Early Forms of FinTech: Experiments in Delivering Banking Services
This paper explores competition and collaboration between banks and retailers to overcome the challenges of automating on-the-spot transactions in the USA during the 1970s and early 1980s. Existing literature documents how banks have contended with, and responded to the emergence of new technologies since at least the 1890s when technical devices focused on improving “back office” operations started to be introduced. It was though in the late 1960s, and early 1970s that information and communication technologies, in particular Electronic Funds Transfer (EFT), emerged and grew in a way that really impacted consumers, and consumers’ relationships with their banks and retailers. This paper focuses on this triangular relationship between consumer, bank and retailer. We depart from previous research on the automation of banking and retailing to focus on co-competition between retail financial institutions and grocery chains to solve the problem of digitalising on-the-spot transactions. The 1970s were a unique period in US history, witnessing the end of the Vietnam War and Bretton Woods, rising inflation, oil shocks, Nixon’s resignation, the rise of Japan Inc., the further advancement of women and people of colour in the workforce, continued suburban flight and the questioning of the American management mystique. Within this turbulent context, the early steps towards a cashless-digital economy were taken, but not without critics. Using archival data, we examine early experiments with, and the adoption of, EFT by savings and loans associations (S&Ls) in the United States. The paper focuses on the introduction of Point of Sale installations by S&Ls in retail locations that allowed customers to make deposits and withdrawals, while also enabling retailers to verify balances and support bank checking. By examining these early experiments in digital innovation, we better understand the factors driving the adoption of new, customer facing technology in the financial sector, and shed light on role of differences in gender, ethnicity and geography within the US during the early stages of financialisation.
