Description Mid-code Crisis www.thefutureofbanking.org/ Tue, 01 May 2012 09:10:00 Tue, 01 May 2012 09:10:00 Andrew Hebron /blog/2012/may/adding-value-to-treasury-services-swift-operations-forum-highlights-standardisation-as-a-crucial-component-in-the-differentiation-of-core-banking-services/ Speakers at the recent SWIFT Operations Forum considered standardisation and partnerships crucial components of innovation and differentiation in the new corporate banking and payments environment. Katherine Burger reported on the event at BankTech.com , first making the point that treasury services have proved to be a resilient and dynamic foundation for bank growth throughout the challenge of the financial crisis and new regulations. She adds: "But that success also has raised the stakes for banks by increasing competition, putting pressure on pricing and profitability, and - most important - raising the expectations of corporate customers for their banks to provide more transparency, interactivity and innovation." Forum speaker, Bank of America Merrill Lynch's managing director and head of global payments, Alther Williams III, talked about the need for payments simplicity - through standardisation - but at the same time cautioned against commoditising services. Until recently, banks have seen standardising as the slippery path towards commoditisation so his comments highlight an interesting conundrum. How to standardise without commoditising? Director, payments product executive, Bank of America Merrill Lynch, Yvette Bohanan's utopian view might be the answer. She says that in an "intelligent payments" environment ─ one based on standardisation and partnerships ─ banks can differentiate by adding value and insight. It gives banks the means to create services that deliver greater choice, convenience, and control to their customers. Which, she explains, are all customers really want.  "You're not afraid of commoditization if it helps you get to differentiation," she says. So perhaps it's more useful to move away from the idea that banks should resist commoditisation, and spend more time thinking about ways to add value. The 'brand', which we've talked a lot about on the future of banking in relation to social and mobile, also has an important role to play in treasury services. In the words of BrandChannel.com writers Joseph Benson and Jack Foley: "... (Banking) products and services themselves may be so similar from one bank to another to be considered commodities, but there is one thing that can never be commoditised-a bank's brand. Brand is what ultimately defends banking from the doom of commoditisation." /blog/2012/may/adding-value-to-treasury-services-swift-operations-forum-highlights-standardisation-as-a-crucial-component-in-the-differentiation-of-core-banking-services/ /blog/2012/may/adding-value-to-treasury-services-swift-operations-forum-highlights-standardisation-as-a-crucial-component-in-the-differentiation-of-core-banking-services/ Tue, 01 May 2012 09:10:00 +0000 Tim Tyler /blog/2012/april/leading-the-way-in-banks’-social-media-affections-twitter,-by-a-nose/ It doesn't seem so long ago that Facebook held sway when it came to the financial industry's affections. And with the addition of the Timeline feature, many pundits (including this one) assumed that banks and others would keep Facebook in front by showcasing their brand, promoting services and delivering customer advice with the new look and feel. But now, it seems, Twitter has the edge. According to a new report from Corporate Insight, Social Media Leaders, activity on Twitter now outpaces Facebook, with 92 percent of the firms using social media to engage with clients having a presence on Twitter. That compares with 88 percent using Facebook. However, both platforms have seen significant growth since 2010, when 57 percent used Facebook and Twitter followed behind with 51 percent. That said, Facebook Timeline is gaining traction since its launch at the end of last year and mandatory implementation for fan pages at the end of March. Many firms are using this feature to tell the story of their business, using the 'life event' feature to build brand awareness and 'humanise' the milestones in the development of the organisation. In the example of a bank such as Wells Fargo, called out by the Corporate Insight report, the business uses the timeline to reference the 'birth' of credit cards in 1967. But Twitter continues to dominate. A business like Vanguard has successfully personalised its Twitter account using photos of advisors on its home page. But this only tells part of the story. Smart banks, who can offer the resources, are using Twitter as a platform independent texting service, posting up to the minute tweets, 'answering general questions, responding to praise and criticism and dealing with customer service issues'.  Vanguard now has more than 50,000 followers, making it the most popular account from a mutual fund and ETF company amongst the firms tracked by the report. Download the report /blog/2012/april/leading-the-way-in-banks’-social-media-affections-twitter,-by-a-nose/ /blog/2012/april/leading-the-way-in-banks’-social-media-affections-twitter,-by-a-nose/ Fri, 27 Apr 2012 09:27:00 +0000 Amol Patil /blog/2012/april/off-the-shelf-strategic-business-intelligence-for-banks-advantages-of-a-pre-configured-strategic-decision-support-system/   Business Intelligence for Banking A large number of organizations in the financial sector are turning to business intelligence (BI) and data warehousing technologies to use facts-based decision making. These technologies are collectively referred to as business analytics solutions. Organizations that have adopted these solutions to enable better decision making report positive results. Research conducted by IDC in February 2011 shows that managers at the most competitive organizations are two times more reliant on business analytics (rather than intuition) than managers at their least competitive peers. The most competitive organizations indicate two times more frequently that output of BI solutions is very influential on actions taken by their employees.  The Decision to Build vs Buy BI The concept of buying a data management and business intelligence solution off-the-shelf may seem to be quite daunting to quite a number of IT decision makers. The natural instinct for most is to "build-it" as compared to "buy-it-prebuilt"; this instinct manifests itself as a result of prior negative experiences from a "customization" project that was commissioned with a mission to extensively extend an off-the-shelf product, or from organizational pressures around ownership of a business intelligence application.  Whatever the driver for such hesitation may be, the overall build-vs-buy decision must consider the Total Cost of Ownership (TCO) of the business intelligence application. Several studies have been made across industry verticals that indicate the the major component of the TCO of a business intelligence is the actual resourcing and effort costs involved up front, which most often exceed many thousands of man days. A business intelligence application, even in its most localized departmental format, is a considerably large bespoke project that demands proper dedicated organization, a high level of specialized skill sets for development, quality assurance and subject matter expertise, as well as dedicated hardware and software resources. Despite the availability of all of these dedicated resources, a business intelligence project is almost always subject to high risk of failure. The rate of failure amongst such bespoke business intelligence projects is almost 50-70%, with most projects running over budgets and schedules with high cost overruns.  Advantages of an Off-The-Shelf Starter BI Application Obvious specific advantages to be highlighted in favor of a prepackaged business intelligence application include: Rapid deployment (a starter data warehouse in weeks rather than a bespoke months and in some cases even years) Minimal skilled development resource overheads since the prepackaged BI vendor has already invested in these resources Optimized and performance tuned system performance Simplified technology acquisition and support options  Ease of maintenance and upgradability Professional and expert coverage for extensions and customizations A range of built-in features out-of-box such as data reconciliation for audit, extensive guidelines, documentation Of course, procuring an off-the-shelf BI application is not the end of a program, but rather the initiation of a long term strategic investment in a platform that offers flexibility to adapt future business needs. Misys Business Intelligence for Banking When it comes to building a business intelligence solution for driving analytics and business decisions based on data contained in a core banking platform such as Misys Midas, Equation or Universal Banking, it therefore makes better sense to assess a product that already has integrated the logic and routines required to process the data contained in these complex systems. Misys Business Intelligence is a purpose-built business intelligence product specifically designed to interface with each of the Misys core banking systems to extract, transform and process data for management reporting. Misys Business Intelligence for Banking includes the following features out of the box: Robust and industry-leading business intelligence technology platform based on IBM's groundbreaking software - Infosphere and Cognos Pre-built management reporting analytics packs including business critical measures such as profitability, financial reporting and credit risk analytics, with a capability to extend out to additional subject areas Pre-packaged, performance tuned, on-trigger or on-demand schedule-able data movement routines specifically built to interact with Misys banking systems Flexible and extensible data models for the data warehouse and data marts that can be augmented with external data Prepackaged automated data reconciliation and test automation frameworks to support on-site user acceptance (optional add-ons) The technical advantage offered via Misys MBI in comparison to a bespoke custom business intelligence program is two-fold -  The purchaser gets a fully optimized and extensible system based on the banking expertise of Misys that can be purchased as a single unit, and  The availability of reference architecture encased in an industry-leading IBM software platform.  A serious consideration should therefore be given to Misys Business Intelligence as a leading choice for rapidly implementing business intelligence in banks that have already made investments in Misys core banking transactional systems. /blog/2012/april/off-the-shelf-strategic-business-intelligence-for-banks-advantages-of-a-pre-configured-strategic-decision-support-system/ /blog/2012/april/off-the-shelf-strategic-business-intelligence-for-banks-advantages-of-a-pre-configured-strategic-decision-support-system/ Sun, 15 Apr 2012 05:35:00 +0000 Andrew Hebron /blog/2012/april/sign-of-the-times-–-global-spend-is-on-the-increase-as-banks-get-serious-about-transforming-core-platforms/ Finextra reports on recent Celent research   that predicts the core banking market will grow to $5.1 billion by the end of 2013. Asia Pacific banks lead the charge, spending around $2 billion of the $4.8 billion spent on core systems in 2011. That's double the amount handed out in Western Europe and North America. Celent cites several factors for the increase, including a growth in confidence of local telecommunications services and newfound confidence in using hosted financial services. For example, in emerging markets such as Africa, telecommunications infrastructures are steadily improving, providing financial start-ups with the opportunity to create agile, cost-efficient platforms that support growth. By launching core banking platforms in centralised, hosted environments, start-ups and small banks stand to gain a real competitive edge - quickly and easily responding to customer demand and new expectations around technology and services. That said, larger banks with disparate systems increasingly view hosted implementations as a viable way to run core platforms. Stephen Greer, analyst, banking group at Celent, highlights how tier-one banks have much to gain by preparing for the 'inevitable'. He says: "Coming out of the economic crisis, banks scaled back their IT spending, but spending has started to rise. The total number of core deals from 2010 has decreased slightly, yet the overall deal sizes have increased, and the future is looking better for the core banking industry." /blog/2012/april/sign-of-the-times-–-global-spend-is-on-the-increase-as-banks-get-serious-about-transforming-core-platforms/ /blog/2012/april/sign-of-the-times-–-global-spend-is-on-the-increase-as-banks-get-serious-about-transforming-core-platforms/ Thu, 12 Apr 2012 10:52:00 +0000 Stan Nouy /blog/2012/march/from-itunes-to-ibanking-survey-sounds-a-warning-to-banks/ Ready to bank with Apple? If you are then you're in good company. According to a recent report  one in ten people (10%) would consider banking with Apple. Of those who are already Apple customers, 43% would consider switching to Apple for their day-to-day banking needs. The report, by strategic marketing and research consultancy KAE, in conjunction with Toluna, an online polls and surveys business is based on data from over 5,000 respondents, across the US and UK. According to the results, the impressive levels of trust generated between Apple and its customers was the main reason given for a possible switch to an Apple Bank, with around two-thirds citing their trust in the brand (66%) as the primary reason, and just over half claiming they think Apple would make their account easy to access and manage, as well as providing a reliable service. Lee Powney, Chief Commercial Officer at KAE, says: "This research tells us Apple customers perceive a fit where at first glance we would assume the brand could not travel. Apple's ethos, its way of being and way of doing is instinctively understood by its customers. This makes it a truly dangerous animal to a startling array of sectors." Why are people so keen on an iBank? The relationship between customers and Apple certainly depends on a high degree of security and trust. After all, even if the company doesn't hold their savings, it does safeguard much of their cultural investment in the form of digital music, videos, books and more. But there are other, critical factors at work here. It's also fair to assume that consumers don't believe that mainstream banks have achieved the fine balance of trust and brand intimacy enjoyed by leaders in the online world. And while Apple itself may not be something to fear if you are bank, it's what the company stands for collectively that is much more daunting. If, and it's a big if, Apple, Facebook and Google were to expand beyond their current dalliance with financial services, the disruption would be enormous. And if one of these giants made a move then others would be sure to follow. Apple? Banks should be less wary of one big name and more concerned about the domino effect. /blog/2012/march/from-itunes-to-ibanking-survey-sounds-a-warning-to-banks/ /blog/2012/march/from-itunes-to-ibanking-survey-sounds-a-warning-to-banks/ Thu, 29 Mar 2012 15:36:00 +0000 Stan Nouy /blog/2012/march/apple-iwallet-all-bets-are-off/ We saw this coming. Honest. Ok, so a couple of days ago we posted an article  that pessimistically predicted that it could take up to five years for over the air payments to hit the mainstream. But one thing stuck in our mind - a comment posted at the end of a financial technology blog to the tune of 'if Apple puts it on the iphone, then all bets are off.' And guess what. On March 6, the U.S. patent office granted Apple a new patent for a technology called iWallet, building on earlier patent applications last year.  Look at this in more detail and it becomes clear that Apple, wise to the risk of other device manufacturers stealing an advantage in mobile payments, has come up with a pretty slick proposition. In short, the patent describes how the iPhone, Macs and iTunes could connect to enable over the air transactions - NFC appears to be a key component of the solution. You can read more about the patents here . But the implications for 'device as wallet' are immense. Let's not forget that when the iPhone was originally launched in 2007, it was promoted as a phone. Today it can comfortably claim to be the consumer device of choice that replaces the handset, computer, gaming machine and more. To replace one more thing in your pocket, a wallet, seems the only natural progression. Especially considering its experience of controlling online identities and payments through its iTunes store. Like the comment said, all bets are off - and manufacturers of leather wallets are suddenly looking a bit nervous. /blog/2012/march/apple-iwallet-all-bets-are-off/ /blog/2012/march/apple-iwallet-all-bets-are-off/ Thu, 22 Mar 2012 11:09:00 +0000 Tim Tyler /blog/2012/march/axa-opens-its-api-arms-to-app-developers/ First Credit Agricole, now AXA. Since the start of this year, two French banks have opened their API arms to third-party developers with the aim of expanding and enhancing their existing app offerings. As we've discussed before at the Future of Banking, apps are an excellent way for banks to reclaim the customer experience   from start-ups and other market entrants of the past decade. In the case of AXA, the bank has offered a 50,000 euro prize for the developer that comes up with the best application. It's not hard to see why the bank wants to open the doors to the widest possible developer audience. This open approach is ideal for way to tap into a wide range of developer expertise that could be the source of the next innovative banking solution. It also indicates the extent to which banks are prepared to innovate from the top down and create clusters of apps that might offer granular functionality, but which could produce a groundswell of enthusiasm from customers who increasingly turn to smart phones and tablets as the default device for interactions for service providers and retailers. In the case of Credit Agricole, it has launched an application marketplace and software developer kit earlier this year, and aims to build on the bank's existing My Budget application that already has more than 300,000 unique users. There could well be secondary benefits as well. Developers may be more inclined to join in-house teams when they know they can build software at the cutting edge. AXA and Credit Agricole may not just end up attracting customers, they could also push to the head of the queue when it comes to attracting talent. /blog/2012/march/axa-opens-its-api-arms-to-app-developers/ /blog/2012/march/axa-opens-its-api-arms-to-app-developers/ Mon, 19 Mar 2012 17:09:00 +0000 Tim Tyler /blog/2012/march/nfc-here’s-why-you’re-waiting/ Still waiting for NFC to hit the big time? Better get ready to wait a whole lot longer. According to a new survey   it could be up to five years before the over-the-air payments system reaches mass-adoption. The news comes in a report from Sybase 365, a subsidiary of Sybase, Inc. The company polled mobile industry experts at the GSMA World Congress 2012 to get their views on the technology. Some 81 percent of participants believe that NFC will not be a driver for mobile payments for at least two to five years.  