"The entire banking value chain hasn't changed since the 1400s. Banks manufacture products that meet credit gaps in institutions and individuals.
The raw material that goes in is money given by depositors. So in essence, banks are manufacturing services and products.
Manufacturing to Electronic Entity
Now if you look closely, the entire manufacturing system has evolved over the years, the manufacturer doesn't sell directly under its brand name. Let's take an example, Coca-Cola - In its essence, it's a marketing company. They don't manufacture, they don't distribute, they don't retail. They have a network to do this. There are factories that produce Coca-Cola - not owned by them. These factories supply these to wholesalers, again not Coke, and distributors - again not coke. These distributors have a retail network, a network of shops to actually sell the product. The customer comes to the shop to buy it.
Now E-commerce disrupted this space and brought wholesalers, distributors, and retailers directly to the customer - cutting out the middlemen.
This is exactly what is happening in the banking segment right now. Revolut has a valuation equivalent to the market capitalization of big-four UK incumbent NatWest, and about a third bigger than Deutsche Bank and Societe Generale. Revolut basically is a super app, that has mass reach, being a complete electronic entity (a super app) that resells or packages core banking products. They don't have a banking license but tie up with other traditional banks. Thus now, it is a pure-play marketing company in a tech wrapper.
The banking system thus is long due for a change. The winds were always shifting, and now we are seeing the sails toppling.
The chase for the next billion
Google, Facebook, etc. all realized the potential to bring the next billion users online. Who are they - they are the underbanked, KYC redundant, non-smartphone carrying users. This was a major problem. Jio took charge, disrupted the entire telecom sector (in the world), and created a greenfield 4G network - Thus doing away with the costs of carrying 2G, 3G legacy network costs which were amortized. Created a price point and forced partners to come up with the cheapest 4G phones in the world, bringing the next billion online. Suddenly, FANG were all clamoring for the Jio pie.
Banks typically are centralized organizations, that are risk-averse by nature (otherwise who will deposit the money?). This translates into risk aversion while lending as well. It will be a hard pivot to service the next billion. Thus we see the advent of P2P, De Fi (Decentralized blockchain Finance), IFC investments flowing into undocumented segment financing companies, Account Aggregators, etc.
The Devolution
The next billion, and the next after that, will slowly become the majority, which will influence the banking sector to again be disrupted. Banking in the next 5 years, will be decentralized, and banks may just be reduced to their core function, which is to manufacture or provide credit lines.
The Moonshot
If the risk can be decentralized as well, depositors might change the way they deposit the money, companies might find alternative ways to raise capital by underwriting the risk (think evolved NCDs), and we might not need a "bank".