Following on from the comments on UK Bank Stats from the BBA, and the report from TheCityUK, here's a few more statistics focused upon home ownership.
Just a century ago, nine out of ten homes were rented in the UK compared to only one in three today.
Since 1976, owner-occupier households have risen from 55% of all households to 66% today. Meanwhile, local authority housing provided by government councils has gone down from a third of all housing to just 1 in 20 today.
Thank you Margaret Thatcher!
Equally, I wonder what this picture will look like in two or three years, as the credit crisis and house price slump looks likely to continue in the UK.
Either way, this still does not make the UK the largest home owning nation of Europe. That award goes to Hungary and Romani.
Hmmm ... is that why Romania’s Gypsies are so well known?
Following on from yesterday's number - UK Bank Stats: a fascinating portrait of
life -I was sent another report today from TheCityUK, the trade body that promotes the interests of the City of London.There’s loads of numbers in this document that are useful, which I will post in a few separate blog entries starting with the payments and retail banking figures.
According to the latest figures:
95%+of adults in Britain have at least one bank account
98% of people live in a household where someone has an account.
These are among the highest levels in Europe largely due to the ‘basic bank accounts’ launched in 2003, which allow people who do not want a conventional bank account to receive money, pay bills and withdraw cash through post offices.
There are 10,500 bank branches and 64,000 ATMs – more per million people than in France, Germany and Italy.
Bank customers increasingly use their accounts without visiting a branch:
59 million people live in Britain, of which 46.9 million are over 16 years of age
46 million customers have registered for telephone banking
33 million for online banking
4 out of 10 adults used remote banking to make payments in 2008
Method of payment (2008) Transactions (millions) Transaction value (£ billion) Cash 22,569 267 Cheque 1,343 1,421 Debit card 5,384 241 Credit card 2,041 142 Direct debit 3,077 935
In 2008, 94% of adults had at least one of the 169 million cards issued by banks and building societies, which included:
76 million debit cards,
66 million credit cards, and
6.4 million charge cards.
Cards have helped the growth of internet retailing, with more than 32 million adults buying £41 billion of goods and services over the internet in 2008.
Cards have also made international travel easier by allowing holders to spend £19 billion outside the UK in that year and to withdraw £7.9 billion in cash.
More than three and a half million small businesses in the UK have bank accounts, depositing over £50 billion with their banks and credit facilities worth a similar amount.
Fascinating stuff, and the data shows a real insight into the way we are living our
lives.
For example, every ten minutes:
35,000 people use the internet to check their bank account balance
or statement on-line,
4,500 people are paying bills via an internet or
telephone service;
10 people open basic bank accounts, to be accessed in branches or
post offices, as part of the work between the banks and the government
to improve financial inclusion in the UK;
£3.2 million in cash is withdrawn by 48,000 people visiting a UK
ATM;
38,000 retail credit card purchases are made by card holders in the
UK;
clearing systems process 18,000 cheques, 107,000 automated payments
and 151,000 plastic card payments;
banks earn £591,000 for the UK’s balance of payments; and
banks receive £378,000 from households for safe-keeping and approve
19 mortgages worth over £2 million.
Some other interesting stats here as the data shows that, for the UK’s main high street banks:
the banks’ aggregate balance sheet rose by 11% to £4.1 trillion in 2009;
total deposits rose by 3½% including a £6.8 billion inflow (+7%) into cash ISAs, which stand at £98 billion;
sterling deposits from the UK public and private sectors, of £1.5 trillion, comprise 41% from individuals, 41% from private non-bank financial corporations, 13% from private non-financial corporations and 2% from other sources;
after allowing for securitisations and write-offs, net lending fell by £11.6 billion in 2009, reflecting reduced demand and higher repayments for credit cards;
annual net mortgage lending was just £8 billion in 2009 and new mortgage lending in 2009 was 37% lower than in 2008 with the number of loans approved falling to just under one million;
total bank mortgage lending of £36 billion was virtually offset by a collapse in lending by building societies and other lenders who saw repayments or transfers of existing lending completely outweighing any new lending;
46,000 properties were possessed in 2009 – equivalent to 42 properties in every 10,000 mortgages - 15% more than in the 2008 and the highest annual total since 1995; and
loans written-off rose by £6 billion in 2009, reflecting deteriorating trading conditions in the UK economy despite the recession coming to an end.
I’ve just received this month’s Banker magazine which the editor, Brian Caplen, describes as their most important issue of the year as it covers the latest Bank 1000 listings.
This year’s listings show a surprisingly stable crew of American and British banks.