Less than 10 percent think that this will be achieved in the coming year. It's not just the mobile industry that is the barrier. However impressive the NFC experience, experts remain convinced that it will take some time to convince consumers that over the air transactions are secure. Here, some 38 percent of participants stated that these concerns would be the leading obstacle to mass-adoption of payments. Other issues cited in the survey include the proliferation of standards and the collaboration needed between different mobile stakeholders including device manufacturers, financial institutions, and retailers. Get this right, however, and 50 percent of respondents believe that this will drive take up of the technology. As for the businesses that will drive mobile payments, it was a pretty even split between mobile operators (26 percent) and banks (24) with companies such as PayPal and Amazon coming in behind (19 percent). /blog/2012/march/nfc-here’s-why-you’re-waiting/ /blog/2012/march/nfc-here’s-why-you’re-waiting/ Fri, 16 Mar 2012 12:42:00 +0000 Andrew Hebron /blog/2012/march/from-bankers-to-bookworms-how-the-financial-crisis-has-been-a-much-needed-shot-in-the-arm-for-publishers/ If the financial crisis wasn't good news for the economy, it's been great for the arts. Bankers are under the spotlight in books, movies, TV documentaries, plays - even a statue . No great surprise there. The crisis offered up all the ingredients needed for a cracking story: greed, pride, fear, suspense and a heavy dose of hubris. John Lanchester's new state-of-the-nation novel Capital is a fine example. You can catch it being serialised on the radio  this week.  Right at the heart of the story sits - you guessed it - an old-school city banker, Roger Yount, whose dizzying decent from have-yacht to have-not lies at the heart of the plot. Lanchester has (good) form here. An earlier work of non-fiction - Why Everyone Owes Everyone and No One Can Pay - was one of the better attempts to describe the machinations of the financial crisis in layman's terms. The book is similar in tone to David Hare's play, The Power of Yes , which surfaced around the same time, although Hare's mixture of drama and slightly plodding 'what-is-a-hedge-fund' style digressions left some critics cold. Meanwhile Robert Harris's thriller The Fear Index   looks more closely at the troublesome point where advanced technology meets the financial systems, a story inspired in part by the May 2010 'flash crash'. Other worthy non-fiction attempts to deconstruct financial Armageddon include Gillian Tett's Fool's Gold and Michael Lewis, of Liar's Poker fame, offering us a clear account of the crisis with The Big Short . Mind you, there's always the next big thing. At the end of last year, Lewis was back on the scene with a non-too flattering account of the Euro-zone rollercoaster with Boomerang, The Meltdown Tour . The way things look, it's unlikely he'll be the last to cover the trans-continental currency fiasco. For writers and publishers everywhere, the financial folly of the past decade is the gift that keeps on giving. /blog/2012/march/from-bankers-to-bookworms-how-the-financial-crisis-has-been-a-much-needed-shot-in-the-arm-for-publishers/ /blog/2012/march/from-bankers-to-bookworms-how-the-financial-crisis-has-been-a-much-needed-shot-in-the-arm-for-publishers/ Thu, 15 Mar 2012 17:27:00 +0000 Barry Kislingbury /blog/2012/march/how-the-online-mafia-are-targeting-the-real-mafia/ Anyone remember the paperless office? Anyone work in one? Thought not. This cautionary tale springs to mind every time I read a new article about the end of cash, or the rise and rise of virtual currencies (I want to buy some groceries, not a sword with special powers). But the discussion won't go away. Not least because everyone knows the so-called advantage of a cash-free society. You know, the one that says that it would kill the drugs-trade overnight along with the redeployment of hundreds of ink-splattered currency forgers into more socially acceptable professions. Fact of the day, you can fit a roll of 25,000 euros inside a cigarette packet . That's because, amazingly, 500 euro notes are still being printed although the U.K. has withdrawn them from circulation. Virtual currencies have a lot of advantages for retailers who may want to offer consumers something for nothing, but keep them within a restricted payments zone. It's not that much different from offering free credit as long as you spend it on an online poker game or a bottle of magic potion that deepens your engagement with the service. You can stretch the definition of virtual currencies even further. Amazon's trade in price for an iPad 2 is noticeably higher than other online marketplaces. Why? Because the company pays out in store credit. Even if its margins are famously tiny, this will no doubt result in some ex-iPad owners investing in a Kindle and thereby tapping into a library of lucrative online content. Others may take the step up to Amazon Prime and start consuming at the levels required to make this service financially viable. In other words, we need to stop thinking about virtual currencies as the prerogative of the swords and sorcery community and gambling communities. Dollar bills and fancy euro notes aren't going to disappear any time soon. But their usefulness to the people who are building the future of retail is rapidly diminishing. Note to forgers: Your days may be numbered but it's more likely to be the people of Amazon than the FBI who put an end to your crafty ways. /blog/2012/march/how-the-online-mafia-are-targeting-the-real-mafia/ /blog/2012/march/how-the-online-mafia-are-targeting-the-real-mafia/ Mon, 12 Mar 2012 16:51:00 +0000 thefutureofbanking.org team /blog/2012/march/from-payments-to-privacy-a-hectic-week-of-banking-innovation/ It's been a busy few days on the futureofbanking. Here's our roundup of the top financial innovation stories on the wires this week.  Payments win prizes. The staggering carve up of the POS customer experience continues. Remember the way that device manufacturers, software developers and service providers constantly switch allegiances in the mobile space? The same thing seems to be happening with POS as card companies, hardware suppliers and retailers fight it out to gain a toe-hold in the burgeoning contact-free, mobile payments space. That's not surprising. Big-name retailers have had it easy in recent years extracting purchasing data from customers and offering point schemes in return for this information. Any encroachment on this territory is largely viewed with suspicion although in the case of Walmart the company stresses that it could do the whole thing so much better. Finextra covered the new initiatives from Walmart and Target earlier this week. Meanwhile Square has broadened its POS tools with an iPAD based solution . In a separate development, Google is flexing its muscles in an attempt to persuade Android developers to abandon PayPal for Google Wallet   as the payment method for app downloads. Privacy. It's time to get real We liked the way Chris Skinner drew a parallel between Google's new privacy policy and the way that bank's manage customer data . In short, banks should emulate the search giant's approach and use data from different activities to better serve their clients. This is another great take on privacy for anyone that wants to understand the revolution in attitudes to privacy among the next generation of banking customers. It was an eye opening read for us; we suspect it will do the same for you. Customer experience: How can banks stake a claim? Finally, we published our own white paper on customer experience earlier this week with a focus on strategies that banks need in order to deliver and leverage the multitude of services that can now be delivered across multiple channels and devices, especially mobile. You can download the whitepaper and watch a video   where Tim Tyler explains how banks can capture customer attention as tablet and smartphone usage surges. /blog/2012/march/from-payments-to-privacy-a-hectic-week-of-banking-innovation/ /blog/2012/march/from-payments-to-privacy-a-hectic-week-of-banking-innovation/ Fri, 09 Mar 2012 15:24:00 +0000 Olivier Berthier /blog/2012/march/paypal-expands-to-all-us-home-depot-stores/ The POS carve up continues with news that PayPal is to make its point of sale service available at all 2,000 U.S. Home Depot stores before the end of the month. At the same time, the news that Walmart  is also launching a service for customers should come as no surprise. It's unlikely that retailers are going to stand back and watch technology companies seize the customer (and customer data) initiative.  In the meantime, here's a video of the PayPal service in action.  /blog/2012/march/paypal-expands-to-all-us-home-depot-stores/ /blog/2012/march/paypal-expands-to-all-us-home-depot-stores/ Wed, 07 Mar 2012 16:42:00 +0000 Tim Tyler /blog/2012/march/pingit-the-empires-strike-back/ It's been a tough couple of decades for the banking sector. Even before the financial crisis kicked in in the middle of 2008, institutions worldwide found themselves in competition with a new wave of online interlopers. Start-ups like Paypal used a simple and secure payments service to grab a significant share of the customer experience. With 100 million active accounts, PayPal would be the 12 largest country by population. Paypal also has significant stake in mobile payments. Some 1 million people downloaded its iPhone app within three weeks of launch in 2010. At first glance, bank sponsored payment apps, such as Pingit from Barclays, can't expect to compete, surely? The app had 120,000 downloads within three days of its launch last month but that's still a drop in the ocean. At least today. When you look further ahead mobile payments is a massive opportunity for growth, even from standing start in 2012. The number of transactions is set to nearly treble from $240 billion in 2011 to $670 billion worldwide in 2015, according to Juniper Research .  In other words there's a huge opportunity here for banks to recapture the customer experience by leveraging their heritage while demonstrating to consumers that they can innovate like the best of them.  The timing is critical too. Barclays Pingit arrives at a time when smartphone use is exploding into the mainstream. The app meets demand from the early-later majority adopters keen to exploit the functionality of their devices, but who are more likely to trust financial applications from a traditional banking brand. Sure, there's a lot of catch up to do, but the door is now open. Maybe the banking empires aren't ready to strike back quite yet, but it does represent a new hope. /blog/2012/march/pingit-the-empires-strike-back/ /blog/2012/march/pingit-the-empires-strike-back/ Fri, 02 Mar 2012 16:46:00 +0000 thefutureofbanking.org team /blog/2012/february/news-roundup/ Mobey Day 2012 conference - Leading banks, telcos, device manufacturers and app developers will gather under one roof next month to debate the future of mobile banking and payments services at the first annual MobeyDay conference in Barcelona. Online encryption flaw - The New York Times reports on the discovery of a weakness is an encryption system used for online shopping, banking, e-mail and other Internet services intended to remain private and secure. Criticism - PayPal's in store payments system is criticised by Visa. WW11 - Counterfeiting of sterling notes undermined confidence in British currency according to MI5 /blog/2012/february/news-roundup/ /blog/2012/february/news-roundup/ Fri, 17 Feb 2012 17:06:00 +0000 Tim Tyler /blog/2012/february/the-value-of-onboarding/ Stephen Fry summed it up brutally: "Only dullards crippled into cretinism by a fear of being thought pretentious could be so dumb as to believe that there is a distinction between design and use, between form and function, between style and substance." In other words, the traditional argument about function versus form is all but redundant. In the world of mobile devices and slick graphical interfaces, it means that if something is beautifully designed, then people are far more likely to use it. That is, it automatically becomes more functional and useful through the elegance of its design. As well as iPhones and the like, you can see this approach in action in many of the social and mobile software success stories of recent years. Geo-location app Foursquare is a great example. Most users initially sign up for its game layer, a competition to become the 'mayor' of your local coffee shop, cinema or department store, or earn badges based on activities based on the number of consecutive check-ins, photography and gym attendance. But the real value of the app to the end user is a fast-growing, easy to search archive of venue reviews. The longer you stick with the app, the more likely you are to appreciate its deeper functionality, and add value to the Foursquare business as a consequence. You can start to see financial institutions applying this 'onboarding' model to their own services. MoneyVista.com, launched by London Mutual, is the latest in a line of financial management sites aimed at end-users who are increasingly comfortable using interactive, animated graphics to measure and plan their finances. It takes about five minutes to load up MoneyVista with some basic information about your income, investments and other assets. The screen then launches an animated timeline that the end user can manipulate to view investments and income from the present day to retirement and ultimately a scroll icon- presumably a will-that tastefully indicates life expectancy.  The site is free to use for 30 days, but is funded by subscriptions once the first month has elapsed. Once you dig deeper you also discover more traditional online communities, advice on pensions and savings, budgeting spreadsheets-I'm guessing as well that there's an easy way to sign up to any Royal London products that match your savings plans, although the site says that it won't use information to target subscribers. It's too early to come by any figures for the number of paying subscribers, but at this stage it's fascinating to see financial institutions compete for consumer mindshare in the same way as FourSquare, Instagram, Path and others bait their sites with a unique user experience as well as the actual functionality of their service. One final point. Mobile apps take advantage of the fact that it's easy to gather feedback from end users and address any issues in frequent updates. Over the past few days as I've been testing MoneyVista, there've been a few tweaks that make it easier to negotiate the interface. It may not be a mobile or tablet app, but MoneyVista shares the flexible, engaging approach to software design in common with today's most successful consumer facing organisations. /blog/2012/february/the-value-of-onboarding/ /blog/2012/february/the-value-of-onboarding/ Mon, 13 Feb 2012 16:51:00 +0000 Amol Patil /blog/2012/january/leveraging-social-media-for-sustainable-competitive-strategy-in-banking/ Modern data processing systems have ensured that virtually all banks and financial institutions have a rich data trove within their firewalls that capture all transactions. However, just having rich data is no longer a source of sustainable competitive advantage. Data has become a virtual commodity and therefore needs to be honed and enriched further to derive that extra additional advantage needed to achieve stellar differentiating results. Therefore, to form and sustain a differentiator strategy, the existing data has to be supplemented to give the overall information a whole new dimension. This, then, would soon be translated into differentiating features in products and services that a bank or a firm can leverage to advance in its competitive eco-system. The exploding social media arena provides a new source of "fire hose"-mode information flow. Tapping into the collective intelligence and sentiments of the crowd via aggregated mining of their tweets and social posts provide clues to consumer thought. At a bank, the concept of the 360-degree view of the customers ascends to an entirely new level in the context of accessing their social media interactions. Privacy concerns around individual interactions are justified, but even the collective aggregated mood and sentiment observed over a slice of time in a given geographical footprint will provide fascinating insights into niche requirements within market segments that could be tapped to offer newer product features. Apparently smaller niche banks, rather then the investment-heavy megabanks, are seen to be in the forefront of leveraging social media as a source of innovation. "Crowd sourcing" as a means to understand what customers think of a bank's products, or what the customers would like in a product is a potential area that needs to be further tapped into. Usually such information is rare to come across and harvest in random social posts, however it can be elcited and extracted from the target customer base by facilitating a two-way interaction by using social media platforms. For example, a bank may set up a Tweeter feed or a Facebook page, attract current and target customers to subscribe, and then float virtual proposals and elicit responses. Responses can be analyzed over a sufficiently large population set to isolate possible enhancement to existing products, or spawn new products and services. Customer service feedback in another factor that can be more readily tapped using social media feeds. As an example, a customer forms a preliminary transient but likely the most accurate spur-of-the-moment opinion of the level of customer service being offered on the spot as the service is being delivered. The value of this transient feedback/opinion has a rapid half-life, it decays almost exponentially as the time of interaction between the customer and the service