans?

Digital innovation was about low-hanging fruit like chatbots for customer service. And since the banking industry was heavily regulated – and ours was the subsidiary of a particularly conservative bank – you had to spend more time dealing with Legal and Compliance instead of actually doing digital.

As one digital officer who left the bank a few years ago put it: “They hire people from other fields who can bring their digital expertise here and think out of the box. But spend their whole time trying to put you inside their box.”

Traditional banks have only themselves to blame for not treating customers properly all these years. And by deluding themselves into thinking they are innovative by just benchmarking themselves against other banks, rather than disruptors from other fields.

That’s the myopia that will kill the banking industry if it doesn’t evolve. Obviously, I’m on the side of Web3 (https://mb.com.ph/2024/6/20/why-should-you-care-about-web3). One example is the stablecoin wallet I use, Stables, which will soon allow users to use its card wherever Mastercard is accepted. Then you have e-wallets and neobanks (banks that have no physical branches).

So, what does Generation Z have to say about what they want from banks? (https://www.pymnts.com/news/banking/2024/what-generation-z-wants-from-their-bank/)

“Gen Z wants this easy and seamless access to banking and payment services because they areactive consumers of banking and payment products — five on average, according to the research. And they’d use twice as many, if offered and available.”

Interestingly enough, while Gen Z is the digital-first generation, they still value the human touch (https://personetics.com/embracing-gen-z-need-for-proactive-digital-banking/). Meaning the challenge is for banks to provide them with the kind of service they want when they want it.

“Gen Z is truly the first digital native generation, immersed in tech from birth. Unsurprisingly, they overwhelmingly favor digital channels and mobile apps for banking – with usage of apps twice as high as in previous generations. Over 60% value 100% digital banking services.

“However, the study also reveals that Gen Z hasn’t completely abandoned the human touch. Nearly 60% appreciate the ability for remote advisory, and almost half still want the option of visiting a branch. Clearly, they desire digitally augmented but deeply personalized banking experiences.”

Think these days are complicated? Wait until Generation Alpha joins the chat. –(https://www.forbes.com/sites/columbiabusinessschool/2023/02/23/setting-the-financial-stage-for-gen-alpha-by-engaging-millennial-parents/)