World Bank Tier One Pre-tax Rank Capital profit $m $m 1 Bank of America Corp 160,387.77 4,360.00 2 JP Morgan Chase & Co 132,971.00 16,143.00 3 Citigroup 127,034.00 -8,445.00 4 Royal Bank of Scotland 123,859.00 -4,366.29 5 HSBC Holdings 122,157.00 7,079.00
Considering the crisis was meant to have killed these banks, you may find it surprising to see that Citigroup and RBS have maintained their leading positions.
This is down to the fact that the Banker measures a bank’s strength by its Tier 1 Capital, and so their positioning is more of a reflection of the sheer size of these firms than by their brand or market capitalisation, which is used in some other studies of size.
The Banker’s data is fascinating though, as the database also contains profitability, revenue, cost-income ratio and more, so it’s a useful tool in all senses. And the online data goes back to 1996, so you can do some useful comparisons.
Mind you, my data - old Banker magazines - goes back even further so I quickly took a snapshot of a few useful year’s – 1994, 1999, 2004, 2008 and 2010 – to see how things have changed. Mapping out the Top 20 banks of the world for each year makes for an interesting picture (doubleclick the picture to see a larger version):
Back in 1994, Japan ruled the world.
Then their economy went South and Origami Bank folded, Sumo Bank went belly up, Bonsai Bank cut back their branches and something fishy went on at Sushi Bank where staff got a raw deal.
Post-Japan’s slump, the Anglo-American financial system ruled. So you would think that, as that system failed, it also would have gone South.
Not the case.
Maybe that’s a reflection of the sheer scale of investment American and European firms have put into these economies to avoid such a crash.
Well worth spending time looking at the data and looking forward to playing around with it further.
I love talking to Chinese and Indian banks, just by the sheer drama of hearing their numbers.
For example, I talked with State Bank of India this week. They have:
150 million customers
11 million High Net Worth customers who earn >US$10,000 per month
Increased their ATM network from 12,000 to 20,000 units over the past year
Surprisingly, they only have 3.5 million internet banking users and, having released mobile access to the bank in December 2008, only 240,000 mobile banking customers. Admittedly, the latter is growing at 35,000 customers per month, but it is low.
I'm sure those numbers will change over time anyways, as more rural customers come onstream via mobile payments, like the M-PESA style revolution taking place in Kenya. Oh yes, btw, not sure if you spotted it but M-PESA is now a fully-fledged banking service.
That's an aside however, when you think of the sheer scale of the Chinese and Indian banks.
For example, China has 200 banks that each have more customers than the UK's largest bank (Lloyds has 30 million customers) and China's banks are also the most attractive for investment right now. For example, according to the most recent Financial Times Global 500 firms by market capital, the Top Three Banks are Chinese, whilst ICBC and China Construction Bank now feature as Two of the Top Six firms globally.
I don’t know if any of you read the IMF report recommending two new bank taxes:
a bank levy based upon the risk banks represent, called a Financial Stability Contribution (FSC); and
a straight tax on profits and bonuses called the Financial Activities Tax (FAT).
If you haven't, then I can recommend it's worth a skim. For example, they reject the Tobin Tax / Robin Hood Tax idea, saying that this would just get passed on to customers by the banks.
However, the fact that they support the idea of a levy and a tax – a double whammy – could have bankers worried ... except that bankers are pretty clever at tax avoidance and Canada and Japan have said they won’t implement these plans so it’s a G18 agreement right now, or less.
In my view, the document is also flawed. Here's why.
Now the actual content is debatable and not set in stone.
As I said, it’s for discussion.
But it does contain some really interesting appendices which are noteworthy as useful research materials, covering diverse subjects from each country’s proposals for reform to their contributions to the bank crisis to date.
For example, here are the amounts announced or pledged for financial sector support so far, as a percentage of 2009’s GDP (doube-click chart to see a bigger version):
What this shows is that for the ‘advanced economies’ – think USA, UK, France, Germany, Japan et al – the cost has been 6.2% of GDP in direct support and a further 10.9% in guarantees.
The total of columns A to E represents 29.8% of advanced economies’ GDP in 2009.
That compares with 1.8% in the emerging economies – think the BRICs, Indonesia, et al.
Mind you, they then go on to say that “for the advanced G-20 economies, the average amount utilized for capital injection was 2 percent of GDP, that is $639 billion, or just over half the pledged amounts. France, Germany, the USA and the UK accounted for over 90 percent of this. For the advanced G-20 economies, the utilized amount for asset purchases was around 1.4 percent of GDP, less than two-thirds of the pledged amount. Similarly, the uptake of guarantees has been markedly less than pledged.”
