What does a bank do? From the perspective of a consumer of business here are the core functions:
-Offers consumers banking services around their day to day needs of payroll, paying bills, cash requirements, mortgages, deposits and managing wealth.
-Offers businesses a way to receive money from customers and pay their suppliers, loans to fund their business, handle domestic and international payments
Between themselves, they offer loan syndication, securitization, investments , stocks and bonds.
A common theme is the use of information technology to support their transactions and service their constituents with information about their money.
Since thousands of years this has been the function of banks. A trusted repository of your money and a facilitators of transactions for business benefit from financing wars to paying for your coffee.
What has changed in the last two decades? The rise of internet as a set of technologies to enable banking. The unintended consequence is that Internet has enabled banks to take advantage of scale and hide bad behavior such as creating complex derivate trades without responsibility for the underlying asset.
But what about payments? The Internet has been of net benefit to the payments segment by enabling tracking of the legal beneficiaries and cost transparency for the end user of banking services. Trends like modernization of payment rails, APIs, Open Banking, ISO20022 messaging are facilitating deep integration across the payments value chain. This is a clean , fee based business with few places to hide for bad actors.