A little more than a decade ago management consultancy Booz & Co explained in a report “why banks and telecoms must merge to surge”. Booz said correctly: “The epicentre for a transformation of consumer banking will be the convergence of banking and telecommunications players, as well as internet service providers and web portals.” The report started with a quote from Hugh McColl, then chief executive of what is now Bank of America, who said in 1995: “As every schoolchild knows, the dinosaur didn’t survive… “It’s not that he lacked the capacity to evolve. He just didn’t have the time. Unlike the dinosaur, bankers can see the changes ahead. We have a choice in the matter. The dinosaur never did.” Eleven years on from Booz’s report, and the NJTC/Edison Ventures FinTech Conference can in all apparent seriousness ask: “Are banks toast?” In response Neil Platt, executive vice-president of banking and payments for CashEdge, a division of Fiserv, demurred on this prospect at the NJTC panel and said: “The good news is banks that ‘get it’ are stepping up and devoting more resources to thinking about how they will meet new challenges.” And Mehmet Pasa, senior vice-president of global mobile alliances and investments in the emerging payments group at credit card provider MasterCard, added at the same event that though telephone companies tended to be the largest companies in any given country, they were not going to replace the banks. Banks will partner search engine provider Google, telecoms operators and other payment companies, such as Visa and American Express, to create better models, he added. Earlier in the year, the Isis mobile payment service backed by phone operators AT&T, T-Mobile and Verizon gained three financial partners – Chase, Capital One and Barclaycard – to join Visa, MasterCard, Discover and American Express. But others feared the collaboration could eventually turn to more competition.Mike Lee, head of Rogers Ventures, the California-based corporate venturing unit of Canada-based telecoms operator Rogers Communication, said: “It is like Battle Royale [a Japanese filmin which contestants kill one another until a single winner remains] between retailers, PayPal, telecoms, banks and Google.” In August, retailers including Wal-Mart, Target and Best Buy formed a company, Merchant Customer Exchange (MCX) to help customers pay with their mobile phones as the emerging mobile-payments industry expands to $170bn in 2016 from $60bn this year, according to Juniper Research. Firms That banks, roiled by the credit crunch since mid-2007, can be thought of as having…

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