This is why the report reckons that the global financial crisis has cost about $533 billion less than originally estimated, and is now just a mere $2.28 trillion when all is said and done.
Now how much is $1 trillion again?
Thanks Mint.
So yes it’s still a lot, but it’s half a trillion dollars less than before.
Phew!
Now who’s the daddy when it comes to global bailouts and guarantees:
Wow, the UK wins!
We’re number one, we’re number one, we’re number wohohohohone.
Wait a minute.
That means we’re #1 in global bailouts of banks.
Hmmm ... not sure if we should be so thrilled with that accolade and maybe this is why Gordon Brown is so keen on the idea of a Tobin Tax or a Robin Hood Tax or a Financial Activities Tax or ... well, any tax really to help with our debt mountain to be honest ...
Source: the Daily Mail
... as the burden of national debt amongst the G7 nations is at a 60-year high, with the UK’s Treasury planning to increase national debt by over £560 billion between now and 2015. That’s about $800 billion or almost a trillion (how much is a trillion again?).
Meanwhile, the emerging economies paint a very different picture:
Apart from Russia, this crisis has cost the key future economies of the world urrmmmm ... nothing.
These charts make it clear that NINE of the G20 nations have had no crisis. Add to this the fact that Canada’s financial system has been the most stable in the world, and Japan do not intend to implement these tax and levy options, and you realise that under half of the G20 will be keen to support any radical changes to the financial markets.
It's not as clear cut as this, as the fact that the Advanced Economies bailouts allowed the Emerging Economies to survive this crisis without their economies also imploding is a key part of the dialogue.
Another useful chart shows why the IMF has reduced the bailout numbers by $533 billion where financial markets have used far less of the pledged amounts than those offered by their respective governments:
Finally, these charts are followed by a review of each country’s bank taxation policies implemented or proposed (Appendix 2, Page 32), a review of corrective taxation and prudential policies (Appendix 3) and the current taxation policies (Appendix 4).
This last section is also particularly intriguing as it demonstrates why banking has been so critical to Gordon Brown’s policies of the past decade. For example, here’s the percentage of a country’s total tax pool raised from financial firms by country.
G20 Corporate Taxes Paid by the Financial Sector (in percent)
This makes it clear that for every country, but particularly for Italy, Turkey, Canada and the UK, the role and influence of the financial sectors on their economies and government policies is fundamental to the country and its economic and public sector health.
Without bank taxes, countries fail.But with bank failures, countries fail.And that is their Catch-22 and the reason why this is so hard to change.
Between domestic interests and focus, aligned with the radically different ways in which this crisis has impacted each G20 nation, it is unlikely that we shall ever see a simple agreement of policy reform now, or at the G20 meeting in Toronto in June.
The International Monetary Fund's managing director said he worried
that rivalries among countries could thwart a global overhaul of
financial regulation, as governments split over the merits of an IMF
proposal to levy a new tax on the world's banks.
"The risk…is that different parts of the world will have their
proposals which make sense" to them, but "which may be somewhat
inconsistent," Dominque Strauss-Kahn said at a press briefing ahead of
this week's meetings of financial officials from around the world.
I sometimes get unusual things in the email – no comments thanks – such as the full post-conference write up of a cards and commercial payments conference in the USA last month.
Here’s a few quotes and notes that caught my attention ... Marcie Verdin, Group Head of Large Market Segment, Global Commercial Products (why do people have such strange job titles in American firms) for MasterCard Worldwide stated that there are $90 trillion commercial payments made each year, of which cards were responsible for less than $1 trillion. Oh yes, being a US conference, I guess all of the other payments must be made with paper cheques.As if to back that up Peggy Yankovich, Senior Vice President for Global Transaction Banking Division at HSBC, stated that the total amount of American B2B payments were currently worth around $18 trillion per annum. The majority of these - $14 trillion worth – are for transactions worth over $5,000 each. What is astounding therefore is that cheques accounted for around 70% of B2B payments.Get electronified America!!Thinking that this might be the case, it was nice to see that einvoicing made the agenda with Henry Ijams, Managing Director and Founder of PayStream Advisors, noting that half of all companies were evaluating einvoicing and one in five are currently using this process. Conversely, it was a bit disappointing that 80% don’t use einvoicing though and, most tellingly, 64% said that they process fewer than 25% of their invoices electronically. A long way to go to get efficiency in those processes.
Just to get in on the act, Darren Parslow, Head of Global Commercial Solutions at Visa, estimated that prepaid is worth about $3 trillion of payments.
Interestingly, this was the figure that TowerGroup put on prepaid market for 2010 ... back in 2005!