provider increases. Asking someone their opinion after a few hours of the actual interaction may give an indifferent, and hence inaccurate, response, or in most cases may not elicit a response at all. At the same time, asking about feedback on the spot directly by the service provider almost always results in a "masked", feel-good response which is likely not an accurate reflection of the receivers thoughts. If a social media interaction point is tapped into immediately or soon after the point of interaction, the "freshness" of the opinion as well as the confidentiality of the social media envelope will probably ensure a more accurate response from the customer than by other means. On the infrastructure end, the integration of social media feeds requires an entirely new class of infrastructure in the form of continuous data feeds and real-time analysis , such as those based on Hadoop/Cassandra that are fundamentally different from traditional relational database architectures. Therefore integrating and analyzing external continual stream data sources with traditional internal ones will need a sound extension architecture platform. The investments in these platforms will likely be justified to diversify away from traditional patterns, such as follow the private-cloud model wherein the computing power may be shared, though the aggregated data is fire-walled across to ensure security and retain confidentiality. In conclusion, financial firms - from the smallest local banks and thrifts to the large "megas" - are under a constant deluge of internal transactional data. The source of sustainable competitive advantage stems from the ability of a firm to tap into the information trapped in the transactions, as well as the ability to rapidly augment transactional data with supplementary data that originates from the firm's immediate eco-system - such as those provided by social media feeds from its current and target customers. An investment in building such capability is justified since merely capturing mere transactions alone is no longer the source of sustainable advantage. /blog/2012/january/leveraging-social-media-for-sustainable-competitive-strategy-in-banking/ /blog/2012/january/leveraging-social-media-for-sustainable-competitive-strategy-in-banking/ Wed, 01 Feb 2012 07:13:00 +0000 Olivier Berthier /blog/2012/january/bank-payment-obligation-and-iso-20022-a-technology-perspective/ Launched at the beginning of 2010 by SWIFT, the bank payment obligation (BPO) provides an alternative means of settlement in international trade. SWIFT, together with the International Chamber of Commerce (ICC) Banking Commission and a working group of banks and corporates, undertook an initiative to establish the BPO, most recently signing a co-operation agreement at the Sibos in September 2011, with the intention of encouraging industry-wide adoption. BPO sets out to upgrade several current methods for settling international trade. While letters of credit (L/Cs) have been around for years, will be for many more and are trusted and used globally, the time and paperwork required means that there is certainly space for modernisation of the system, particularly when it comes to open account transactions not currently benefiting from L/Cs' well-known risk mitigation advantages. As is often the case, change involving new technologies and standards can be daunting, but in the case of BPO, there are a number of reasons not to be afraid. Its standards-based technology foundations in particular are merely following the same path of evolution undertaken by other areas such as cash management since the mid-2000s, and the transition to BPO is unlikely to be problematic on this front. Beyond the clear benefits of the instrument itself from a financial and risk management perspective, complementary advantages are also expected in the increased granularity of the data the BPO exposes. Not only will it improve settlement of trade transactions, but its ability to read even more information and increase visibility should also mean banks are able to enhance their services too. BPO A BPO is an irrevocable undertaking given by a bank to another bank that payment will be made on a specified date after a successful electronic matching of data according to a defined set of rules. Therefore, a BPO offers: An assurance of payment Risk mitigation for all parties Possible use as collateral for finance Interest in BPO is fuelled by the fact that it seeks to bridge the gap between the current system of L/Cs, which, despite its value, is often blamed for being slow, inflexible, administration-intensive and costly in terms of both paper and processing, and open account transactions lacking the traditional L/C assurances provided by banks. Trading parties use complementary techniques in the context of open account transactions to manage the risks of their transactions in lieu of L/Cs. For example, the risk of payment default for exporters can be mitigated through buying credit insurance, arranging standby L/Cs or various methods of selling their invoice portfolio at a discount. However, these methods tend to cover only a portion of the trade transaction and lack integration with the underlying end-to-end flow of information along the physical supply chain. From a risk management perspective with open account, it is also incumbent on the parties to know their counterparties' risk profile. For this reason, open account is mostly used for longstanding and trusted relationships, while L/Cs are preferred for new customers without a proven track record and where banks play a key role thanks to their extensive knowledge in managing risks. BPO aims to mitigate open account risks and to accelerate the payment cycle. It enables banks to provide their trade finance customers with guarantees and other banking services on open account terms. Based on ISO 20022 messaging, it brings together the Trade Services Utility (TSU), SWIFT's matching utility as a reference implementation, with a set of business rules that replace the reliance of L/Cs on actual documents (either on paper forms or electronic as authorised for many years by the eUCP rules of the ICC but with little success) with dynamic data sets that can be automatically streamed. The Same, But Different The use of electronic data exchange to support trade finance is not a fundamental change and the technology is ready. In many ways, it's not that different to L/Cs, whose process is already largely electronic. Corporate e-banking systems offered by a large proportion of banks active in trade finance support the ability to issue, notify and monitor L/Cs and other instruments throughout their lifecycle including subsidiary events and copies of documents. In addition to an interactive web-based user interface, some also include the ability to integrate directly with the corporates' enterprise resource planning (ERP) or treasury systems. Statistics vary between different banks and regions, but a consensus among the financial institutions using customer portals today is that more than 80% of their total volumes of L/Cs will generally be exchanged and managed electronically with their customers. The same level of dematerialisation is largely in place at most banks' back office operations where integrated trade finance systems process transactions and manage the necessary electronic data interchange with the customer channels, other banks via SWIFT and payment gateways. Therefore, we already have in principle both the channels and the back office systems to support the kind of facilities necessary to deploy BPO in the value chain. Much of the infrastructure needed to enable corporate customers to upload and action their purchase order or invoice data, and banks to automate the overall accounting, risk management and billing of transactions, is already in place. One of the things that is crippling the industry and hindering the adoption of mass working capital financing techniques such as supply chain finance (SCF) is the lack of standardisation. But a key advantage of BPO is that it is standards-based - following the ISO 20022 standard - and therefore provides an unambiguous reference to its definition and mechanism. It is again here a strong analogy with the L/C and its uniform acceptance across the globe. This is in contrast with SCF and its variations, which do not rely on standards-based definition and practices today - in spite of initiatives such as the BAFT-IFSA glossary. BPO is fundamentally aiming to tackle this - not only the standardisation from an ISO 20022 messaging perspective, but also in terms of business rules which the ICC is currently working on. Another important aspect of the ICC endorsement to help widen adoption is the decoupling of BPO from being exclusively run on the SWIFT TSU infrastructure, despite the SWIFT service being the obvious initial reference implementation. Provided that all aspects of the upcoming ICC rules are fulfilled, it shall be possible for a party independent from SWIFT, such as a bank, a corporate, a solution provider or consortiums of the above, to implement platforms supporting the end-to-end deployment of BPO. Again much like L/Cs, which are independent of the network over which they are processed, even if most of them eventually take the form of MT700 messages transmitted over the SWIFT network. Advantages Key points about standardisation are the guarantee of interoperability between participants (parties and systems), a larger pool of skilled resources and the de-risking of investment in proprietary technology. But the advantages do not stop there. Even if exchanged electronically, L/C transactions transmitted over proprietary channels and SWIFT tend to contain large amounts of unstructured data such as free text. BPO, on the other hand, streamlines this data, making it more structured and granular with ISO 20022. This in turn facilitates usage, distribution and storage of the transaction data. This development will provide corporates a finer control over their transactions and a deeper integration with the existing process of their physical supply chain. It will also enable banks to instantly access and identify specific trade activity, not only minimising risk, but also tailoring their services to match the customer's needs. For example, by capturing data from a purchase order, a bank can be alerted to a customer's upcoming need for foreign currency in order to settle the underlying invoice at due date. Another example is the access to more detailed descriptions of goods and services allowing a tighter matching in order-to-pay (O2P) processes down to line item levels. Fig.1 The Benefits of Richer Structured ISO 20022 Data Sets This more granular access to the data can therefore be seen as an interesting means by which banks can provide value-add features beyond commoditised payment services and ultimately remain relevant to their corporate clients. It can particularly be the case to those large international clients who have moved an increasing proportion of their trade business onto open account terms, rendering the bank's involvement in the transaction unnecessary. The BPO can play a role in helping avoid this disintermediation of banks and create a new source of fee and commission-driven income for financial institutions. Barriers to Adoption The acceptance and expansion of BPO presents something of a chicken and egg situation - people will only start adopting it once enough people are doing it, but how do we get to that tipping point of critical mass? Creating a set of rules relies upon demonstrable evidence gathered from real, live transactions and this will take time to amass. In an effort to build this evidence, BPO is currently being tested by some of the corporates in the working group, which will help drive momentum in adoption. Basel III is another potential obstacle to adoption. Confusion about how to calculate risk and how much capital to set aside for BPO transactions could hinder its acceptance. Traditionally, trade finance practitioners as a group tend to resist change. However, we are seeing clear interest in those ranks with an influx of commercial and logistics backgrounds and appetite to realise this evolution. From the technology perspective, the analogy with the L/C processing and the similarities with the development of cash management are certainly contributing to lowering those barriers. Existing IT expertise within banks coupled with the ability to leverage infrastructure already in place for cash management and payments in support of ISO 20022 should facilitate the evolution. Fig.2 ISO 20022 for Cash Management, Trade and SCF Conclusion Despite industry inertia to change, BPO is an opportunity for a positive evolution in the face of an increasingly online industry. L/Cs are still used faithfully by many corporates and banks alike and open account transactions are already the norm, but there is a need to streamline the flow of information so that it benefits both sides of the settlement. The BPO can help achieve this. We are seeing beneficial change in many areas of trade finance, much like with cash management before. Reaching critical mass for any service is always a complex feat, but, in parallel with the ICC work on the subject, we believe the technology transition to BPO will be a relatively simple one where the benefits will quickly proven. /blog/2012/january/bank-payment-obligation-and-iso-20022-a-technology-perspective/ /blog/2012/january/bank-payment-obligation-and-iso-20022-a-technology-perspective/ Mon, 30 Jan 2012 02:59:00 +0000 Tim Tyler /blog/2012/january/in-the-news-the-commonwealth-bank-of-australia-enjoys-a-successful-content-campaign-on-facebook-and-icici-launches-a-facebook-banking-app/   Just good mates - The Commonwealth Bank of Australia celebrates Facebook milestones , finishing a year of successful social media initiatives with more than 100,000 fans. You 'like'?  'ICICI banking app on Facebook allows users to access account detail, view mini statements and order cheque books and credit cards. And proving that financial innovation isn't just for banks, an Irishman builds house out of shredded euro notes. /blog/2012/january/in-the-news-the-commonwealth-bank-of-australia-enjoys-a-successful-content-campaign-on-facebook-and-icici-launches-a-facebook-banking-app/ /blog/2012/january/in-the-news-the-commonwealth-bank-of-australia-enjoys-a-successful-content-campaign-on-facebook-and-icici-launches-a-facebook-banking-app/ Fri, 27 Jan 2012 16:04:00 +0000 Stan Nouy /blog/2012/january/year-of-the-tablet/ 2012 may be the Year of the Dragon in the Chinese Calendar, but where technology is concerned it's the Year of the Tablet. According to Jolyon Barker, global lead for Deloitte Technology, Media and Telecommunications department, the tablet's set to take the mantle for the most rapid multiple market penetration in history. So far, tablets have generated up to £1.3 billion in revenue for technology businesses. According to its technology prediction for 2012, Deloitte believes that more people will also own more than one tablet device. Read Deloitte's report here /blog/2012/january/year-of-the-tablet/ /blog/2012/january/year-of-the-tablet/ Wed, 25 Jan 2012 17:14:00 +0000 Andrew Hebron /blog/2012/january/does-better-banking-start-with-virgin-money/ So Virgin Money acquired Northern Rock and now it's a fully fledged high street bank. The company's off to a flying start, going to market through a number of channels with a clear and popular message. That is, it aims to be a fair, straightforward, no nonsense bank that "Makes a fair profit. Not an excessive one." Lofty aims indeed when most banks have been trying for years to succeed on such counts, but customer experience scores say otherwise. No matter. What's important for Virgin Money is that it's backed by the Virgin experience. Every bit of advertising and marketing collateral stamped with the Virgin Money logo reminds you of Virgin's historical service proposition, which is to offer good value for money products complemented by fair service. For all the words, can Virgin succeed in being different? Virgin doesn't just use words that convey simplicity and fairness; it tries to demonstrate these values in 'good', if not 'great' customer experiences across its portfolio. If in doubt, think of sites such as Virgin Media and Virgin Trains for example. Navigating the sites and finding what you need is straightforward and simple, with costs for media or transport transparently displayed compared to other providers of the same services. The company also helps customers to experience its brand values in person-to-person interactions in its services delivery. For example, after you've paid for your Virgin air ticket, you'll board a Virgin plane staffed by stewards with down-to-earth, no-nonsense personalities in cheerful red uniforms. Bright and bold? Well, the statement uniforms are in line with the Virgin ethos of having nothing to hide. Virgin understands that its customers' perceptions of the company affect their loyalty to the brand, and increase revenue, so it pays close attention to how customers experience Virgin products and services. Fair enough. But translating these values to the banking sector is another challenge altogether. And with MetroBank already several months down the line in its attempt to 'reinvent retail banking', it remains to be seen whether Virgin's customer experience will become a market differentiator in financial services. That said, t he 'simple but fair' experience model appears to fill a niche and with three million Virgin Money customers added to Northern Rock's current one million savers and borrowers and 75 High Street branches, it's an extremely compelling proposition. /blog/2012/january/does-better-banking-start-with-virgin-money/ /blog/2012/january/does-better-banking-start-with-virgin-money/ Mon, 23 Jan 2012 17:20:00 +0000 Andrew Hebron /blog/2012/january/core-banking-transformation-the-road-to-agility,-and-the-master-data-plan/ George Cowell's Core Banking Blog sums up agility in the context of core banking. In another blog he neatly lays out reasons to transfer master data first when implementing new core banking technologies. His master data list includes: Customer information Account detail and transactional information General and sub-ledger detail Organization Structure /blog/2012/january/core-banking-transformation-the-road-to-agility,-and-the-master-data-plan/ /blog/2012/january/core-banking-transformation-the-road-to-agility,-and-the-master-data-plan/ Fri, 20 Jan 2012 17:29:00 +0000 Tim Tyler /blog/2012/january/now-is-the-hour/   If you needed more proof that now is the time to go to market with a mobile payments solution, or ready your systems for mCommerce integration, take a look at  Acquity's cute infograph . The statistics can't be ignored, especially when you've got the likes of PayPal doubling its prediction of mobile payments volumes in 2012. The new figure comes after PayPal exceeded expectations by reaching US $4 billion in mobile payments in 2011, up from a projected US $1.5 billion. It's a massive hike in a short time - in 2010 PayPal saw US $750 million in mobile payments. Then there's the Green Paper planned by the European Commission, which aims to help new and existing providers overcome barriers to integration. The paper reflects the Commission's desire to promote the use of electronic payment technologies. Not surprising when around 59 billion worth of retail payments were made in the eurozone in 2009 in spite of the sparse integration between member states and platforms. Although there's overwhelming evidence that even non-tech savvy users are adopting mobile payments technology at lightning speed, only 29 per cent of US companies plan to offer mCommerce in 2012, up from 14 cent today.  