Bank of America (BAC) CEO Brian Moynihan embraced the digital money movement on Wednesday, saying his firm has “more to gain than anybody” from the booming trend of non-cash transactions.
“We want a cashless society,” Moynihan, who heads up the second largest U.S. bank, told attendees at Fortune’s Brainstorm Finance conference.
Attending Fortune’s Brainstorm Finance Conference, the CEO of Bank of America, Brian Moynihan, revealed his stance on the current developments in the field of finance.
According to him, the banking industry, in general, will continue to head toward digital and tech-enabled models. The main reason for this is because they are more efficient and cheaper compared to traditional methods.
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. – Said Moynihan.
A 2018 San Francisco Federal Reserve report found that “cash continues to be the most frequently used payment instrument, representing 30 percent of all transactions and 55 percent of transactions under $10.”
Still, the combination of cryptocurrencies, cashless payments, and electronic wallets like Google Pay (GOOG, GOOGL) and Apple Pay (AAPL) are slowly eroding the need for hard currency. In particular, consumers have adopted mobile banking more widely, and use debit cards with increasing regularity.
Bank of America has spent $1 billion on building out digital banking service like these in the last six years.
All over the western world banks are shutting down cash machines and branches. They are trying to push you into using their digital payments and digital banking infrastructure. Just like Google wants everyone to access and navigate the broader internet via its privately controlled search portal, so financial institutions want everyone to access and navigate the broader economy through their systems.
In behavioral economics this is referred to as “nudging”. If a powerful institution wants to make people choose a certain thing, the best strategy is to make it difficult to choose the alternative.
A cashless society brings dangers. People without bank accounts will find themselves further marginalized, disenfranchised from the cash infrastructure that previously supported them. There are also poorly understood psychological implications about cash encouraging self-control while paying by card or a mobile phone can encourage spending. And a cashless society has major surveillance implications.
Governments around the world are even happier with the fast arriving cashless society. Cash can be hidden, despite your bank being required to spy on you and report to the IRS any “unusual” financial activity. Government wants every transaction you make to be taxable, trackable, hackable, blockable, and used to empower Big Brother.
Powerful parties condition the cultural and economic environment in such a way that their interests begin to be perceived as natural and inevitable by the general public. Nobody was on the streets shouting for digital payment 20 years ago, but increasingly it seems obvious and “natural” that it should take over. That belief does not come from nowhere.