Bill Gates and the Banks

Bill Gates said a few days ago that banking is one of the activities that will disappear in the next 10 to 15 years.

Personally, I normally get kind of annoyed at this type of statement because the crystal ball holders and other fortune tellers rarely appear to explain when their prediction has gone wrong.

In this case, I understand that some of part of the banking belongs to the previous century: centralized, blind, volatile. In some cases, incomprehensibly exposed. In others, it is totally risk-averse, which, if you really think about it, is the core of a bank’s business. If there is no risk, why is there a spread and what is the bank for?

The same way the world has too many entrepreneurs hanging on to banks, it also seems to have some banks that only lend to those who don’t need to. I try not to surround myself with neither of them.

The way I see it, the idea of a partner bank is very present and will last: that of a bank that demands but also grants. That contributes to the existence of good practices in companies, without the intention of teaching the entrepreneur to manage his business. Which is reasonable in spreads. And who understands the relevance of time. The time you have to comply without strangling. The self-imposed time to say yes or no, instead of leaving the world suspended, waiting for a divine light.

It is possible that Mr. Gates is also right about these banks (partners), in his apocalyptic projection. I sincerely hope he is wrong. And I hope he’s wrong because I have no doubts about the strategic relevance of continuing to have a certain kind of banking. More. To continue to have Portuguese banking. It’s not a matter of faith, but market evidence.

The above conviction is fundamentally based on three realities:

• The significant weight of investments in infrastructure in a hotel unit, which implies that we have to recover longer investments.
• The seasonal character of Tourism, which implies that there is a relevant seasonality in the self-financing capacity.
• The slowness with which alternative financing mechanisms are emerging and which make the role of banks irreplaceable in the coming years.

Our tourism must continue to captivate investors, many of them foreigners. But to do different things – innovative, differentiating and with high national added value – things that exist throughout the civilized world and which Portugal seems to resist to, we can never do them without credible financial partners. Especially those who are there when they are needed.

Luís Barbosa
Financial Architect
ABC Sustainable Luxury Hospitality