Tony Cunningham, Vice President Business Development at UATP, then made a point that surprised even yours truly: ‘30% of the largest global retailers now accepted an alternative form of payment such as PayPal’.Wow!There’s a whole load of other useful stuff for those interested in commercial payments, so may well be worth a look.
Back in 2004, I asked a group of bankers when mobile would take off in banking. They all said: “not in our lifetimes”.
In 2007, Bank of America launched their mobile banking applications and has seen a rapid uptake of users. In less than a year, they reached a million customers on mobile, and saw a further 300% growth in 2008. It took them over a year to get the first million customers; a pregnancy period of just nine months to get the second million; and a short six months to get the third.
According to Doug Brown, the man responsible for mobile banking at Bank of America, the speed of take-up is accelerating even faster in 2009, with 150,000 new mobile customers in September 2009, 210,000 in August and 220,000 in July.
What are they doing?
99% of mobile users’ view balances, 90% view transaction details and about $10 billion of funds have been moved via mobile.
But this is not just for existing accountholders wanting account access. The bank has gained over 150,000 new accountholders from competitors during 2009, just because they wanted mobile banking.
So far so good.
Now jump to Africa.
M-PESA is the story in Africa.
M-PESA is the mobile text service introduced by Vodafone’s subsidiary, Safaricom, back in 2007. Suddenly a country with zero electronic methods for making payments for the masses had an electronic access which has revolutionised the country.
Within a year, one in five Safaricom users were using M-PESA to make payments, and one in ten Kenyans had used the service. By November 2009, M-PESA had become the world’s biggest mobile money service with over 10% of Kenya’s GDP moved by mobile payments. Accidentally, Safaricom had become the biggest bank in Kenya with 8 million users registered and over $2 billion transferred by mobile.
Now M-PESA is being expanded into Nigeria, South Africa and other African countries, whilst banks are saying that customers are actually switching banks to get mobile channel access.
Now jump to Japan.
A bank launched in Japan in June 2008 called Jibun Bank.
Jibun Bank is a mobile only bank. The Bank is designed for access via mobile only. You try to use the bank online, and it’s rubbish. As for branches, forget it. This is a multimedia rich, mobile only bank.
The bank is a joint venture between the Bank of Tokyo-Mitsubishi UFJ and telecom operator KDDI.
Jibun Bank, which means my bank, gained 500,000 account openings in just eight months and, after eighteen months, had Y140 billion ($1.5 billion) of deposits by December 2009, from over 850,000 accounts.
At the start of March 2010, the bank opened their millionth account.
What is the point of these three short case studies?
Well, there are many, many examples of banks innovating with mobile worldwide today, but the lesson is this.
In 2004, bankers believed this revolution would not take place in their lifetime.
One banker actually said to me, in writing: “I think this idea is way out there – ten to twenty years – before this plays out in any sizable way.”
Six years later, the battleground is already defined and being won.
Are you fighting in this space?
Have you lost already?
Earlier this year we surveyed the Financial Services Club members and readers of the Finanser for their views on social networking and social media in banking.
In February, we published the initial results as a qualitative report and now we have crunched the numbers to produce the quantitative report.
There were 444 respondents to the survey:
106 Banks
62 Corporates
60 Technology Firms
56 Consultants
48 Governments, NGO, Charities
44 Non-Bank FI’s
25 Professionals, Academics and Media
38 Others
69% were from Europe, 15% from the USA, 6% from Asia and 10% from elsewhere.
5% are Board Members, 5% Heads of Division, 20% Directors and 37% Managers.
The results are a fascinating insight into what folks are thinking, with many saying that social networking and media - particularly LinkedIn, Blogs and Privately Managed Communities - will be key for banking relationships in the future.
For example, 40% of respondents think that social media is critical (4%), very important (16%) or important (20%) for bank relationships today; with this figure increasing to 67% if looking five years ahead when 17% believe it will be critical for bank relationships by then.
93% of respondents believe that a focus on social media is essential to the future
of financial institutions and only 1% feel their institution would be likely
to decrease their use of social media in the next two years ... only 1 per
cent!
All indications are that this is a hot topic for pretty much
every service organization out there which is surprising as so few firms
are doing anything about it!
Both reports - 36 page data summary and 30-page qualitative analysis - are available for $99.
If you click the button below, just enter your credit card details by pressing the 'continue' button on the lower left hand side of the screen. This will trigger an email to our admin to send you BOTH reports for just $99 in total.
The headline for me out of this analysis is that, if you're in financial services and wondering whether Facebook, YouTube
or something else will be effective for your future business, then overwhelmingly it is something else other than Facebook!
It's well worth reading the whole 20-page report but, if you don’t have time, here are the stats (always useful).
