The Financial Services Club's Blog

Bank innovation: this time there's commitment

It was intriguing to see the rise of innovation in banking during the 2000s.

Every bank had an innovation programme, a Chief Innovation Officer, an innovation mantra in their annual reports and an innovation organisation in the bank.

What is particularly noteworthy is that when the crisis hit in 2008, nearly every Chief Innovation Officer and their teams disappeared.

Innovation was off the agenda.

Now it’s back again, but this time it’s different.

This time it’s quieter, more serious and more committed.

Not everyone knows the future ... or even the present

It's interesting that some of us present and present and present, talk and talk and talk, blog and blog and blog and more about the future of money, payments, banking, society, the world and so on such that, by the time it arrives, you’re bored with it.

I find this with mobile banking and payments, which I do find dull - if you've seen me present lately, you'll know that I've moved on and past this - but some are just catching up.

Banks designed for humans by geeks

I was going to move away from further debate about branch and omnichannel today, as there’s far more interesting stuff about Google giving payments away for free with Gmail and PayPal doing the same with mobile, but that will have to wait until next week as yesterday’s post created quite a stir.

I guess it was the mention of Apple (whose glossy rosy tint has reduced of late).

Or maybe it is that core message about designing for humans rather than money.

In fact, I did toy with the idea of Banks designed for humans, not geeks as a title, as the techno crowd fall into the same fervent misnomer as the branch crowd.

Equally, most get this wrong because they built their operations for one point of emphasis – branch, call centre, internet – and now are struggling because no longer do we deal with channels, we deal with a human at their point of need or want or desire or thought.

This is what the data geeks are really drilling down for: to get to the customer 24*7 as they have financial needs, wants, desires and thoughts, and that is why today's title is Banks designed for humans by geeks. 

Predictive, proactive, proximity based payments

After my discussion about the augmented economy which focused upon customer service, I thought about it from the other side: transactiosns.

Many years ago, my technology firm made a play for banks to deploy data warehouses to perform predictive analytics based upon consumer propensity models of their data-based behaviours.

It may sound a little complex, but basically it was meant to use data patterns to predict what the customer would do next and whether they might need some new financial service. 

Why ALL banks will change core systems

There's a theme that keeps cropping up at most conferences I attend around the remodelling of banks.

It came up again today in a discussion about data leverage at the Asian Banker Summit, and it occurred to me again recently, when I chaired the future focused day at IPS 2013.

The theme is how do you turn a vertically integrated business that owns the customer process end-to-end and organises itself around products and channels, into a horizontally structured business that wants to provide functionality to the customer at their point of need and organises themselves around the customer’s data.

That’s a long sentence and, for those who get this, it will make perfect sense.

This is why I wouldn’t bother writing anything further, except that this is so fundamental to the dialogue we’re having that I feel the need to break it down step-by-step.

Why banks MUST wake up to the mobile social revolution

I was asked to join a panel discussion on social media during a recent conference.

A social media masterclass, as it was called.

Interesting.

Sure, I’ve been blogging and tweeting and facebooking for as long as I can remember, but does that make me a master of social media?

I don’t know, but here’s what I said so you decide.

The real cause of the Bitcoin bubble and burst

All the media has finally woken up to the Bitcoin phenomena when the value of Bitcoins rose from a steady $20 per coin to $266 last week … only to crash to $100 by the end of the week.

What caused this?

The future is visual banking (still)

One of the discussions I was having recently was around a future vision for banking, and the idea of branchless banking reared its ugly head again.

As mentioned many times, I don’t believe in branchless banking in the future .. just less branches for banking.

Anyways, this discussion veered in another direction that also rang my old bells: remote visual banking.

Just as we Youtube everything, the idea that your banking would be serviced through a remote advisor who you could chat with onscreen came up as the ideal way to be serviced in the future.

This is a theme like branchless banking, cashless society and biometric authentication.  It keeps cropping up and then disappearing again.

The question is: can we really have a future where the bank deals with customers via remote visual media?

Yes.

Creating an agile, designer IT Shop from a CIO who knows how

Time to head home after a day in India at the launch of the new design centre for finance launched by Polaris Financial Technology in Chennai (Madras for the old folks out there).

