The CEO of the second largest bank and one of the most powerful bankers in the U.S, Brian Moynihan, has praised and acknowledged the merits of a ‘cashless society’. The emergence and growth of Bitcoin as well as its principal technology, blockchain, has provided convincing evidence of the merits of a borderless, digital and secure economic model.
Moynihan discussed the idea of digital money while speaking at the Fortune’s Brainstorm Finance Conference. He stated that Bank of America has “more to gain than anybody” with the trends showing a growing preference for cashless transactions. According to him, the general banking industry will continue to move towards tech-enabled and digital models because they are more efficient and affordable than the traditional methods available right now.
“If you think about the major types of technology that people talk about—voice recognition, artificial intelligence, machine learning, robotics—all of those apply to our industry. […] That’s how we reduce the size of our company, [by] applying technology across all procedures.”
Call for a Cashless Society
Moynihan also said that more than half of all money transactions are already being made through electronic payment platforms like PayPal, Zelle and other digital wallets, especially due to the rise of cryptocurrencies. He also stated that the industry has only started to figure out how to provide more value in digital transactions.
“We want a cashless society,” he said. “We have more to gain than anybody from pure operating costs.”
San Francisco Federal Reserve published a report in 2018 about cash still being the most frequently used form of payment. Cash represented about 30% of all transactions which makes up about 55% of all transactions made under $10. Meanwhile, 75% of BoA deposits are no longer being made through the bank’s branches.
Moynihan noted the importance of addressing the needs of all its customers, from Gen Z to baby boomers saying;
“We have to drive down both avenues at once and build products and services that appeal to the entire customer base,”
There are new technologies being adopted by Bank of America such as artificial intelligence, a new voice-activated virtual assistant called Erica with 7 million customers. According to Moynihan, several emerging technologies are being applied to the banking industry like robotics, machine learning, artificial intelligence, and robotics.
Moynihan noted that the bank, in the process of advancing and developing its technological infrastructure, has spent about $30 million in the past eight years. BoA already has 27 million mobile customers and 37 million digital customers, with the technology helping in all procedures and helping in reducing the size of the company.
Many banks in some of the most developed countries in the world like Australia, Sweden, South Korea, and China are also aiming for the model of a cashless society. Singapore aims to be the first cashless country in Asia with the citizens already making use of cashless payments methods like PayNow, QR codes, contactless mobile payments systems, and several mobile apps.
According to CardGuru:
“[Singapore] has one of the most bitcoin-friendly business environments in the world, welcoming the setup of bitcoin funds.”
In order to create the ultimate cashless society, the payment methods should be censorship-resistant, permissionless, inflation-resistant, frictionless, democratic, and public. Bitcoin amongst others possesses all of these attributes.