Social Audiences
Facebook is the globe’s largest online social network with over 350 million users.
Facebook’s audience is bigger than any TV network that has ever existed on Earth.
Were it a nation, Facebook would be the world’s third most populous after China and India.
70% of its audience is outside the United States.
Twitter had 58 million web visitors in October 2009 ... or is it 23 million? See end of this entry.
Facebook took almost five years to get its first 150m users, but just eight months to double that number.
LinkedIn has over 58 million members, and it took 16 months to reach its first million users whereas the most recent additional million came on board in only 11 days.
Mobile Social
eMarketer estimate that over 600 million people will use their
phones to tap into social networks by 2013, a more-than-fourfold
increase on last year’s 140 million.
Facebook has 65 million mobile users.
Social Content
Facebook’s users post over 55 million updates a day and share more
than 3.5 billion pieces of content with one another every week.
Over 2.5 billion photos a month are uploaded to Facebook, making it one of the largest photo-sharing sites on the web.
Facebook has one engineer for every 1.2 million users.
Facebook has over 1 million developers creating software for it and its online directory contains over 500,000 apps.
Twitter has spawned over 50,000 apps, including offerings from
firms such as Twitpic, which lets people post photos to their Twitter
feeds, and Twitscoop, which highlights popular topics being talked
about on the service at any moment.
Social Revenues
Facebook does not reveal numbers, but its revenues last year are
thought to have been at least $500m and quite possibly more, which
helped it to turn cash-flow positive in mid-2009.
Although user numbers were sharply up last year, the
social-networking industry’s revenues in America, its biggest
advertising market, rose only by a modest 4% to $1.2 billion according
to eMarketer, a market-research firm.
That was still an achievement, because the total online advertising
market shrank in 2009 and MySpace revenues, the largest share, are
thought to have fallen last year.
This year eMarketer expects revenues to grow by over 7%.
ComScore found that one in five adverts viewed by American web
users last June ran on social-networking sites, with MySpace still
accounting for the biggest chunk of the total.
Social Games
In 2008 Tencent, the Chinese ‘Facebook’ which runs QQ coins, listed on the Hong Kong Stock Exchange and reported revenues of just over $1 billion, with $720m coming from online gaming and sales of items such as digital swords and other virtual goods.
Ning, another social networking tool, is targeting gifts rather than games and launched an initiative in October 2009 that allows people to sell customised digital items to their members. These cost anything from 50 cents to $10, and over 400,000 are being exchanged every month, splitting the profit equally with its customers.
In the game “Sorority Life”, users complained about the lack of virtual men to date so Playdom quickly introduced some last November – some 10 million of the boyfriends were promptly snapped up with a few players buying as many as 500 boyfriends each; some paid for their digital darlings with virtual credits won in the game, but others stumped up over $5 a time for their beaux.
Although Asia remains by far the biggest market for digital knick-knacks, Inside Network, a research firm, has estimated that sales of virtual wares in America on many different kinds of websites reached $1 billion last year and could grow to $1.6 billion in 2010.
ThinkEquity, an investment bank, reckons that revenues in America from social games could hit $2.2 billion by 2012, a big leap from last year’s $375m million.
“The best virtual goods have real currency,” says Mark Pincus who runs Zynga, on eof the biggest gaming firms on Facebook.
Social Marketing
A survey of 1,000 heavy users of social networks and other digital media conducted in August 2009 by Razorfish, found that 44% of those following brands on Twitter said they did so because of the exclusive deals the firms offered to users.
One in five tweets mention specific brand names in the updates.
O2 found that 17% of Britain’s small businesses were using Twitter to attract new customers and some believe they have saved around £5,000 ($8,000) a year from other forms of marketing by doing so.
Social Hiring
US Cellular, a telecoms company, says it saved over $1m last year by using a LinkedIn system that produced good candidates for its jobs faster than traditional recruitment channels.
A survey by CareerBuilder.com of about 2,700 executives in America last year found that 45% of them looked at job candidates’ social-network pages as part of their research, and more than a third of those had unearthed information there that put them off hiring someone.
Social Not-working
A survey of 500 small businesses in America conducted by Citibank last October found that most of them had not used online networks at all because they thought they would be a waste of time.
Morse estimate that personal use of social networks during the working day was costing the British economy almost £1.4 billion ($2.3 billion) a year in lost productivity.
Nucleus Research, an American firm, concluded that if companies banned employees from using Facebook while at work, their productivity would improve by 1.5%.
A survey of 1,400 CIOs by Robert Half Technology last year found that only 1/10th gave employees full access to networks during the day, and many were blocking Facebook and Twitter altogether.
