Will banks continue to exist in the future?
Historically, banks were the main source of financing for consumers and businesses, providing loans for homes, cars, and economic ventures. However, their dominance has declined. In 1975, banks represented about 60% of total lending in the U.S.; today that figure is around 35%. Numerous alternative credit providers now compete in this space. Despite this shift, banks fulfill a crucial role: they serve as safe havens for financial assets during crises. They offer stability when credit markets falter, such as at the onset of the COVID-19 pandemic. While their market share may be decreasing, banks’ essential function as a reliable refuge persists — but it comes at a cost.
