The Financial Services Club's Blog

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.

Banks' mobile apps fall short of the grade

I got an interesting piece of news about a report on mobile apps this week: "Mobile Apps for Banking 2013" by myprivatebanking, a Zurich-based research firm.

According to their analysis, the overall quality of mobile apps for banking is increasing, but there is still a critical lack of more advanced, user-friendly features and content.

Apparently, based upon myprivatebanking’s proprietary ranking mechanism, DBS and Capital One offer the best mobile apps with Société Générale, Westpac and ABN Amro making the Top 5.

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.

Mobile’s time has come

It’s the Mobile World Congress week this week, so everyone’s talking about mobile.

In our space, the big announcements came from MasterCard and Visa.

MasterCard launched a digital wallet in a joint venture with mFoundry, whilst Visa announced an NFC partnership with Samsung.

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.

If you didn't think a payments revolution was taking place, think again

If you didn't think there was a payments revolution taking place, then think again as dealmaking websites like Groupon, Living Social and Huddlebuy have been pushing payments systems. 

It makes startling and notable change when you see consumer-based services pushing merchant and business based services at low cost.

The bank that removes the friction will win

Talking of no-one giving a jot about customer service in banking, there is a subtle nuance here which I thought someone might have spotted or commented upon but …

The nuance is that any organisation that takes friction out of the transaction process has the potential to change banking considerably.

There are several examples of how such friction removal or rather frictionless commerce occurs, and they are all the subjects we usually choose:

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. 

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.

2013: Five Key Banking Bets

After discussing the economic backdrop, with a hot South America countering a consumerising Asia, it’s time to move on to looking specifically at the banking outlook, which is grim.

Or is it?

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.

Mobile domination: half of all Visa payments will be made by mobile in 2020

The Sunday Times had a specially sponsored section on mobile business this weekend.  The section gave some interesting stats that are worth repeating (just in case you didn’t think mobile payments is big business):

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 hundred years of cash

A hundred years ago, things were different but the same.

We needed to eat, but what we ate was very much a national rather than international cuisine.

We had to travel, but we would walk, bicycle of take the train.

We enjoyed entertainment, with a visit to the cinema once a month as a treat.

We had to talk, and most of this communication would be face-to-face.

A century later, we eat an international cuisine, catch a plane as easily as a train, watch the movies on our telephones and communicate 24 by 7 by remote media.

But one thing hasn’t changed much.

Cash.