If you like this sort of thing, then please join our survey on social media in finance. Click to take the survey: https://www.surveymonkey.com/s/NXWW2B3The survey is closing very soon, so feel free to join the 425 professionals from banks, corporations, consultancies, governments and the professions who have responded so far. Results published at the end of the month. Meanwhile, if you like this sort of thing a lot, then here’s a few more social media numbers, this time from this year’s World Economic Forum (WEF):
WEF reached a worldwide audience of 430 million readers online through the use of social networks this year.
Facebook ran real-time pulses, polling over 200,000 people and bringing their views into the discussions.
WEF has over 6,300 fans on Facebook.
Webcasts of public sessions on Livestream reaching a cumulated audience of over 210,000 viewers.
News conferences were seen by over 70,000 people, and they could put questions to panellists via Twitter and Facebook.
Over 250 participants and 120 journalists continuously sharing their impressions on Twitter
A Twitterwall allowed participants to see a running micro-commentary on the meeting as it progressed.
‘Davos’, ‘WEF’ and ‘WorldEconomicForum’ were mentioned 30,000 times on Twitter.
UPDATE: I ran a competition related to this entry asking folks to say how many visitors went to twitter in October 2009. The Economist had the figure 58 million but the winning entry sent me this from Usuable NZ:
Just checked out Safaricom's results presentation for the first half-year 2009-2010, and found some interesting slides on M-PESA:
Fascinating results ... especially as Safaricom were not the instigators of M-PESA.
At the start, they could not commit to a risky project of this nature with resources and so Vodafone brought in a third party firm, based in Cambridge and led by Dr Tim Murdoch. Tim happens to be joining our panel on 11th March on "Innovations in Bank Retailing", alongside Errol Damelin, Founder & CEO of Wonga.com, and Michael Davison, Senior Managing Consultant with IBM Global Business Services.
Tim's team were integral to the launch of M-PESA and not only wrote the software but also designed the business processes and provided operational and technical support during the pilot and after launch.
If you're interested in this area, come and join us on 11th March by registering to attend.
I was just writing a paragraph about mobile for a client's report, when I realised what I had written:
This year has seen dramatic innovations in mobile usage, such as those of the Bank of America in the USA. According to Doug Brown, SVP at Bank of America responsible for their mobile banking channel, they saw 300 percent growth in mobile customers from 2007 to 2008, and had 2.2 million active mobile banking customers in April 2009 rising to 3.5 million by November.
This is due to rapid take-up during 2009 with 150,000 new mobile customers in September, 210,000 in August and 220,000 in July.
No wonder Bank of America are claiming that they have 35% of all mobile banking users in the USA, with 150,000 new deposit accounts opened purely because they offer this service.
Many of the numbers came from Jim Bruene's write-up of this year's BAI event.
At the same event in 2003, I asked the US banking audience when mobile would take off in banking, and they all said it was too insecure.
"Not in my lifetime" said one banker, whilst another said, "maybe ten or twenty years, but it would take Wal*Mart or Virgin to make it happen".
Wrong.
It was Bank of America.
They launched in August 2007 (less than three years after those comments) and had 500,000 customers by November 2007 and a million by June 2008.
Just received a press release from the UK Payments Council that makes interesting reading.
The figures show that spending by card, cheque, cash and automated payments over the last six years has changed little, beyond the usual variance to consumers' payment habits, despite the difficult economic conditions.
The latest quarterly figures reveal that:
The number of plastic card purchases - which includes debit and credit card purchases combined - rose this quarter by 6.9% and the value of purchases rose by 4.3%, compared with Q3 2008.
Credit card spending by value fell by 0.7% although the number of credit card purchases increased by 2.5%.
Debit card spending by value rose by 6.9% and 8.5% by volume when compared with Q3 2008.
Gross credit card lending, which reflects all new spending on credit cards and includes interest, was 7.5% lower than in the 3rd quarter 2008. Reflecting this lower spending, repayments also fell but by 4.7%. Consequently the annualised ratio of repayments to new lending increased to 98.1% compared with 96.4% in Q3 2008.
Debit cards dominated non-cash spending for the first time. Previously when reviewing all payments not made by cash, Direct Debits and Direct Credits made up the greatest number. However, this quarter debit cards accounted for 40.2% of all non-cash payments, whereas Direct Debits and Direct Credits made up 39.1%, when combined.
Cheque and credit clearing volumes fell by 13% and values by 19%, between Q3 2008 and Q3 2009.
