EBay could replace banks in the future

EBay, or an equivalent trust system, could replace banks within 20 years, according to a Gartner analyst.

Stephen Prentice, vice president and distinguished analyst at Gartner, told vnunet.com that the existing financial services industry was unlikely to exist in 20 years' time.

"Ten or 15 years ago, people trusted banks. Nowadays banks in the UK realise that most of their customers don't actually trust them. They don't even like them. They only use them because they know there isn't really an alternative," he said.

"Banks are a classic case of [a business where] their whole livelihood, their ability to trade, is about being trusted. They used to be trusted, but they're not anymore. They're tolerated.

"If I wanted to look 20 years out, I would say there will not be a banking industry as we know it today. Most of the functions that they carry out will be handled by online or electronic brokerages."

Open markets like eBay, where individuals build up their own trust levels, would replace the existing system, according to the analyst.

"Trust takes a long time to build and microseconds to destroy. And it works [in] everything from a consumer up to an enterprise/government level," said Prentice.

"There are hundreds of millions of people buying and selling on eBay from people they don't know because there's transparency built into that system. You can look at the feedback rating for someone and make your own decision.

"Security is there to maintain the trust and the reputation of the organisation. EBay is a trust broker. They have built an environment which enables me as an individual to trade and build up my level of trust with other individuals.

"We are already seeing similar systems to eBay which match micro-lenders with micro-borrowers.

"EBay or a derivation of eBay could annihilate the financial services industry, because why would I need a bank or a stock exchange to do that intermediation when I can actually deal directly?"