As we've said on FOB before, it's hard to pinpoint which of the mobile payment devices will be number one and knowing which option to follow is probably behind the apathy. After all, NFCs, Smart Phone Credit Card readers, SMS-based payments and transfers, and location-based app software all provide users and retailers with convenience in a mode that suits them.  What's clear, however, is that mobile payments technology is appealing to users. By the end of 2013, many of the lagging 57 per cent of US companies that haven't planned a mCommerce option are likely to be throwing themselves on the bandwagon with great gusto. When it comes to integration and planning, now is definitely the hour. For businesses that have been slow to respond to mCommerce opportunities, the Green Paper may provide headway into concerns around payment security and data protection, transparent and efficient pricing of payment services, technical standardization, and inter-operability between service providers. /blog/2012/january/now-is-the-hour/ /blog/2012/january/now-is-the-hour/ Fri, 13 Jan 2012 14:30:00 +0000 Stan Nouy /blog/2012/january/2012-the-technology-trends-that-banks-should-be-focussing-on/ Chris Skinner's take on what's hot in banking technology provides real insight into the way that smart banks should be going about their social business and expanding their service offerings in 2012. Skinner's list: Contactless mobile will reach a tipping point in retail payments   Social media will become a core communications tool   PFM, combined with social media, is going to enjoy a boom year   Tablet PCs with financial apps will be pervasive and ubiquitous   Risk management will be a key area of software development   FPGAs and GUIs will be deployed across investment markets   "Data as an asset" will be the most common phrase used   Read more from Chris Skinner here . /blog/2012/january/2012-the-technology-trends-that-banks-should-be-focussing-on/ /blog/2012/january/2012-the-technology-trends-that-banks-should-be-focussing-on/ Thu, 12 Jan 2012 14:31:00 +0000 Stan Nouy /blog/2012/january/opportunity-knocks/ Now seems like the perfect time to respond to demand and increase your tech kudos with a secure, well-designed application for tablet banking. Consider this: Google is apparently marketing a tablet 'of the highest quality' in the next six months. A response, perhaps, to a deluge of Android apps that range from what pocket-lint.com calls 'bargain basement' to high end apps that offer occasionally clunky, inconsistent user experiences. Such is the view of tablet app evolution thus far. In the world of banking apps, the consensus seems to be that the myriad tablet sizes has resulted in applications that don't use space efficiently and deliver inelegant user experiences. The disappointment isn't limited Android. Just 30 per cent of the largest banks in the United States offer online banking applications specifically for iPad, which means a lot of apps are not working as well as their users want them to. Writing for Reuters, Mitch Lipka points out that banks could exploit demand from tech-savvy consumers and create more apps specially designed for a tablet touch screen and that use the screen space efficiently. See the following stats from Oracle Communications' survey of 3000 mobile users: Within the next 12 months, 41 per cent plan to buy a tablet computer Instead of using a Smartphone, 34 per cent prefer to use a tablet for banking and finance For banking and finance apps, 55 percent use both tablets and smart phones Such preferences signal that banks should be developing lots of different services that adapt to both the device and the user context. If they don't, there's a real risk that non-traditional financial service providers, or as yet un-launched start-ups, will encroach on banks' existing market share. To maintain their market leadership, banks have to become specialists in innovative customer experiences, in addition to developing the products and services that are within their traditional domain of expertise. To do this they will need to seek out partnerships with vendors that not only understand banking, but which have also mastered these aspects of software and design. /blog/2012/january/opportunity-knocks/ /blog/2012/january/opportunity-knocks/ Fri, 06 Jan 2012 13:02:00 +0000 Tim Tyler /blog/2011/december/2016-the-tipping-point-for-mobile-payments/ PayPal says that 2016 is the big year for mobile payments. If that's the case then banks have four years to get their systems ready for managing mobile seamlessly. Or do they? There are signs that the tipping point may be a lot closer. Many large retailers are already trialling technology, such as Barclaycard's Quick Tap app, for low value transactions. And the convenience of mobile payments is going beyond the high street - attracting the attention of transport companies for example. From next year, Londoners will be able to use their Visa cards in the same way they use their Oyster cards, swiping them against monitors on buses and at underground stations in order to pay for their journeys.  Low value transactions, the coffee, the sandwich, the last minute present, account for around 65 per cent of all transactions. Contactless payments mean a lot less cash to carry around and fewer trips to the ATM - the convenience for consumers is clear. But there's another advantage that could bring about the tipping point much sooner. For cash-strapped governments, it's an opportunity to increase income through legitimate tax that it's missing out on for low value cash exchanges - the builder, the plumber, the cleaner, and so on. With this in mind, many governments are lowering the ceiling for cash transactions - Italy's just lowered it to €300, while France has dropped it to €1,500. There's definitely a reason why it's difficult to get large wads of cash out in the UK - there's an assumption that it's going towards something illicit. It's only a matter of time before regulations around cash volumes increases. Another factor that heralds a close tipping point is the likes of Dwolla , who aim not to be the next PayPal, but the next Visa . The ambitious start up - founded in 2008 by a 28 year old in Iowa - predicts it will move around US $350 million in payments in 2012. Dwolla's payment system allows direct payments made from a bank account, making it cheaper for retailers to use than credit or debit cards. Ease of use and popularity for consumers and retailers alike is likely to make Dwolla even more popular and widely used. Chances are that the tipping point for mobile payments will be 2012. Whatever the case, they're on the rise. At the very least banks need to ensure their systems can cope with the huge increase in transactions. Better still; ensure they are primed to deliver their own services for the first 'cashless generation'. /blog/2011/december/2016-the-tipping-point-for-mobile-payments/ /blog/2011/december/2016-the-tipping-point-for-mobile-payments/ Tue, 06 Dec 2011 13:08:00 +0000 Tim Tyler /blog/2011/november/sweating-the-small-stuff-the-launch-of-googleplus-pages-highlights-the-importance-of-getting-the-basics-right-first-time/ Google+ Pages launched last week, signalling that it was ready for business. Although Google rarely hits a bum note, industry commentators are already giving it a hard time. Why? The service ─ which is essentially Google's version of Facebook Pages ─ is in its development stage, but Google's made a number of errors more suited to an inexperienced start up than one of the most powerful internet companies on the planet. Example one, the Google+ Pages of several high-profile businesses were brand-jacked by fraudsters within days. It happens all the time, but the consensus is that Google should've had the nous to figure out how to avoid such a thing before the launch date. With Facebook's baby steps well documented, there's no need for the genius creators at Google to repeat mistakes. Example two, it's inconvenient to administer. Currently, only one person can own a Google+ Page and they need a Gmail address before registering. Make the mistake of opening a Google+ account with your personal Gmail address and assign your brand name to that address and you're stuck with it. If you want a colleague to update the Page then they'll need your personal email log-in details. It's probable that the hitch will be remedied quickly and in the meantime you can work around the issue by remembering to create a general user account before you register. The point is that Google should have thought about it first. It's basic knowledge that one person isn't sitting at the computer updating a brand or business profile all day. It takes at least a couple of people in a small company ─ and dozens in a big company ─ to respond to account queries and keep content fresh. Example three. Businesses and brands have been itching to use Google+ since it was launched, in fact, thousands registered an account only to be told to wait until Pages was ready. Some brands and business accounts were even deleted much to their chagrin. Again, rather than getting heavy handed and back tracking, it would've been better to sort it all out beforehand. With all the process and design weaknesses, it may mean that brands aren't so inclined to leap into Google+ Pages, but will wait until the wrinkles are ironed out. Yet the longer the wait, the greater the risk of brand jacking and other anti-social behaviour. Google can ride out pretty much any storm and in spite of its hiccups the service passed the 10 million user mark with days of launching, so it's unlikely to suffer badly in the long run. But, if there's a lesson to be learned from the jumpstarting launch, it's that the lesser greats - including banks - need to get the basics right first time. /blog/2011/november/sweating-the-small-stuff-the-launch-of-googleplus-pages-highlights-the-importance-of-getting-the-basics-right-first-time/ /blog/2011/november/sweating-the-small-stuff-the-launch-of-googleplus-pages-highlights-the-importance-of-getting-the-basics-right-first-time/ Mon, 21 Nov 2011 18:47:00 +0000 Tim Tyler /blog/2011/november/twitter,-facebook,-and-the-winds-of-change/ When it comes to shopping around, banks probably fare better than other service providers. After all, transferring your account, savings, and mortgage isn't quite as simple as swapping over your internet or gas provider. When the dust settles after last weekend's Bank Transfer event, it'll be interesting to see just how the Facebook movement affected the solid Bank of America's (BOA) actual customer numbers and financial status. Early reports say that credit unions gained around $100 million in new deposits as a result of the movement. Missouri credit unions, for example, gained 7,100 new members and $49 million since the Facebook page was set up in late September, while the Bank of Alameda says it gained 27 new customers directly as a result of Bank Transfer Day on November 5. The numbers are still pretty small, and banks have weathered much larger transfer movements in the past - during South Africa's apartheid era Barclays lost a ton of customers.  Ultimately, the Bank Transfer movement may end up having very little impact on customers and income at all. Having said that, would you really want to be responsible for bringing close to 100,000 people together with just the one thing in common - i.e. they think you suck? Even if BOA isn't affected financially, the tarnish of a miserly reputation won't be easy to shake. Like it or loathe it, the movement highlights the power of social tools. Whereas once it took an army of organisers to mobilise public sentiment, thanks to a simple tweet or Facebook update a message can, literally, reach millions in seconds. So what does this mean for banks? If the Bank Transfer movement accounts for even just a half a per cent shift to credit unions in Missouri, the amount of effort to set up a Facebook page is all it took to make that shift. If  consumers are taking to Twitter and Facebook in droves to get results in customer service then it pays to understand that it's not just about losing business but about knowing how to respond appropriately. Although the BOA has three well-followed Twitter accounts indicating a solid social media presence, and it reversed its policy in line with what customers wanted, its response to the situation just appeared to fan the flames. Ideally a bank wants a proactive social media presence where customers can see that you're concerned and engaged on a day-to-day basis, not just when things go wrong. At a basic level, you'd also want them to feel they could come to your Facebook page and post a grievance because they know that they'll get a quick reply. That means you need to post every day, and demonstrate you reply in person to posts. To summarise, banks need to own the online conversation, participate and lead. And here's a novel idea - be creative. Public sentiment isn't stagnant, it swings both ways. If technology is fundamentally changing the structure of the provider and consumer relationship why not take advantage of it? With a little creative thinking, a bank could create a positive groundswell in favour of its products and services. Do something unique and inspiring, something that connects with consumers, and inspires loyalty and trust. That should get your customers tweeting your praise. /blog/2011/november/twitter,-facebook,-and-the-winds-of-change/ /blog/2011/november/twitter,-facebook,-and-the-winds-of-change/ Wed, 16 Nov 2011 17:26:00 +0000 Srinivas Srikantha /blog/2011/november/national-bank-of-kenya-upgrades-core-banking-platform-in-pursuit-of-growth/ The Eurozone might be grabbing the headlines for all the wrong reasons, but other regions are experiencing healthy economic growth and local banks are pressing home their advantage. A good example, in East Africa, is the National Bank of Kenya, which is upgrading its core-banking platform to grow revenues and improve its cost-income ratio. Its goal is to reduce costs through operational efficiency, and increase income by taking advantage of trade finance growth in Africa. Companies in developing countries such as Africa often face challenges in getting the finance they need to buy trade goods or to sell their goods to other countries. But given that global trade grew 14.5 per cent in 2010 - the fastest growth on record - it makes sense for African businesses to seize the opportunity and gain their share of the global market. With this in mind, The NBK is adopting a new core banking platform and updating its infrastructure to effectively support Kenyan businesses - for example, accommodating changing regulatory requirements - which will attract new trade finance customers. At the same time, it will drive down operating costs through use of efficient technology. On average, most African banks have increased their operating costs by more than 19 per cent in 2010, but the cost-to-income ratio has fallen by more than 10 per cent, so it's the right time for the National Bank of Kenya to prepare for a competitive future. /blog/2011/november/national-bank-of-kenya-upgrades-core-banking-platform-in-pursuit-of-growth/ /blog/2011/november/national-bank-of-kenya-upgrades-core-banking-platform-in-pursuit-of-growth/ Wed, 16 Nov 2011 12:15:00 +0000 Tim Tyler /blog/2011/november/tim-tyler-video-interview/ There's more to social media for banking than Twitter pages and Facebook pages. Tim Tyler, Misys Solutions Manager for Mobile and Mobility, describes how banks can develop genuinely innovative and useful solutions by fusing the best of social media with the latest mobile devices. /blog/2011/november/tim-tyler-video-interview/ /blog/2011/november/tim-tyler-video-interview/ Mon, 07 Nov 2011 17:23:00 +0000 Tim Tyler /blog/2011/november/appier-times-ahead-for-mobile-banking/ It looks like the banking industry has turned a corner when it comes to app adoption rates. A recent report by comScore found that mobile banking app usage has increased in the US by 45 per cent since Q4 2010 . What's more 14 per cent of US mobile users are now accessing banking services on their handheld devices. Why, then, are we seeing such increased penetration rates? Sarah Lenart, comScore VP for Marketing Solutions, thinks it's down to some savvy investment by financial services institutions. "New apps and mobile-enhanced sites have made it easier for customers to seek out financial information using mobile devices. With tablets and other web-enabled connected devices gaining popularity in addition to smartphones, financial service institutions are poised for additional growth in mobile access." And it seems the industry is now putting banking apps at the very heart of its business strategy. Take newly-launched BankSimple, with its new 'no charge' friendly banking model . A case in point here because its app was deemed so crucial to the BankSimple business model that it was designed before the desktop browser version . There's more to do, of course, and unless usability is put at the very core of mobile apps then there will be casualties - but it does indicate that a turning point has been reached when it comes to mobile banking. /blog/2011/november/appier-times-ahead-for-mobile-banking/ /blog/2011/november/appier-times-ahead-for-mobile-banking/ Fri, 04 Nov 2011 17:33:00 +0000 Tim Tyler /blog/2011/november/facebook-id/ Seems like Facebook is on its way to owning your offline presence as well as your online presence. Already Facebook Connect allows users to take their online identity all over the web, removing the need to remember multiple sign on names and passwords wherever Connect is available. An extension of this would be to use a Facebook ID smartcard to log on to your bank account, handover to the teller, or make a payment with. It's a concept you can bet can bet that Zuckerberg and co are already thinking about . When it comes to all encompassing ID smartcards, banks have an excellent advantage over Facebook. Concepts around privacy and security are bandied about all over the web and in relation to all things online or network related. But nowhere are privacy and security given more attention than in banking where user security is absolutely paramount. In fact the concept of security is firmly embedded in everybody's understanding of the word 'bank'. Think of it as the selling point that transformed the mattress stash into an ever increasing pile in the safety deposit box - i.e. nobody ever deposited a monthly sum with the understanding that they'll need to navigate a few privacy loopholes to ensure their money isn't shared with anyone else. With the public trust element in the bag, and armies of security technophiles who're committed to creating impenetrable, secure systems, ID smartcards represent an excellent opportunity for banks. The only thing left is to up their Social ante. /blog/2011/november/facebook-id/ /blog/2011/november/facebook-id/ Wed, 02 Nov 2011 19:18:00 +0000 Olivier Berthier /blog/2011/october/all-praise-the-icc-trade-finance-register/ Just came back from the International Chamber of Commerce (ICC) Banking Commission meetings in Beijing. It was a great conference with excellent content and debates, from the rules making activities to the launch of new instruments like the Bank Payment Obligation to address the open account and supply chain finance space, from regulation with Basel III to the activities of the market intelligence working group or the role of technlogy in supporting trade finance. Many thanks again to the ICC for the invitation to speak. One of the highlights was the discussion around the analysis of the ICC Trade Finance Register released in the new ICC report Global Risks - Trade and Finance and showing yet again the short-term nature of trade transactions and their relatively low risk profile. The document is a gem. Just one example with the Import Letters of Credit reporting 0.077% default and 0.007% loss... The Basel Committee on Banking Supervision's annoucement this week that it is waiving the one-year maturity floor for certain trade finance instruments under the advanced internal ratings-based approach (AIRB) for credit risk in Basel III is a great first step. But surely the committee can do more in differentiating trade finance from higher-risk activities.   /blog/2011/october/all-praise-the-icc-trade-finance-register/ /blog/2011/october/all-praise-the-icc-trade-finance-register/ Fri, 28 Oct 2011 02:57:00 +0000 Barry Kislingbury /blog/2011/october/could-low-fi-with-a-touch-of-hi-fi-be-the-future-of-banking-square’s-walmart-foray-highlights-an-important-development-in-the-payments-monetization-markets/ Square - created by Twitter co-founder Jack Dorsey - scored a recent coup with its move into Walmart. The devices target small businesses that may not be able to afford credit card transaction machinery, and stocking them at Walmart makes them available at more than 9,000 outlets in the United States. It also increases Square's share of a mobile payments market that Juniper Research predicts will hit US $670 billion in 2015. Some observers are surprised by Square's success. Square's been around for a while, and its plug-in model seems somewhat clunky when compared to a near field communication device (NFC). An NFC eliminates retail transactions to a simple scan, with the purchaser completing a payment in much the same way as they'd top up an electronic travel pass card. With Square, the purchaser waits while the retailer plugs a Square reader into a person's Smartphone, and the transaction only takes place after the plug in. The extra human step is the mobile banking equivalent to a grocer foraging for change in his white floury apron. But this could be the point. At a time when the human element can be eliminated from almost all retail transactions, Square achieves something else. By being a little homely, a little clunky, maybe it's adding the human touch to an otherwise futuristic transaction. If mobile payment technology represents a huge area of monetisation for banks, then the key to success is predicting what doesn't exist yet and understanding what people don't realise they want. Square founders say they want the device to become ubiquitous, and given Twitter's success they might know more than a thing or two about tapping into the zeitgeist of user experiences. After all, alongside iPhone, Google, Facebook and Twitter, exists slow food, guerrilla gardening, and farmers markets. The economic downturn has lead to a revival of car boot stalls and vintage school fairs, an emergence of pop-up restaurants, of donation-only supper clubs held in private residences between guests who are complete strangers. In these contact-centric environments maybe going too high-tech, might be one step too far? Square, a hybrid technology somewhere between the apron and the ether might just be the payments solution for our turbulent times.  /blog/2011/october/could-low-fi-with-a-touch-of-hi-fi-be-the-future-of-banking-square’s-walmart-foray-highlights-an-important-development-in-the-payments-monetization-markets/ /blog/2011/october/could-low-fi-with-a-touch-of-hi-fi-be-the-future-of-banking-square’s-walmart-foray-highlights-an-important-development-in-the-payments-monetization-markets/ Thu, 27 Oct 2011 20:07:00 +0000 Tim Tyler /blog/2011/october/attracting-customers-and-selling-services-–-what’s-your-game-plan/ This is an article about the gamification of banking services. Before you rush out and start stockpiling canned food and bottled water in preparation for the end of civilisation as we know it, consider the following. Gamification, which applies the principles of video game design and interaction to customer experiences and problem solving, is starting to gain ground in online banking. A large number of start-ups have launched in the past two years, catering directly for the changing banking needs of new demographics created by the economic crisis. The majority are unconstrained by traditional modus operandi or legacy systems. They're taking advantage of technology, web, mobile and social platforms to reinvent the banking wheel with entertaining and useful niche services. Want to encourage people to take out a mortgage? Wrap up a mortgage calculator in a visual, interactive journey that potential customers can explore. They get to imagine the reality of making mortgage payments before making the commitment and, at the same time, are stimulated by competitions and opportunities that can be embedded in the journey. There's more to this than simply making finances fun. The past three years have upended the financial expectations of millions of people, especially students and first-time earners. And many start-ups are responding to their needs.  A good example is PayDivvy.com. Set up to provide a bill management system for personal and group bills via web or mobile, it allows users to pay, send and split bills from one place in real-time - so users only ever pay their 'fair share'. With more people choosing to live in shared houses with shared responsibilities, the service is a neat, timely response to a new social need. Another site, Payoff.com , provides a way to manage debt and motivate savers by consolidating debts and payments on one platform. Users can see their debts going down, and savings going up. At the same time, they get to share their dreams and successes with a community of people in the same situation. Mainstream providers, such as Barclaycard and Lloyds TSB, are taking a leaf out of the start ups book. They're stretching existing online banking services by incorporating infographics into useful online money management tools. Take a look at the Lloyds Money Manager . The free service provides users with comprehensive data on where their money goes. With categories such as entertainment, food and travel, Money Manager proves that there are smart ways to engage consumers with new experiences.   The fact is there's plenty of similarity between game playing and finances the more you think about it. From problem solving, to collaborative role play (think Groupon), to earning rewards, there are plenty of ways to make banking services more sticky and customers more loyal. The challenge, for banks, is to find the relevant skills that enable you to deliver this experience in an original, but authentic way. If you're a bank that could have massive implications for your hiring policy. You might not be partnering with Electronic Arts or Activision for the next generation of online banking services, but you're almost certainly going to be using some of the user experience skills that these companies are pioneering.  /blog/2011/october/attracting-customers-and-selling-services-–-what’s-your-game-plan/ /blog/2011/october/attracting-customers-and-selling-services-–-what’s-your-game-plan/ Wed, 26 Oct 2011 11:53:00 +0000 Olivier Berthier /blog/2011/october/meeting-corporate-customer-needs-trends-in-transaction-banking-report-(part-2)/ Last week we reported on how transaction bankers are placing focus on reducing IT complexity and costs according to a new report commissioned by Misys and published by Finextra research. The survey also points the way forward for these organisations when it comes to better meeting the needs of their corporate customers. This feedback was especially strong when it comes to the financial supply chain perspective of their business. The interesting and relatively surprising result here is that "traditional trade finance" takes a greater share of the trade and supply chain business at 37 per cent of respondents, given the generally accepted massive move to open account trade and at times how unpopular letters of credit (LCs) are with part of the corporate community. Not only are letters of credit unpopular, their volumes have remained flat in recent years. It is now estimated that over 80 per cent of global trade is conducted on an open account basis, according to Swift. It might simply confirm that, with an enduring period of turmoil, the more traditional trade finance tools still have an important role to play and should not be discarded at any bank serious about its transaction banking offering. When it comes to financial supply chain offerings themselves, the results raise some questions. In answer to the question: "Do you see demand for financial supply chain services from your corporate customers?", 36 per cent answered "Yes - and we have a standard solution to offer them". It is generally understood that most banks do not offer a standard set of supply chain services - given that each corporate client's supply chain may differ. However the answers to the next question: "What functionality do you plan to add to online corporate banking within the next twelve months?" clarify this somewhat. Here, fragmented results show that many banks are looking to add a range of services to their online corporate banking offerings. With the ever-increasing demand for instant information, the slow roll-out of faster payment infrastructures in numerous countries and the growth of mobility, it is easy to see why "Real-time payment tracking" took the top spot in the survey - taking in 25per cent of those surveyed. Being able to check your payments, in real-time, anywhere, is a real demand banks are seeing from corporates. It is also interesting to note that "Trade services functionality" narrowly beat "Cash flow forecasting tools" with 14per cent and 13per cent, respectively. Who would have imagined a few years ago that trade finance would one day gain a higher profile than cash management as a development priority for banks in the development of their corporate offering? This reflects well a trend we are seeing today of greater importance of trade finance in banks' development of more comprehensive and holistic working capital management solutions for their corporate customers. For more information, download the full document, Trends in transaction banking report 2011     /blog/2011/october/meeting-corporate-customer-needs-trends-in-transaction-banking-report-(part-2)/ /blog/2011/october/meeting-corporate-customer-needs-trends-in-transaction-banking-report-(part-2)/ Fri, 21 Oct 2011 14:23:00 +0000 Tim Tyler /blog/2011/october/social-media-is-not-an-it-competency/ How do you best sum up the technology trends in the enterprise? This article from ZDnet  gives a good overview of the major technologies influencing the enterprise world including banking. If there's one thing that the article shows, it's that most of the major shifts in the technology world are being driven by the consumer, not the enterprise. This virtuous circle, where new devices drive innovative consumer experiences and vice-versa, continues unabated. And it leaves many of us in the enterprise world, including banking, breathless at the sheer pace of change. Let's have a look at a couple of these areas. When it comes to social media, I still hear a lot of people in banking express concern that social isn't mature enough for banks. The trouble is the conversation continues with you whether or not you participate. From twitter hashtags to Facebook pages and everything in between customers are discussing your products and services. Fear plays its part too. But don't imagine that social is just about damage limitation. It isn't. The horror stories where customers set up a "I hate bank" Facebook page or Twitter hashtag grab the headlines, but they can be managed, if only because they are easy to find and the sentiment, clearly understood, can be dealt with. It's much more important to discover deeper currents of feeling. Today, customers are increasingly likely to praise a brand or a competitor's offering using social media - tracking this feedback is highly desirable for any enterprise that wants to better understand its customers and use this knowledge to shape product and service strategy. This consumerisation of enterprise IT, driven by mobile and social has an equally profound impact on your relationship with employees. Specifically the twenty-something digital natives for whom a green screen has as much to do with the world of work as a wax cylinder has with music. This problem afflicts the majority of banks, who risk losing IT and other skills to more technologically advanced sectors. So where's the good news? A growing number of banks are starting to find ways to satisfy the appetite of customers attuned to the speed, convenience and social adaptability of consumer technology. Bank of America has more than 18,000 followers on its 'help' Twitter account. Small fry compared with Lady Gaga, but significant all the less. Then there are banks targeting a specific demographic. Santander's Facebook page focuses on students, an age group most likely to use the social network, to promote offers and engage this community in the UK. The beauty of this approach is that you  don't need to invest in a new technology platform to focus on your audience - Facebook and Twitter have already done the work for you. But it does mean that you need to do your research and planning up front to make sure you're ready to engage on day one. How to do that will be the subject of my next post.         /blog/2011/october/social-media-is-not-an-it-competency/ /blog/2011/october/social-media-is-not-an-it-competency/ Tue, 18 Oct 2011 17:44:00 +0000 Srinivas Srikantha /conversation/2011/october/risk-management-3cs-to-define-future-trends/ Do you agree that the 3 C's - Capital, risk Culture and Compensation, are going to define the future trends of Risk Management in banks? /conversation/2011/october/risk-management-3cs-to-define-future-trends/ /conversation/2011/october/risk-management-3cs-to-define-future-trends/ Thu, 13 Oct 2011 12:40:00 +0000 Barry Kislingbury /blog/2011/october/splitting-the-bill-moves-into-the-21st-century-with-simple-mobile-payments/ We've all been there. Whether it's a taxi journey, splitting the bill at a restaurant or simply borrowing a small amount from a friend. In the past working out who owed what could often be a long, complicated process. This, hopefully, will be a thing of the past with a new streamlined mobile payments service recently launched by Visa Europe. Registered consumers can simply transfer funds to any Visa cardholder in Europe from their phone.  