How the digital surge will reshape finance

Cheques and balances

Regulation will also determine how much tech firms can prise away from the banks. China long let them roam free (though it has recently clawed (抓) back some of that liberty to protect the banks). At the other extreme (在另一个极端), America has shielded (隔离) banks and credit-card firms the most, by being slow to build fast-payment pipes and making it hard to gain digital-banking licences. It has left it to the market to decide when data should be shared, and at what price. Europe and many emerging markets are somewhere in the middle. These have tried to instil (渗透，逐渐灌输) competition by allowing data to flow. Some version of Open Banking will soon be in force (有效的，大批) in 51 countries, ranging from Malaysia to Mexico.

Bring these initial conditions together, and you start to see why certain financial systems are where they are today, and where they might end up. America is at stage zero. Customers are locked into sticky credit-card schemes funded by extortionate (敲诈的，过高的) levies on merchants (招商，商人). Tech firms must rely on creaky (老朽的) financial plumbing (管排系统，水暖设施) run by well-protected incumbent (现任的) banks.

At the next stage, banks would still run the infrastructure, but payments and other non-core tasks would be open to new entrants (新进入者). European fintechs, for example, can initiate transfers but they still move money between bank accounts. In Sweden they originate 60% of consumer loans.

At stage two, payments would routinely cut out (停止，关掉) the incumbents—like, for instance, the flows between Africa’s mobile wallets, which do not transit through banks. But most other financial services would still involve them. Stage three is the realm (领域，王国) of “super-apps” like Grab (掠取) and Gojek in South-East Asia, which started as ride-hailing services (打车服务), or Mercado Pago, the financial arm of MercadoLibre, Latin America’s largest e-commerce site. These want to become financial supermarkets that offer a range of products mostly manufactured by others. The most advanced incarnations (化身，典型) of these are the super-apps in China.

For as long as regulators are determined to keep banks alive, stage four, where non-banks dominate both the production and distribution of financial services, will probably never come to be. With so many countries so far off the frontier (前沿，边境的), though, this hardly rules out (排除，阻止) dramatic change over the years ahead.

Cheques ： 支票

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