As you walk into the Design Centre, you are greeted by a map of the world ... completely made out of Indian Rupees!

A fascinating trip, not least because Polaris has injected something into software development that I have not seen before: creativity.

This was clearly demonstrated by Michael Harte, CIO of Commonwealth Bank of Australia (CBA).

Over the past five years, he has replaced the bank's core systems, moved much of the banks services to the cloud, created many apps and innovations that have given CBA global recognition and more.  

Banks are just data vaults

There have been several themes I’ve explored on the blog lately that are the foundations of my latest presentations:

• Mobile is irrelevant, it’s the behaviours that are key
• Money is meaningless, it’s the data that is important
• Capitalism is dead, we are now ruled by social capitalism 
• Privacy has gone and security is our greatest risk

The themes of all of these blog entries are that banks need to think about how they reconstruct themselves for the 21^st century.

What this really comes down to is that banks are becoming pure managers of bits and bytes of data.

The latest stats on Bitcoin

I’ve written a lot about Bitcoin over the last year:

• Is Bitcoin the future of money … or are we smoking dope?  (October 2011)
• Bitcoin: immersive or subversive? (January 2012)
• You should take Bitcoin seriously (September 2012)
• A new currency payment system is about to explode (February 2013)

But had a sanity check when looking at the charts that relate to this currency.

There are a whole variety of charts from the number of daily transactions:

A new currency payment system is about to explode

Before leaving the subject of socialisation, gamification, personalisation and virtualisation, there’s one last area that is worth delving into.

This one came up when I was working on my latest iteration of the way in which money is evolving, and I have the firm belief that the exchange of value digitally will be as, if not more, disruptive than the exchange of goods physically.

Don't forget socialisation and gamification: tomorrow's banking today

Building upon the discussions about personalisation and virtualisation, these are important.  In fact, as I’ve mentioned before, personalised, virtualised in real-time on my mobile is PFM-squared (does any of that last sentence make any sense?).

So then I was recently asked to address a conference with a mix of banks from all sectors, and to give examples of innovation in each of these different banking sectors.

The examples I picked had one common theme: social finance.

From personalisation to virtualisation: tomorrow's banking is here today

Checking out this morning’s news , I discovered this new innovation from Wells Fargo where you can get personalised ATM messages.

Banks only survive because of regulations

We recently celebrated the two hundredth birthday of Charles Darwin. 

Darwin, the man who broke through the prejudiced views of the religious world of the Victorian era by being brave enough to say we were descended from apes and not created by God.

Money is meaningless

I’ve blogged and presented about this subject many times before, so rather than repeating all that, here’s a summation with a new twist.

Money is meaningless because we no longer deal in money.

Stop talking about mobile, it's not important

My latest presentation is apparently a polemic.

That’s what my colleague said yesterday, when I said that my new presentation has three themes:

• Mobile is irrelevant;
• Money is meaningless; and
• Capitalism is dead.

I wondered what she meant by polemic, so checked out the definitions online and Wikipedia defines it quite well: a polemic is “a contentious argument that is intended to establish the truth of a specific belief and the falsity of the contrary belief. Polemics are mostly seen in arguments about very controversial topics.”

Oh goody.

I also found another definition I prefer from Merriam-Webster which is that a polemic is “an aggressive controversialist”.

Even better. 

Try to destroy yourself … and then do it

One of the panellists at this week’s conference said that he employed twenty people whose sole duty was to find a way to destroy the business.

I liked the idea of that.  It is a strong and emotive statement.  But what did he mean?

“I employ twenty people in my innovation department who purely look at ways in which they could destroy the current business.”

Innovation has nothing to do with technology

Just been talking about innovation with a bunch of folks and found myself getting more and more wound up about the way people bandy the word around without knowing its meaning.

It’s not that I’m some pedant or radical who believes that every word has to be used in context correctly, but more to do with the way people talk about innovation as the core of growth and the essence of what they do, when they don’t even know what it is.

The conversation went something like this.

2013: The Technology Landscape

2012 didn’t really see any new technology outcomes. I look around the house today and see an iPad, iPhone and other things, but nothing essentially radically new from 2012 that’s big and different.  But something is about to happen that will change things fundamentally.