What's more the app lets you send money to an address book contact, mobile phone number or to a specific card number - whether the recipient is registered or not. Smart stuff I'm sure you'll agree. And a further move towards the advanced usability consumers increasingly expect from the banking industry. Peter Ayliffe, Visa Europe CEO, said the company had a number of new products and services in the pipeline that would "reflect the fundamental shift in consumer behaviour". This would ultimately lead towards the release of a digital wallet, he concluded. The last statement is particularly interesting. Consumers using their phone as a money-carrying device is not new. Notably in Japan and Scandinavian countries this approach has been widespread for some years. However adoption rates have been slow in the UK marketplace. Why is this? Concerns over security or the lack of viable services that focus on consumer benefits have probably played a part. Can Visa overcome these hang-ups? The company may well have played its trump card on this one-whether they'll win the hand, that's another matter. Read more on the Visa mobile payments story here. /blog/2011/october/splitting-the-bill-moves-into-the-21st-century-with-simple-mobile-payments/ /blog/2011/october/splitting-the-bill-moves-into-the-21st-century-with-simple-mobile-payments/ Thu, 13 Oct 2011 08:50:00 +0000 Andrew Hebron /blog/2011/october/gartner_magic_quadrant/ Retail banking core banking technology could soon have more in common with mobile app stores than the legacy core banking systems of old, according to a new report from Gartner. The industry analyst says that increasingly flexible service-oriented architectures will inevitably drive demand for more open development where "banks sharing a common core banking vendor solution participate in a marketplace providing the capacity to buy or sell enhancements". Opportunities for growth Overall, Gartner says that in spite of persisting economic uncertainty, banks are more alert than ever to the opportunities for business growth. The industry analyst's Magic Quadrant for International Retail Core Banking says that CEO's are "steadfastly shifting from post-recessionary caution to a posture of growth…it's clear that technology is in the cross hairs to serve as the catalyst for growth." While existing core banking systems are coming under greater scrutiny than ever, Gartner reports that CIOs are keen to upgrade strategically and in line with business objectives rather than simply swap out one core banking system for another. A drive towards standards? When it comes to the technology itself, it's no surprise to see service oriented architecture (SOA) high on the priority list, but here Gartner says that as vendors acquire or launch more sophisticated SOA core banking solutions, this will drive increased interest in standardisation. As a consequence, a consortium of banks, vendors and service providers has grouped together to 'industrialise' SOA. This Banking Industry Architecture Network (BIAN) is "expanding membership and deliverables toward integration standardisation". The big fix Which leads us back to the concept of an app store for core banking. In truth, this vision isn't dissimilar from open approaches to solution development that have been around for a number of years in other industries. Here the notion of shared risk and ownership has enabled organisations to participate in communities where skill sets and solutions are shared across multiple stakeholders. But combined with the recent consolidation in the vendor community and banks' hunger for growth, it's likely to play a more prominent role in banking in the months and years ahead. As Gartner says, "the consensus expectation is that technology is the big fix to outrival [their] competitors". /blog/2011/october/gartner_magic_quadrant/ /blog/2011/october/gartner_magic_quadrant/ Wed, 12 Oct 2011 17:21:00 +0000 Barry Kislingbury /blog/2011/october/bank-simple-introduces-‘safe-to-spend’-feature-a-glimpse-into-the-future-of-online-banking-or-just-a-gimmick/ We've been hearing a lot about BankSimple for about six months now. All the talk has been about an innovative user experience, 'no surprise' fees and more besides. But what can the bank deliver that is genuinely different and useful? We've just seen a video that gives some of the answers. It's easier to watch than to explain, but one thing that did strike us immediately is the 'safe to spend' feature. This clever little widget highlights the individual's available credit taking into account imminent regular payments, and more general spending trends. That's neat. There's nothing more annoying than checking a healthy account, blowing some cash on a new jacket and then discovering at the end of the week that you're on skid row thanks to an automated credit card payment that just went through. So what else does it do? Well, imagine searching account statements search by location, company and name-far more convenient than scrolling through a mind-numbing list of transactions. Other functionality such as 'locked' payment goals seem less adventurous - certainly nothing a calculator and a bit of will power couldn't handle in the past. That said, there's plenty to whet our appetites for when the service finally goes live.  File under 'watch and enjoy'. Click here to watch the video. /blog/2011/october/bank-simple-introduces-‘safe-to-spend’-feature-a-glimpse-into-the-future-of-online-banking-or-just-a-gimmick/ /blog/2011/october/bank-simple-introduces-‘safe-to-spend’-feature-a-glimpse-into-the-future-of-online-banking-or-just-a-gimmick/ Mon, 10 Oct 2011 16:06:00 +0000 Tim Tyler /blog/2011/october/idc-backs-geoguard/ I'm probably too old for geo-location apps, but I use them anyway. Not so much for the novelty badges-who wants to be mayor of the coffee shop anyway-but because they are useful for restaurant reviews, as city guides and for sharing travel photography. That said I can understand why anyone over the age of 30 would find them annoying. So it's interesting to see whether Misys will be able to make an impact with GeoGuard, a new service that makes it easy for customers to log on with their banks via popular social media 'geo-location' tools. The verdict is already in from IDC. In one of its ICT alerts last week, Alys Woodward, Program Manager European BI and Analytic Applications, IDC, focused on GeoGuard's use of location-based data, which enables a bank's customers to check in using applications including Gowalla, Foursquare and TripIt. IDC focuses in on the way in which GeoGuards makes a so-called 'novelty' social media application genuinely useful, helping customers to get swift access to common banking services when they travel abroad. But they also go one step further, looking at the wider impact that GeoGuard will have on social media businesses as well as banks. According to the bulletin: "The apps that win will be those that deliver genuine value to users. For people to share data with apps, the app has to deliver more value than the users put on their data and their privacy… Preventing the ATM eating your bank card in an exotic location delivers value; getting an annoying award from an app doesn't." IDC also identifies the growth in geo-location data and application usage as a potential game changer as part of the role of 'big data' in the future of large enterprises, including financial institutions: "As more location-based apps develop, the velocity and volume of data that they supply will be huge, making this a "big data" opportunity…However, for organizations to embrace the cutting-edge technologies of big data, the applications have to deliver strong business value. The proof of the pudding with GeoGuard will be in the level of uptake it achieves." That's true. But what will also be interesting will be the demographic that starts using the service. Will anyone over thirty-tech writers excepted-be happy to use it? And to what extent will app developers modify the user experience to emphasise privacy and security?  I could easily imagine Foursquare offering a ring fenced sub-set of the application which offers a secure gateway to a bank or even close family members when you're travelling, for example. The potential, like big data, is enormous. You can read more of the report here. For some interesting predictions on the future of mobile security - including the increasing segmentation of work and personal data - click here . /blog/2011/october/idc-backs-geoguard/ /blog/2011/october/idc-backs-geoguard/ Mon, 10 Oct 2011 10:06:00 +0000 Olivier Berthier /blog/2011/september/transaction-banking-trends-sibos-2011/ Sibos was hectic for me as always. But dozens of meetings with banks, analysts and journalists revealed some important trends in Transaction Banking with a particular focus this year on Trade & Supply Chain Finance. Firstly, banks are more focused than ever on improving their cost-income ratios. This drive to improve efficiency and do more with less isn't going to go away any time soon. Tied into this is a growing awareness that better customer service is the foundation for better business performance. A good example where banks are looking to step up customer relationships is to be found in this year's buzz around the new Bank Payment Obligation (BPO) instrument spun off from the SWIFT Trade Services Utility (TSU) data matching and workflow engine. Now that BPO has been practically endorsed by the International Chamber of Commerce (ICC) with a formal calendar of work to reach standardisation around 2013, this activity is gaining significant momentum. And there was a distinct shift this year from merely talking about the topic, to banks wanting to deliver BPO as a core part of their trade & supply chain offering. The benefits are clear: as well as providing a collaborative platform for banks to engage in supply chain management, banks will be able to compete with one another by developing standards-based individual supply chain solutions for customers (where 'standards' is the key word). It means that banks can send a clear message to their customers about how they can help them better manage their own working capital and that of their suppliers. There's no question in my mind that this is the future of trade & supply chain services: going beyond a volume service, to something that adds real value across the financial supply chain. We're going to see more and more of these innovations in the coming months, hopefully once we fully understand the impact of Basel III and banks respond to its likely impact on margins and profits. /blog/2011/september/transaction-banking-trends-sibos-2011/ /blog/2011/september/transaction-banking-trends-sibos-2011/ Fri, 07 Oct 2011 10:33:00 +0000 Tim Tyler /blog/2011/september/mobile-grows-up,-but-social-media-drags-its-heels/ Like most years, Sibos passed in the blink of an eye. But between the non-stop cycle of presentations, meeting and socialising I managed to spot some clear trends that are shaping banks attitudes to mobile. Firstly, there's a growing realisation that there is a big difference between banking for mobile devices and banking for mobility. Simply replicating your online service on a smaller screen won't cut it for today's digital natives. Instead banks need to get ready for a world where mobility can mean anything from switching from room to room to crossing borders and international time zones and everything in between. IDC already predicts that by 2014, more than 50 per cent of all online interactions will take place on mobile devices. And when you hear Facebook's mobile chief say pretty much the same thing about access to its service, then it's even more important that banks don't get left behind. Especially when new entrants, such as Bank Simple, are about to enter this space unencumbered by legacy core banking systems. Getting social and mobile device mix right for banking On the subject of Facebook, there was a lot of talk about social media. But I don't think that Sibos had quite the right focus here. Most of what I witnessed focused on how banks can use channels such as Facebook and Twitter to monitor and measure customer sentiment or feedback. In itself that's valuable, but when you look at the rich connections that other industry sectors are making with their customers using these channels, it's clear that banking is falling behind. The secret to earning new business and extending customer loyalty is more than a Facebook page, a twitter account and a set of analytics tools. The latest mobile device technologies and social media, in all its many forms, are just the raw materials. Smart banks will work with vendors who can fuse these elements to deliver genuinely innovative and useful solutions that differentiate their business from the competition. Misys GeoGuard is a good example of this approach in action, combining device technology (geo-location) with social media (location based apps such as Foursquare and Gowalla). Mobile: The transactional trend This trend is also reflected in the way that many banks want to move beyond simply delivering retail services in the mobile environment. Many of the conversations that I had with some of our customers revolved around the future of mobile services that meet the needs of transaction banking clients. That could have a profound effect on vendor market share in this space.  Historically, the main suppliers of mobile solutions have been retail banking focused. But if banks want to deploy a wider range of mobile services, they will need to choose from a narrower field of software vendors who have acquired a deep experience of this sector and who can also deliver mobile solutions that cover the banking services they require, not just retail. A wake up call That said Sibos still obeys its own laws. Beyond the event I continue to meet banking technologists and decision makers who insist that social media and mobile devices are for kids. The truth is, social media and mobile technology are maturing fast, as this year's Sibos proved-and being used by a wider and wider demographic. It's not just their next wave of customers that banks should be prepared for, but the social and mobile channels that this new generation already take for granted. /blog/2011/september/mobile-grows-up,-but-social-media-drags-its-heels/ /blog/2011/september/mobile-grows-up,-but-social-media-drags-its-heels/ Thu, 06 Oct 2011 15:14:00 +0000 Olivier Berthier /blog/2011/september/trends-in-transaction-banking-report-(part-1)/ Reducing IT complexity and reducing IT costs are the main priorities for transaction bankers according to a new report commissioned by Misys and published by Finextra research. The survey reveals that the consolidation of payments, cash management and trade finance shows no sign of slowing down. Some 77 per cent of the organisations questioned said that they had created a transaction banking group, 'combining, at a minimum, cash management and trade finance.' Three years ago, just before the collapse of Lehman Brothers, the figure was 57 per cent. At first glance the consolidation message looks robust. But it doesn't necessarily mean that consolidation is seamless and efficient. Putting the cash management, trade finance and payments groups on the same floor or in one building doesn't guarantee seamless integration of operations and back office processes. This is reflected, perhaps, in the answer to another question, "What will be the strategic focus for managing your transaction services or cash management business over the next three years?" The top two responses, 'Rationalising and streamlining back-office systems' and 'Reducing costs', imply that integration of processes, technology and people hasn't been as successful in the real world as they are on an org chart. Still, banks continue to look forward. Almost half of those surveyed listed 'Online Channel Development' as the top transaction banking priority for next year. That's hardly surprising at a time where corporate clients, be they SMEs or large multinationals, are demanding more sophisticated and innovative products from their banking partners. There's little question that the growth in smart phone and tablet usage is fuelling this trend, especially for low level activities, such as payment authorisation or reporting. To find out more about the future of transaction banking according to the banks themselves, download the Trends in Transaction Banking report. /blog/2011/september/trends-in-transaction-banking-report-(part-1)/ /blog/2011/september/trends-in-transaction-banking-report-(part-1)/ Thu, 06 Oct 2011 10:48:00 +0000 thefutureofbanking.org team /innovation/2011/september/costincome-ratio-video/ It's one of the most pressing topics in banking today. But why is everyone focusing on cost-income ratios? Simple: For banks they still remain one of the most reliable ways of measuring overall performance and business efficiency. By improving customer experiences, banks can increase revenues streams, reduce expenditure and boost their overall cost-income ratios. Watch the video to find out how. /innovation/2011/september/costincome-ratio-video/ /innovation/2011/september/costincome-ratio-video/ Wed, 21 Sep 2011 09:38:00 +0000 thefutureofbanking.org team /webcast/2011/september/beyond-the-smart-phone-app/ With penetration rates up amongst consumers, where does the humble banking app go from here? In this Webcast Tim Tyler, Solutions Manager at Misys, discusses what should banks be looking to achieve with their mobile banking solutions. He also looks carefully at the relationship between app innovation, platform breakdown and customer adoption rates. /webcast/2011/september/beyond-the-smart-phone-app/ /webcast/2011/september/beyond-the-smart-phone-app/ Mon, 19 Sep 2011 17:11:00 +0000 Barry Kislingbury /blog/2011/september/paypal-looks-to-the-future-with-“real-time”-inventory-checks/ We've known for a while that invention is crucial to success in the payments market. That's why I followed with interest PayPal's recent announcement about the inroads it's making with new technology. Some of the developments including geo-targeted mobile advertising we have seen before. But advances such as real-time inventory availability represent large scale progress and sit at the very heart of the PayPal business model. Elsewhere the company will now offer barcode scanning, virtual wallet facility plus mobile and POS payments. It's a notable piece and certainly worth a read (along with the accompanying YouTube video). The last words on the matter go to Scott Thompson, PayPal President. "The act of paying for something should be as seamless as your decision to buy it. The future is about creating real consumer choice, flexibility and control over how people shop and pay." Food for thought, certainly. Read the PayPal blog here Watch the video here /blog/2011/september/paypal-looks-to-the-future-with-“real-time”-inventory-checks/ /blog/2011/september/paypal-looks-to-the-future-with-“real-time”-inventory-checks/ Mon, 19 Sep 2011 16:01:00 +0000 thefutureofbanking.org team /blog/2011/september/the-week-in-words-the-future-of-banking-team-picks-its-favourite-reads-from-the-past-seven-days/ After a busy few days getting the future of banking site up and ready in time for Sibos 2011, we polled the team and asked them to choose their favourite stories of the week. To say the past seven days has been eventful is an understatement. From the tenth anniversary of 9/11 to the news that a UBS rogue trader racked up losses of U.S.2bn, we were spoiled for choice. Here, in no particular order, are the top five.  9/11: How Osama bin Laden caused our banking meltdown and financial crisis Excellent analysis by Jeremy Warner at the U.K. Daily Telegraph that paints a clear picture of the past decade and the events that led today's financial crisis Mitigating the risks of open account trade Jonathan Barlow of Finance Asia gives a detailed and compelling account of the ups and downs facing businesses who take the open account route. What's different about customer experience in financial services? Well, what is the difference? Martin Rosenmejer at Webcredible explains the importance of experience from the perspective of retail and investment banks. Banking in the year 2036 For once, a really worthwhile video roundtable―in this case hosted by American banker. The panel of experts look 25 years into the future and predict how the world economy will evolve. Back from the Brink, by Alistair Darling The former U.K. Chancellor of the Exchequer was at the heart of the storm three years ago. This review of his autobiography gets to the heart of the matter including the painful relationships with Gordon Brown, and The Governor of the Bank of England, Mervyn King. /blog/2011/september/the-week-in-words-the-future-of-banking-team-picks-its-favourite-reads-from-the-past-seven-days/ /blog/2011/september/the-week-in-words-the-future-of-banking-team-picks-its-favourite-reads-from-the-past-seven-days/ Mon, 19 Sep 2011 15:54:00 +0000 Barry Kislingbury /blog/2011/september/think,-wave,-buy-how-mastercard-is-teaming-up-with-microsoft-kinect-to-test-gesture-based-purchasing/ Earlier this year, Google ran an April Fool that led many to believe―including me―that gesture-based email had just been launch. It was a great gag, but it doesn't begin to compare with the reality of MasterCard's latest announcement, a gesture based payments system based on Microsoft's Kinect technology. Let's be clear, this isn't a joke. Certainly not to retailers and banks who could be faced with a new generation of consumers who want to wave and buy in front of their TVs. On the face of it, it's a smart idea which converts impulse to purchase with a flick of the finger. Even better, gestures are matched to products. If you're hungry, buy a burger by making hand-to-mouth eating motion, for example. Gizmodo magazine has the lowdown here . In the meantime, place your bets on when we can expect a payment service that can read your mind. Now that's something to think about. /blog/2011/september/think,-wave,-buy-how-mastercard-is-teaming-up-with-microsoft-kinect-to-test-gesture-based-purchasing/ /blog/2011/september/think,-wave,-buy-how-mastercard-is-teaming-up-with-microsoft-kinect-to-test-gesture-based-purchasing/ Mon, 19 Sep 2011 15:43:00 +0000 Andrew Hebron /blog/2011/september/the-changing-face(s)-of-social-media-banking/ The idea that 'one profile fits all' seems to be a thing of the past when it comes to financial services and their social media operations. I read an interesting research piece by Corporate Insight which shows how the likes of Twitter and Facebook are helping corporates drill further down into the needs and interests of their followers than ever before. It raises some pertinent questions for the industry. At present, some 38 per cent of the financial firms monitored by the company have two or more Facebook pages. And when it comes to Twitter usage, 45 per cent of the firms monitored also have two or more profiles. Diversification So we now know it's the norm for banks to have multiple Facebook profiles or Twitter accounts that cover a variety of areas including company information, news, recruitment, products, services, charitable efforts and more. More interestingly still, the research found that multiple profiles on social media sites do nothing to detract from consumer interest. But why is this? Improved relationships Alan Maginn, Corporate Insight Senior Analyst, says:  "By using multiple Facebook pages and Twitter profiles, firms can offer content to their fans and followers that is better suited to their needs or interests. "This can increase the impact of a firm's communication and improve relationships with core constituencies."  This has certainly been the case for Bank of America which despite having the most Twitter profiles - six in total - has three of the most followed accounts in the financial service sector's top 20 Twitter list. The future is social? As the lines continue to blur between social and business media online, it seems that customers expect as much choice on their smartphone whether they're visiting their bank website or Facebook. Functionality is key. This trend of tailored messaging for consumers shows no signs of letting up, either. A recent study by JD Power & Associates showed that over 60% of retail banking customers are now using social media - proving the consumer appetite is as great as ever. With all this increased bespoke messaging from financial service institutions and a willing, engaged audience, it seems the smart money is on social. /blog/2011/september/the-changing-face(s)-of-social-media-banking/ /blog/2011/september/the-changing-face(s)-of-social-media-banking/ Sun, 18 Sep 2011 12:05:00 +0000 Tim Tyler /blog/2011/september/customers-may-be-upwardly-mobile-but-costs-needn’t-be…/ Even if you're a bit tired of journalists and analysts talking about a new era of banking, it's still worth reading a new report from KPMG that takes an objective view of some of the technologies shaping the future of the industry. Released at the ET Banking Technology meet, 'Technology-enabled transformation in banking', sorts through a lot of the hype and mines a rich seam of industry debate. Critically, the research found that while technical adoption rates for branchless banking - over smartphones and the internet - have never been higher, the associated costs have fallen just as sharply. A mobile future? We've known for a while that with such convergence towards smart handheld devices and mobile payments, the financial services industry is seeing increased opportunity. Banks are now considering how best to harness this growth. The report said: "This newly evolved payment channel will not only provide the banks with an opportunity to tap new revenue streams but would also aid in reducing overall costs of serving the customers." Early adoption At present, some 58 per cent of companies questioned in the report currently have a mobile payments strategy in place while 50 per cent presently offer mobile payments services. "Some are thinking of capitalising the first-mover advantage by developing innovative mobile solutions with an objective to gain market share and increase revenues, while others are waiting for the technology standards to get set and customer adoption and interest to rise," the report states. The future of banking So where does the industry go next? "The most successful institutions will be those that combine visionary technology with strong customer centricity," the report concludes. Have we reached the tipping point for branchless banking? You can decide for yourself by downloading the report,  Technology-enabled transformation in banking /blog/2011/september/customers-may-be-upwardly-mobile-but-costs-needn’t-be…/ /blog/2011/september/customers-may-be-upwardly-mobile-but-costs-needn’t-be…/ Sun, 18 Sep 2011 12:03:00 +0000 thefutureofbanking.org team /webcast/2011/september/the-future-is-mobile/ Adaptation is key to increasing online banking adoption. In this Webinar Tim Tyler, Solutions Manager at Misys, explores the challenges banks will face. On top of this he discusses browser compatibility, delivery channels and what a solution needs to deliver to hit the customer sweet spot. /webcast/2011/september/the-future-is-mobile/ /webcast/2011/september/the-future-is-mobile/ Fri, 16 Sep 2011 14:32:00 +0000 Tim Tyler /blog/2011/september/ow-to-push-the-boundaries-of-mobile-banking-with-misys-geoguard/ Mobile banking is the future, certainly if you believe the analyst reports. But financial services businesses are right to challenge that assertion. It's blindingly obvious that mobile access to accounts, products and services is convenient. But how do you make it genuinely useful, beyond a portable version of your web site? That's why the team at Misys is trying to push the boundaries of what's possible with mobile financial services. This particular journey started when we started looking at the way that other industries used standard features built into mobile devices. Take mobile communications. The moment you step off plane in a different country, your phone automatically detects your location and connects you seamlessly with a local carrier. Everything to do you with your account from SMS updates to service charges is automatically calibrated to your situation. Now look at it from the perspective of your other pocket, the one carrying your wallet. Many of us have had a card refused when travelling because we failed to notify our bank in advance. A quick phone call unblocks your currency, but it's an annoying distraction in today's highly connected world. That led us to develop a new service, called Misys GeoGuard, which makes use of location-based social media applications so that customers can confirm their location to authorise bank transactions and get fast access to money in an unfamiliar. We built it on Force.com, salesforce.com's social enterprise platform for custom app development. As there is no on-premise software or hardware, banks can deploy it easily on their existing infrastructure. Best of all, it's simple to use and completely secure. Customers, who use social media geo-location services, can choose from Foursquare, Facebook Places, Gowalla and TripIt to confirm the place that they're visiting. GeoGuard also addresses customer privacy concerns. The solution doesn't provide banks with tracking information and Misys acts as a third party so that the bank is never in possession of a customer's location. Here are some of the ways that this approach benefits customers and banks: Geographic rules on card usage prevent false-positives on card blocks based on out-of-character locations. A card lock prevents a card from being used for any cardholder-present transactions unless the customer has "checked in" within user-defined parameters based upon radius and time. A 'Geo-Fence' extends the Card Geo-Lock so that customers can define pre-approved locations where they don't need to check-in. Misys GeoGuard will send location-based alerts when a customer crosses either customer-defined or bank-defined boundaries, for example when arriving in a new country. Alternatively, an alert could be generated when a customer "checks in" to a specific location. In short we think GeoGuard takes mobile banking to the next level. By combining smartphone technology with popular social media applications, it makes mobile banking genuinely useful and much, much more than just a portable annex to an existing web site. /blog/2011/september/ow-to-push-the-boundaries-of-mobile-banking-with-misys-geoguard/ /blog/2011/september/ow-to-push-the-boundaries-of-mobile-banking-with-misys-geoguard/ Fri, 16 Sep 2011 11:07:00 +0000 Tim Tyler /blog/2011/september/what’s-the-secret-to-hitting-a-fast-moving-mobile-target/ Two articles caught my eye this morning. First of all some new research from IDC predicting that mobile internet device access will overtake PCs in 2014.  According to IDC, "By 2015, more U.S. Internet users will access the Internet through mobile devices than through PCs or other wireline devices. "As smartphones begin to outsell simpler feature phones, and as media tablet sales explode, the number of mobile Internet users will grow by a compound annual growth rate (CAGR) of 16.6% between 2010 and 2015 "…Western Europe and Japan will not be far behind the U.S. in following this trend." It's a sobering report, especially when you remember that smartphones only started gaining traction about five years ago and the first viable tablet, the iPad is less than two years old. Irreversible disruption While I enjoyed reading the IDC report, a lot will happen between now and 2014, especially on the device front. If you want a hint of what to expect, here's the second story, this time from Fast Company about the future of wrist-watch devices . I'm not convinced that wristwatches are necessarily the way forward, but my view is less important than the general trend towards inexpensive portable wireless devices that cover a multitude of form factors. It's clear that the banking sector needs to get used to this new world of mobile. We need to think beyond devices and networks and understand that this is a profound and irreversible change in the way that customers interact with their providers. Remember, too, that these technological leaps are multiplied by the generational shift that is taking place this decade. The young, aspirational customers with whom you want to build life-long relationships simply won't waste their time with a bank that can't deliver the experiences they take for granted.  It's a moving target in more ways than one, but the earlier that banks put a coherent, forward-looking mobile strategy in place, the better they'll be positioned to retain and grow market share. /blog/2011/september/what’s-the-secret-to-hitting-a-fast-moving-mobile-target/ /blog/2011/september/what’s-the-secret-to-hitting-a-fast-moving-mobile-target/ Fri, 16 Sep 2011 11:02:00 +0000 Carmen Crutchfield /conversation/2011/september/portal-based-transactional-banking-services-are-helping-banks-to-break-new-ground/ Portal-based transactional banking services are helping banks to break new ground in this rediscovered, lucrative activity. But what's the best way to get the most of this activity and what are customers and businesses really looking for when it comes to services from their banks. /conversation/2011/september/portal-based-transactional-banking-services-are-helping-banks-to-break-new-ground/ /conversation/2011/september/portal-based-transactional-banking-services-are-helping-banks-to-break-new-ground/ Fri, 16 Sep 2011 10:59:00 +0000 Tim Tyler /conversation/2011/september/has-social-media-finally-grown-up/ Has social media finally grown up? According to Nielson, compared with the average adult, active adult social networkers are 75 percent more likely to be heavy spenders on music and 47 percent more likely to be heavy spenders on clothes, shoes and accessories. Meanwhile the fastest growth of social media use on smart phones is the over 55′s with 109% growth. Is it time to start factoring social into the customer banking experience? /conversation/2011/september/has-social-media-finally-grown-up/ /conversation/2011/september/has-social-media-finally-grown-up/ Fri, 16 Sep 2011 10:58:00 +0000 Tim Tyler /conversation/2011/september/-according-to-idc,-mobile-internet-transactions-will-overtake-traditional-pc-and-laptop-access-in-2014/ According to IDC, mobile internet transactions will overtake traditional PC and laptop  access in 2014. As banks move towards mobile, how do they deliver genuinely innovative services that offer more than just a scaled down version of their customer-facing web sites? /conversation/2011/september/-according-to-idc,-mobile-internet-transactions-will-overtake-traditional-pc-and-laptop-access-in-2014/ /conversation/2011/september/-according-to-idc,-mobile-internet-transactions-will-overtake-traditional-pc-and-laptop-access-in-2014/ Fri, 16 Sep 2011 10:57:00 +0000 Brian Edmondson /conversation/2011/september/the-rush-to-supply-trade-finance-services-has-increased,-as-banks-seek-a-safe-and-predictable-revenue-haven/ The rush to supply trade finance services has increased, as banks seek a safe and predictable revenue haven. What elements of service give banks a competitive edge and how do they stand out from the crowd in an increasingly busy marketplace? /conversation/2011/september/the-rush-to-supply-trade-finance-services-has-increased,-as-banks-seek-a-safe-and-predictable-revenue-haven/ /conversation/2011/september/the-rush-to-supply-trade-finance-services-has-increased,-as-banks-seek-a-safe-and-predictable-revenue-haven/ Fri, 16 Sep 2011 10:56:00 +0000 Steve Walshe /conversation/2011/september/the-movement-away-from-letter-of-credit-and-document-collections-to-‘open-account’-puts-bank-in-situation-where-they-are-not-as-involved-in-the-financial-supply-chain-as-they-would-like-to-be/ The rise and rise of supply chain finance is one of the transaction banking stories of the year. How can banks take advantage of this new opportunity? /conversation/2011/september/the-movement-away-from-letter-of-credit-and-document-collections-to-‘open-account’-puts-bank-in-situation-where-they-are-not-as-involved-in-the-financial-supply-chain-as-they-would-like-to-be/ /conversation/2011/september/the-movement-away-from-letter-of-credit-and-document-collections-to-‘open-account’-puts-bank-in-situation-where-they-are-not-as-involved-in-the-financial-supply-chain-as-they-would-like-to-be/ Fri, 16 Sep 2011 10:55:00 +0000 Barry Kislingbury /conversation/2011/september/-market-analysts-celent-say-that-2010-could-well-be-the-year-when-payment-services-hubs-went-from-being-an-esoteric-concept-to-an-accepted-way-forward-in-modernising-banks’-payment-infrastructures/ Market analysts Celent say that 2010 could well be the year when payment services hubs went from being an esoteric concept to an accepted way forward in modernising banks' payment infrastructures. Are payment hubs really that established, and what are the strengths and weaknesses of this approach? /conversation/2011/september/-market-analysts-celent-say-that-2010-could-well-be-the-year-when-payment-services-hubs-went-from-being-an-esoteric-concept-to-an-accepted-way-forward-in-modernising-banks’-payment-infrastructures/ /conversation/2011/september/-market-analysts-celent-say-that-2010-could-well-be-the-year-when-payment-services-hubs-went-from-being-an-esoteric-concept-to-an-accepted-way-forward-in-modernising-banks’-payment-infrastructures/ Fri, 16 Sep 2011 10:53:00 +0000 Srinivas Srikantha /conversation/2011/september/technology-catalyst-or-barrier/ Technology catalyst or barrier? The Vickers report leaves UK banks 8 years to reform and ring fence their retail operations. How will this impact their core banking road maps? /conversation/2011/september/technology-catalyst-or-barrier/ /conversation/2011/september/technology-catalyst-or-barrier/ Fri, 16 Sep 2011 10:50:00 +0000 Andrew Hebron /conversation/2011/september/from-it-to-iq-how-do-you-turn-technology-cost-centres-into-value-add-engines/ From IT to IQ: how do you turn technology cost centres into value-add engines. What steps must banks take to turn IT into an instrument for growth? /conversation/2011/september/from-it-to-iq-how-do-you-turn-technology-cost-centres-into-value-add-engines/ /conversation/2011/september/from-it-to-iq-how-do-you-turn-technology-cost-centres-into-value-add-engines/ Fri, 16 Sep 2011 10:49:00 +0000 Srinivas Srikantha /conversation/2011/september/technology-is-the-barrier-to-core-banking-migration-a-shortage-of-human-intelligence-is”-what-resources-do-banks-need-before-they-even-consider-transitioning-legacy-core-banking-systems/ Is there enough expertise to go round? How do banks make sure they get the human intelligence to support the migration to a new core banking systems? /conversation/2011/september/technology-is-the-barrier-to-core-banking-migration-a-shortage-of-human-intelligence-is”-what-resources-do-banks-need-before-they-even-consider-transitioning-legacy-core-banking-systems/ /conversation/2011/september/technology-is-the-barrier-to-core-banking-migration-a-shortage-of-human-intelligence-is”-what-resources-do-banks-need-before-they-even-consider-transitioning-legacy-core-banking-systems/ Fri, 16 Sep 2011 10:44:00 +0000 Tim Tyler /blog/2011/september/what-will-the-mobile-banking-world-look-like-in-2020-here’s-a-scenario/ Here is a launch description for a bank's new mobile banking offering. What year do you think this is from? "Customers will be able to check their balances before making a purchase, transfer money between current and savings accounts, and arrange for a household bill to be paid. Other services will include the ability to look at the twelve most recent transactions and, via SMS, be alerted to things such as when their balances reach a certain limit or that their credit card payment is due." It was 2000. 