When I was in Denmark last month on family vacation, a Danish cousin told me about a 20-year home equity loan she and her husband had just gotten with a fixed 0.5% interest rate. Before my vacation was over, the newspapers reported that Jyske Bank was offering a negative 0.5% mortgage, a mindbendingly attractive offer for Danish home buyers.
Historically low interest rates like those in Denmark are a key backdrop for our deep dive report this week for Quartz members on the future of banking. Quartz’s London-based future of finance reporter John Detrixhe also looks at the competition from fintech startups, and encroachment by banks located in other regions as he identifies the likely winners and losers around the world.
This coverage is exclusively for Quartz members. You can sign up here for a seven-day free trial of membership to access it.
A few things that stood out for me in John’s latest reporting:
- The banking industry is being deconstructed, as a host of specialized firms, many of which are run by ex-bankers from top-tier firms, are taking aim at the assortment of businesses that the leading financial institutions rely on. They encompass investment banking, retail banking, business banking, payments, trading, and research, giving banks a run for their money.
- Peer-to-peer lending startups such as LendingClub showed that some types of financing could be processed much more quickly and simply online. Banks, however, have access to cheaper funding and capital. LendingClub and OnDeck were spending around $2,500 to $3,500 per loan to acquire new customers in 2015. By comparison, a regional lender in New England in 2017 was spending an average of $500 for small business loans under $100,000.
- Card payments remain a money-maker for banks, but they face renewed competition from tech firms like Adyen. The Amsterdam-based firm counts companies like Tiffany, Spotify, and eBay among its customers, and the digital payments flowing through its system are growing rapidly, as more buying and selling takes place online and through payment cards and apps. Adyen handled €104 billion ($114 billion) worth of transactions during the first half of this year, a 50% increase from the same period in 2018.
If you sign up for a Quartz membership, you’ll also have access to our in-depth guides on areas of business disruption from China’s Africa project to the role of influencers in modern marketing, and free invitations to members-only events. This week we’re hosting three videoconference calls for members to discuss the news with our journalists, including one about new reporting on the fate of the Six Sigma management approach. And you’ll get full access to our library of PowerPoint presentations, on topics such as the jobs of the future and Facebook’s Libra.
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Kevin J. Delaney
Editor in chief, cofounder