The volume and value of Faster Payments rose by 11% and 12% respectively during Q3 2009, when compared to Q2 2009 - demonstrating the ever increasing use of the new service from one quarter to the next. This quarter, 47% of all standing orders and 73% of telephone and online banking payments were made using the Faster Payments Service.
CHAPS Sterling volumes and values fell, as they were down 6.3% and 12.5% respectively from the corresponding quarter last year.
The number of cash machine withdrawals rose by 0.5% compared with Q3 2008, whilst the amounts withdrawn fell by 0.7%.
For a while now Monitise, the mobile payments processing firm, has been researching views on the future of banking with the Future Foundation, part of Experian.
Their objective is to find out how our relationship with money is changing and to understand how the culture of money will develop over the next few years.
The first research report was published last December, and focused upon the mobile internet and what that would mean for financial providers.
The second report came out in May 2009, and concluded that “consumers, led by young people, are migrating away from cash and towards digital transactions. The overwhelming benefit of convenience underpins the appeal of digital transactions and so does a deepening sense of trust in the technology.”
The latest report finds that Britons prefer doing their own banking, and would deliberately choose a computer or a mobile phone to manage their finances before phoning a call centre. They don't want to deal with people in other words - whether in branches or call centres - but want to self-service wherever and whenever possible.
Key results include:
One in five of us would prefer to log-on than dial a call centre and speak to a person
This preference has grown rapidly - up from 1 in 20 in 2002 - as technology has improved and broadband become more widespread
Unsurprisingly, it is the younger generation leading the way – with more than a quarter of 18 to 25 year-olds opting for technology ahead of the human touch
Pensioners are also getting in on the do-it-yourself act, with one in ten logging-on or using their mobile phone to manage their money instead of call centre
Fulfilling gender stereotypes, more men than women said that a major benefit of using technology to do their own banking was the lack of other people (22% compared to 13%)
The latest report was produced by the Future Foundation asking 1,000 adults in the UK for their views on the role of technology in customer service. The report is released on Wednesday.
All in all, it made me think it's just another hole in The Wall ...
Customer:
We don't want no human service,
We don't want your bank controls.
No charges or fees on my accounts Banker, leave my cash alone. Hey Banker! Leave my cash alone.
All in all, I only want ... Another hole in the wall.
And, after a comment on silo-based functions in banks the other day, I thought that Bankers could respond with:
We don't want no integration, We don't want no consistency. No surly clients in the branch rooms Customer, leave those tweets alone. Hey Customer! Leave those tweets alone. All in all, please just use ... Another hole in the wall.
A cheque processing conference sounds pretty dull these days, especially as cheques are on their way out across most economies. However, a cheque processing conference celebrating 350 years since the oldest surviving cheque was written? No, not that boring.
In fact, as I’m a sucker for numbers and facts, the annual conference of the Cheque & Credit Clearing Company (CCCC), which took place this week was surprisingly interesting.
An audience of over 100 folks from banks and technology companies attentively listened to presentations from the CCCC folks, the Payments Council, Visa and yours truly, with interest.
First, the bad news. The cheque is going to die a slow and interminably difficult death over the next eight years. It is to be phased out in 2018 according to the UK Payments Council’s National Payments Plan. It will no longer be a valid form of payment. In fact, the cheque guarantee card is being phased out even sooner, in 2011. And no-one is going to miss it or its paper based attachment.
Second, the good news. Because there will still be an estimated 600 million cheques being written in 2018, compared with 1.4 billion this year, the cheque will still be around and yes, will be honoured and processed for a period thereafter.
This kind of confused me – is the cheque dead or is it a case of long live the cheque. Well, it turns out that it is long live the cheque as, even with the Payments Council announcing its imminent demise in 2018, this is unrealistic. The banks, cheque processors and cheque users you see, don’t want it to die away that fast.
And this is because there are still not enough viable alternatives to a cheque.
You know, the old line of: “the cheque’s in the post”; what would you do without it?
So, the intention of getting rid of this 350 year old dodo is not quite that simple.
The CCCC guys then proceeded to present a very nice piece of research on people’s perceptions of cheques and the history of the cheque.
I’ll detail more about these over the next couple of days.To begin with, here’s a few short history of the cheque, summarised from the CCCC website:
The predecessor to the cheque was the ‘bill of exchange’, which was developed in Florence in the 12th century to help traders buying and selling goods without the need for quantities of gold and silver.
During the 17th century, bills of exchange started to be used for domestic payments and cheques, began with one of the earliest handwritten cheques known to be in existence in the UK written on 16th February 1659 by Nicholas Vanacker to a Mr Delboe for £400, about £45,000 by today’s standards.
