Brett Scott, former banker, discusses the dangers of a cashless society. Topics include: consequences of a cashless society, layers of money, methods of money issuance, power of banks, impact of automation on finance industry, power of marketing, debate between cash and cashless systems, and the rhetoric and reality of crypto.
The fusion of big tech and finance aims to create a cashless society, but raises concerns about the power and exclusion of certain communities.
FinTech has automated financial processes, including decision-making, but is now converging with traditional banking.
The push for digital payments is driven by the belief in efficiency and inclusivity, but may exclude those without access or comfort with digital transactions.
Marketing strategies associated with youth culture and progressivism influence economic preferences and generate false consciousness.
Deep dives
FinTech and Big Tech merger
The merging of big tech and finance is a significant development. Companies like Amazon and Uber rely on digital finance architectures to operate effectively. The fusion of big tech and finance is driven by the desire to automate financial processes and eliminate the friction of cash. Banks and tech companies form collaborations to facilitate this automation, with big tech leveraging the digital payment infrastructure provided by banks, such as Visa and Mastercard. The shared objective of these entities is to create a cashless society, as cash is seen as inefficient and localized. However, this convergence raises concerns about the power and influence of these companies, as well as the exclusion of certain individuals and communities who are unable to access or adapt to digital financial systems.
The automation of money
FinTech represents the automation of finance. It involves the use of technology to streamline and optimize financial processes. This automation has significantly impacted retail banking, as the user experience has become increasingly digitized. The automation trend has extended beyond user interfaces to include the automation of decision-making processes in finance. AI models are now being used to assess and approve loans, replacing traditional human bankers. The automation of financial services has been driven by the desire for speed and efficiency, as well as the cost-saving potential. While FinTech has initially positioned itself as a revolutionary alternative to traditional banks, many FinTech companies have now been absorbed into the banking sector. This convergence between FinTech and traditional finance is becoming increasingly prevalent.
Cash vs digital payments
The push towards digital payments and the preference for a cashless society is a shared goal of both big tech and financial institutions. Cash is seen as a friction or hurdle to automation, as it requires physical collection and poses logistical challenges. Digital payment methods, such as contactless cards and mobile payments, are more convenient, scalable, and can be easily incorporated into digital finance architectures. The narrative surrounding cash being outdated or problematic is often used to promote alternative digital payment systems. However, this shift raises concerns about exclusion, as not everyone has access to or is comfortable with digital transactions. The push for digital payments is fueled by the belief that it is more efficient, transparent, and inclusive, although these claims may not fully reflect the complex realities on the ground.
Intersecting narratives and exploitative marketing
The convergence of big tech and finance involves multiple intersecting narratives that aim to promote certain ideologies and interests. Marketing techniques often rely on interpolation, speaking as if the target audience already agrees with the message being conveyed. These narratives include promoting the idea that digitization is progress and those who don't embrace it will be left behind, using exploitation of local concerns such as corruption or financial inclusion to justify the transition to digital payments. These narratives often insert themselves into cultural contexts and target specific demographics, such as younger generations who are seeking differentiation from their elders. These marketing tactics can contribute to a sense of inevitability and normalcy around the adoption of digital payments while downplaying potential drawbacks and widening societal implications.
The Power of Marketing and Youth Culture
The podcast explores how marketing strategies have successfully associated products and processes with demographic change and youth culture. This approach has become a powerful tool for corporate capitalism, influencing economic preferences based on what young people are doing. This marketing tactic, although relatively new, generates a sense of false consciousness for both older and younger generations.
The Influence of Progressive Aesthetics in Fintech Culture
The podcast delves into how fintech companies heavily exploit progressive aesthetics in their marketing efforts. These companies strategically associate their brands with concepts like social movements, diversity, and progressive values to attract young, progressive consumers. However, this can lead to a reactionary backlash from certain segments of society, highlighting the complex dynamics between marketing tactics and political ideologies.
The Controversy Surrounding Cashless Societies
The podcast examines the growing debate around cashless societies and the implications of moving away from physical currency. It emphasizes that the transition to a completely cashless system can potentially lead to greater surveillance, control, and power by large institutions over individuals. The discussion also highlights concerns related to financial inclusion, protection of personal autonomy, and the balance of power between the public and private sectors in the monetary system.
We’re heading towards a cashless society. With the dominion of Visa and Mastercard showing no sign of shrinking, it’s becoming increasingly necessary to scrutinise what this shift towards virtual money really means. Brett Scott is an author and former banker who is deeply committed to evaluating the dangers of removing cash as a payment system. […]
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