The Financial Services Club's Blog

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.

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?

How many emails do you get every day?

I don’t always praise, but I will shower some praise on British Airways today.  Not for their service, flights, destinations or lounges, but for their inflight magazine Business Life. 

It always inspires me a little as, each month, the BA Business Life magazine publishes a bunch of trivia facts that are useless, apart from giving you a moment of reflection of life today.

So here are some of their most recent useless but interesting facts:

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.

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.

You've been bacefooked

Building upon the theme that you cannot have privacy, even if you are a cybercriminal or cybersecurity expert, you cannot have privacy if you are a social media aficionado.

And no greater illustration of the social media aficionado is there than Mark Zuckerburg, uberfacebook leader of the world.

A man with over a billion followers, and a man with over a billion dollars.

You would think that a social media billionaire could keep things secret … but no.

Zuckerberg is the leakiest person I know.

Capitalism is dead, long live capitalism

Following on from my previous two polemics:

• Stop talking about mobile, it's not important; and
• Money is meaningless

I’m now moving on to the final contentious point which is that capitalism is dead.

We all knew that capitalism died in 2008 when the crisis hit, or at least the Anglo-Saxon version of capitalism that was all based upon selfish greed.

The self-serving focus of modern society was evident throughout the last decade, and no more so than the unexpurgated world of me.

That has changed and is changing.

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.”

RETAIL (????) Banking ... you must be joking!

I was at a conference yesterday where a leading economist talked about the global economic forecasts and specifically about the UK.

When he got to the UK, he started talking about which sectors were expanding and succeeding the most, citing the telecommunication, transport and logistics areas as those with the greatest opportunity.

In other words, people doing business on the internet and ordering stuff for delivery to the home or office.

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.

2012: Technologies create the Perfect Storm

The #1 buzz phrase that everyone has grown to hate (especially Ron Shevlin) is Big Data.  Sure, you may hate it, but it is still pretty important, as I blogged a wee while ago.

A second area that has become so over debated that it is dull is Mobile.

Add Cloud and Social to the mix and you have the perfect storm of overheated technobabble.

Can banks meet the hybrid challenge?

It’s taken me a while to work out why  social media and stuff is such a fundamental change for banking, but I finally think I've got there and it's clearer.

It started with the rise of blogging and social media such as YouTube.

I still retell the story of McKinsey’s Chief Executive who was side-blinded by the appearance of YouTube back in 2006.

The morning papers appeared on his desk with the headline: Google acquires YouTube for $1.65 billion.

He had never heard of this company and so called in his team and asked the question: “What is YouTube?”

None of them knew.

Virtual currencies will explode thanks to mobile games

The European Central Bank (ECB) has just issued a report on Virtual Currency Schemes, with case studies on Second Life and Bitcoin (both previously covered in depth here).

In the report, the ECB calls Bitcoin “the most successful — and probably most controversial — virtual currency scheme to date.”

The ECB goes on to say that the concept of Bitcoin stems from the Austrian school of economics, where business cycle theory developed by Mises, Hayek and Bohm-Bawerk floated the idea that virtual currencies could be the starting point for ending central bank money monopolies.

A truly social bank advisor is the key

This week has been fascinating with lots of discussions about branch versus no branch and financial advisor versus product seller.

I was going to leave it at that, but feel one final blog post worthy of discussion and this is about the role of social media.

We all talk about Facebook and Twitter in the abstract whilst, for most banking people, it's an alien world that is firewalled away from them.

So how should a bank protect itself from hacktivists and cybercrime?

The real challenge for the banking system is how to protect their firewalls from attack by hacktivists, goverworms and cybercriminals and, conversely, how to deliver easy access to online banking for their clients and customers.

It’s a real dilemma.

On the one hand, everyone wants mobile access to his or her account balances and to make payments; on the other, no-one wants to consider the issue of haemorrhaging losses if they don’t protect their account properly.

Cyberwars: a far bigger threat than hacktivists

Whilst consumers are electing the next major political leader via crowdsourced populism, governments and companies begin developing cyberarms.

This cyberwarfare is already rife, with a host of malware targeting middle eastern nations (see end of blog entry).

What is obvious from these developments is that cyberattacks are the new form of warfare that evades direct hand-to-hand or nuke-to-nuke combat.

Like the classic 1983 film War Games, you don’t need to have war with weapons anymore, just cyberweapons.

And no nation is immune from attack.