During these early days, they were exchanged informally between the City’s bankers as it was before the days of a clearing house, with the bankers settling any net differences between the cheques they exchanged on a regular basis.
Then the Bank of England was formed and, at their first meeting on 27th June 1694, an account was created which allowed customers to draw notes on the Bank up to the extent of their deposits. These were the immediate precursors of the modern cheque.
The Bank of England persuaded customers to use printed forms over time, with the first printed cheques produced in 1717. The printed payment documents had scrollwork along the left-hand edge that could be cut through, leaving part of the scroll on the cheque and part on the counterfoil.
Checking that the scroll on the cheque and counterfoil matched was the real ‘check’ banks made to ensure a cheque was real.
The first cheques printed with the name of the issuing bank were produced from as early as 1735. The Commercial Bank of Scotland (now Royal Bank of Scotland) is believed to have been the first bank to personalise customers’ cheques around 1810, printing the name of the account holder vertically along the left-hand edge. Over the years the process of producing, using and processing cheques has gradually become more sophisticated. For example, the settlement of payments was originally an informal exchange until about 1770, when the practice of clearing was officially recognised by the private bankers in the City. As a result, a room was hired specifically for the clearing of cheques and bills in the “Five Bells” tavern (just off Lombard Street) in 1773.
Later, a permanent committee of bankers was formed (later known as the Committee of London Clearing Bankers) to regulate clearing and the first clearing house building was built in Lombard Street in 1833.
This building was used for cheque settlement processing, in this way, until 1994!
Basically, clerks would keep the cheque settlement books for each bank and then compare credits and debits and net positions at the end of their book-keeping cycle. This would determine who pays what to whom between the bank counterparties.
Suprisingly manual, but this was replaced by an automated system from 1995 onwards.
The first cheque card was introduced in October 1965, guaranteeing payment of sterling cheques up to a value of £30. This limit was raised in 1977 to £50 and then £100 and £250 limits were introduced in 1989.
In July 1969 the UK Domestic Cheque Guarantee Card Scheme was established to create common, easily-identifiable design features to simplify acceptance procedures for retailers and other businesses. This card is phased out at the end of June 2011.
In 1990, UK cheque usage peaked with 9.7 million cheques processed per day, peaking at 80 million a day.Today, that number is averaging 3.5 million cheques per day.This means that cheques have moved from 11% of all payment volumes in 1990 to just 3% today.
British Airways Business Magazine leads with an in-depth article on barter. Some great numbers here:
500,000 + companies across the world belong to a barter system
One of its leading proponents is Bartercard, an Australian based
company with around 75,000 members worldwide.
A$1.5bn was bartered in the
company’s marketplace last year.
Goods are priced at their normal cash value and Bartercard’s cut is 6.5
per cent (5.5 per cent in cash and 1 per cent in trade) of the value of
each transaction to both parties.
The US-based International Reciprocal Trade Association says that
American barter exchanges now stand at 250,000, up from 200,000 five
years ago.
Bob Meyer, the publisher of Barter News, told Forbes that he reckoned
that in the US a million small businesses bartered in some way and that
the transactions were worth $20bn annually.
Meyer said he
expected barter to grow at 10 per cent this year (5 per cent is more
normal) as when cash is tight, interest in bartering increases.
China signed a barter deal with the Democratic Republic of the Congo
worth $9bn — the largest ever. China committed to build the country
$6bn worth of infrastructure in return for a slice of its mineral
wealth. Both parties held the deal up as a win-win.
Just found a few numbers on mobile money users and thought it worth sharing:
The market for mobile applications, or apps, will become "as big as the internet", peaking at 10 million apps in 2020 according to Symbian.
CGAP produced a recent survey on Financial Access and found that there are 6.2 billion bank accounts worldwide - more than one for every person on the planet - except that 70% of adults in developing countries do not use formal financial services, or are unbanked, compared to 20% of those in developed countries.
Of the 139 countries that CGAP surveyed, only 40 reported that they encourage or mandate government transfers through the banking system; 14 of these are high-income countries and 10 countries in Latin America. Few countries in other regions are promoting such transfers.
The survey predicts that the mobile payments market could be worth as much as £365 billion by 2013, with 110 million users in Europe alone by 2014.
By the year 2012 CGAP and GSMA estimate there will be 1.7 billion people with a mobile phone but not a bank account and as many as 364 million unbanked people could be reached by agent-networked banking through mobile phones.
CGAP estimate that mobile financial services to poor people in emerging economies will increase from nothing to $5 billion in 2012.
40% of Kenyan households have used M-PESA as of late 2008, a figure announced by Caroline Pulver of FSD Kenya as she unveiled the findings of their survey (see pdf)
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