Talking in a DC Fintech Week session, Brian Brooks, the Acting Comptroller of the Currency, shared his views on the future of banking. He doesn’t believe that the primary deposit-taking function of banks will survive blockchain decentralization. He sees a future role for banks in advisory and added value services.
Brooks spoke about the current role of banks to take deposits, enable payments, and extend loans. “In a pre-technology era, we needed one place to hold all of the money in order for it to be efficient in providing all of those services.”
The former Coinbase executive compared banking to the postal service. Before email, the primary way to send a written message across the country was to use the post office. In terms of banking, with technology someone can go online and say, “does anyone want to take my $10,000 and pay me 5% (interest). And the algorithm will find somebody who does,” said Brooks. “And all of a sudden, there’s no longer value in the bank aggregating all that money together. Because the technology is substituting for the aggregation function of banks.”
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