11 years ago. For a wireless application protocol (WAP) service launched by UK bank NatWest in partnership with mobile network operator Orange. Has much has changed since then? Mobile device market penetration and capabilities certainly have. But what about mobile financial capabilities? And how might things develop in another 10 years? 2020 vision statements are fashionable, probably because the year is synonymous with perfect eyesight. So, here is a fictional scenario to get you thinking about where mobile banking is headed by 2020. As Michael waved his mobile phone over the Airport Express entry gate, stepped onto the train and sat down, he remembered the first time he used his mobile phone to make a payment. As an excited student 13 years ago he had queued to be one of the first to get his hands on an Apple iPhone. He'd been excited by the range of apps available - both frivolous and useful - and the ease of use. But the first time the phone got him out of trouble was only a few days later when he realised he was late paying his credit card that month. Out on a camping trip with friends for the weekend, he used the phone's browser to log on to his bank's website and navigate through the unoptimised screens to initiate a funds transfer. And while he was there he transferred his share of fuel money to the friend he'd already authorised as a third-party beneficiary. "Things have improved a lot since then," he thought. His phone beeped, and looking down at the screen he saw an alert from TelcoBank. "Welcome to the UK, Michael," it said. The message went on to summarise his roaming voice and data options, as well as tell him which local bank ATMs he could use his phone at to withdraw cash from his current account without incurring charges. "Probably won't be needing that," he said to himself. The same country-change alert was also sent to his email address. Michael recalled that his bank told him this was an extra security measure, similar to the multichannel alerts he received whenever a transaction was made on his account that exceeded his personally set limit for notification. Coming out of the station, he decided to grab a bite to eat before heading to his hotel. In the queue at the fast food joint, pondering his order, he spoke into his phone: "Activate card for payment". Once his processed meat treat was slapped onto his tray, he waved his now authenticated phone, and the NFC chip within it, over the counter device. Unwrapping his meal at the table and having second thoughts about his choice, he reached for his phone to deactivate the card. "Nah, that'll be good for the taxi too," he thought. And if he forgot, it would deactivate itself in 15 minutes anyway. Later that night, still wide awake from jet lag, Michael lay on his bed, wondering if he had been paid yet from his last contract. Flicking on his touch screen he opened his financial application. Accessed from a shortcut icon, but opening in the web browser, the functionality and ease of use of the application was even better than the bank's phone-native application he had downloaded from the application store onto a previous phone five years prior. He guessed that the cyclical shift from web delivery, to native apps, and back to web delivery came about because the "smartphone" market was still quite fragmented, and banks had a hard time maintaining separate code bases for apps, despite some industry efforts to improve standardisation. TelcoBank obviously had a bit of an edge there, given its heritage. But even it saw the sense in using HTML6 and CSS3 to handle the presentation layer on different phones, while also linking in a standard way to each phone's hardware capabilities such as GPS and camera, and related apps for things such as voice authentication and recognition. Checking his balance was just a finger tap away, and yes, he had been paid. "Good, I can get some shopping done before the meeting tomorrow," he thought. He then requested that day's transaction list, and checked that the bank's personal financial management tool had correctly categorised his travel and food expenses for that day. The PFM tool also informed him that he had some discretionary funds for the shopping trip, which was good news. His last task was to transfer some money to his daughter. Thanks to the integration with the phone's synchronised contact book, this was as easy as selecting her from contacts, clicking 'send money' and entering the amount. Financial management done for the night, he resolved to get some sleep and set the alarm clock on his phone for the morning. Twenty-five years after getting his first basic mobile phone, this was still the application he used most often after voice and text. What do you think? Too much evolution and not enough revolution? Are there any other technologies or use cases that could emerge and become widely adopted for mobile-based financial services by 2020? (For our take on the possibilities mobile banking offers today, take a look at the Misys website .) /blog/2011/september/what-will-the-mobile-banking-world-look-like-in-2020-here’s-a-scenario/ /blog/2011/september/what-will-the-mobile-banking-world-look-like-in-2020-here’s-a-scenario/ Mon, 12 Sep 2011 11:53:00 +0000 Tim Bennett /blog/2011/september/the-future-bank-is-there-an-app-for-that-too/ Should your internal banking systems look more like Facebook? You'd think so given all the recent discussion about the "consumerisation" of enterprise IT. The argument goes something like this: Gen Y (commonly described by demographers as those born from 1981) are the most technologically sophisticated workers to enter the market. In many cases their understanding of technology trends and potential is greater than the institutional technologists under who they currently work and will eventually replace. This kind of discussion undertandably gets the banking industry in a user experience flap and, to be honest, results in a lot of hot air. Sure there's lots of discussion about how new technology and culture shifts will change the products, services and channels that customers want from their banks. But what impact are these shifts really having on how banks organise their people and infrastructure internally? Let's start with the obvious. Business users increasingly expect enterprise IT to be as easy to use as any consumer application.  They are no longer willing to quietly accept complicated user interfaces and obtuse menu structures, or sluggish and bug-ridden applications. Isn't there an app for that? How does this translate into the real world? A savvy young manager within a retail bank might be considering a new project that focuses not on launching a particular product, but on personalising customers' experiences with the bank - perhaps mixing elements of existing products. When told that there's no budget for the lengthy integration project required to pull it off, their response might well be "But isn't there an app for that?" The next generation of IT professional, too, will have greatly different expectations of what tools and approaches they can use in the work environment. How do you adjust to the mindset of the new generation when there are still  220 billion lines of Cobol running in core applications worldwide ? More to the point how do you fight to attract, retain and train from a shrinking pool of people with the required Cobol skills. It's gets better. Banks will have to take into account the new web natives' preferred modes of communication, collaboration and development. Appreciation of open source software where appropriate, blurred lines between professional and social networking, and a focus on presentation and reliability as much as functionality are just some of the things banks will have to accept and encourage among their employees. Are you ready for that? As if that wasn't enough, IT procurement is also undergoing a profound shift. Already across multiple industries, large and small organisations are embracing Software as a Service. And the purchasing of granular functionality as required (rather than software in massive suites) is spreading from the mobile phone application space to the enterprise . Salesforce , Intuit , IBM and Google are just some of the large enterprise software companies at the forefront of this "app store" approach to software creation and distribution. And as bankers and technologists become increasingly accustomed to this model they will want to not only use applications delivered this way (where appropriate), but also contribute to their development. There is a chink of light at the end of this long tunnel. As organisations, banks are often criticised for being slow to innovate. At best they are fast followers of trends. But who should the banks be following? Their traditional and emerging competitors? Other industries? I would argue that as well as following their customers' lead, banks should be paying more attention to following their employees - picking up on changes in attitude and preferences, and giving them the right environment and tools to try new ways of working and new ways of meeting customers' needs. /blog/2011/september/the-future-bank-is-there-an-app-for-that-too/ /blog/2011/september/the-future-bank-is-there-an-app-for-that-too/ Sat, 10 Sep 2011 11:50:00 +0000 Tim Tyler /blog/2011/september/does-banks’-grasp-of-cross-channel-customer-service-extend-to-social-media/ At first glance, the statistics describing banks's use of social media look positive. According to Christophe Langlois of Visible Banking who tracks social media adoption in the banking sector, more than 1,350 retail banks, credit unions and building societies have established a presence on Facebook or Twitter. But when you scratch beneath the surface, the picture is quite so rosy. Many organisations have opened an account, attracted fans or followers, but then done very little to engage these individuals. We've said this many times before at the Future of Banking. Simply opening a Twitter or a Facebook account can do more harm than good. And I agree with the recent discussion in Australia which described inactive Twitter channels as the equivalent of a bank opening a branch and forgetting to staff it. That said, more and more banks are beginning to engage customers via Twitter in particular, a move that's been helped by the growing adoption of verified accounts by financial services providers. In April this year, Citi was the first bank to get the verified status. 93 million unique global users visited Twitter.com in June 2010 from home or work locations (and this excludes visits from mobile devices or anyone using a Twitter application such as Tweetdeck or Hootsuite). So there's obviously an active and growing market. Banks are using Twitter in three different ways: • Support their brand and marketing - banks that become known for using social media well benefit from positive brand association, particularly in the youth and young professional markets. The channel is also useful for real-time communication about special offers, new products, competitions and the like • Listen to customers - feedback from monitoring conversations about the bank can help form new product and service strategy. Banks can also identify customer complaints that have the potential to snowball online if not addressed early. The United Airlines broken guitar affair shows the power that a catchy YouTube video can have to damage brand value. The same applies for influential bloggers or tweeters, for example when a best-selling author tweets and blogs "Wells Fargo Bank doesn't want my business" • Provide customer service - short public tweets can answer a simple question or direct the customer to the right online/phone resource. More detailed responses and dialogue can take place via direct message (DM) and via this channel the bank can get the customer's ID number so the interaction can be logged in the customer information file that's also available to branch and contact centre staff. There are potential regulatory issues that banks need to bear in mind communicating with clients over social media and asking them to share recommendations, particularly when short message formats make it difficult to incorporate necessary disclosures. Any social media initiative has to avoid the trap of becoming another channel silo. This is especially important as more and more customers expect to be able to engage their service providers in cross-channel communications. A global survey by Genesys and Datamonitor/Ovum that took in 8,800 consumers across 16 countries found that more than 90% of consumers said in the past year they had at least one cross-channel conversation where they initiated a request or posed a query in one channel, and then continued that same conversation through multiple contact methods in order to reach a resolution. And 29% of these consumers said they wanted Twitter to be part of their cross-channel communication options with their service providers. To do this effectively, banks will need systems and process in place to help them retain the context of a customer transaction as it moves across channels so that a customer who escalates from self-service online, an online chat agent or a Twitter DM to a call centre agent will not have to repeat information that they already provided in the other channel. /blog/2011/september/does-banks’-grasp-of-cross-channel-customer-service-extend-to-social-media/ /blog/2011/september/does-banks’-grasp-of-cross-channel-customer-service-extend-to-social-media/ Wed, 07 Sep 2011 11:47:00 +0000 Andrew Hebron /blog/2011/august/predicting-what-a-bank’s-customer-will-do-next-the-new-analytics/ Why do so many CRM projects fail? Back in the late 90s, CRM was the killer TLA (three-letter acronym) bandied about by vendors, analysts and the press. Big budgets were thrown at projects that promised to provide banks with single views of their customers, transcending established product and channel silos. From this they would be able to analyze data to better understand their customers' behaviours, increase cross-sell and upsell rates and become more customer-friendly and profitable institutions. Why did such a large proportion of these big projects founder? The main reasons were lack of planning, failure to do anything about the quality of data, which was often siloed and duplicated across the organisation, no commitment to improving internal and customer-facing processes, and IT project management failure. So where are we today? CRM is no longer such a fashionable term. But continued investment in this area has seen many of the things it promised now become reality for most leading banks. Datawarehousing and multi-channel architectures have reduced the silo and duplication problems. And marketing departments have become much more sophisticated in their use of data. But the data quality problem persists for many institutions and there are new approaches emerging to improve the situation. Data governance is becoming a key part of operational strategy - often driven by regulatory compliance requirements. But it is providing significant benefits beyond that. This Q&A discussion with IBM experts features a good overview of emerging best practice in data governance. Meanwhile, Banco Popular has taken an innovative approach to data quality measurement , with the use of an index. The index is based on 23 variables-such as name, date of birth, education level, occupational codes and other demographic and transaction information. Banco Popular then classifies these data variables as "mandatory," "necessary," or "desirable". It then scans data to ensure inclusion and consistency of these variables across departments, with errors sent back to pertinent business lines for corrections to be made based on the bank's prioritization rules. With good quality data - and the right tools for analysing it - it's possible to glean business intelligence, and answer questions that business managers might pose in the area of financial, profitability and credit risk analysis. For example: How can I know if our liquidity ratio falls outside a 70%-80% range? What is the interest revenue, net of funding costs, being generated by each branch? Is this branch selling enough of our newly launched product? Is it meeting its targets? How does its performance measure against others? Why has fee income reduced over the past quarter? What is the bank's consolidated exposure to a particular customer segment? Business intelligence is mainly about analysing data to discover what has happened, or what is happening, with customers and internal operations. This intelligence is presented in a report, dashboard or scorecard. But once you've got better quality data it should also be possible to make accurate predictions from it. This is the burgeoning field of predictive analytics. At a basic level, using techniques such as uplift modelling banks are getting better at targeting and measuring the impact of their marketing activities - even to the point of knowing when to leave customers alone. Uplift modelling has become more widespread over the past few years. It is a predictive modelling technique that directly models the incremental impact of targeting marketing activities. At US Bank, the technique delivered a 73% increase in incremental accounts opened from a single campaign, along with a 32% reduction in mailing volumes. First Tennessee, Rabobank Nederland and S&T Bank have also benefited from using predictive analytics in their marketing processes to better target the right customer at the right time. And it's not just Western banks getting in on the act. China's Xi'an City Commercial Bank is one of the first customers to work with IBM at a new predictive analytics lab it opened in that city in March. True predictive analytics should be able to deliver much more than current widespread practice of using business rules to suggest a next logical product for a customer based on some past behaviour analysis. And as the vendors improve the user-friendliness of predictive analytics - both in composition and results output - it should become more widely deployed to information workers within banks, and not just trained statisticians. So what kind of things would a bank want to predict from the mass of information available to it about its customers? How about: Using bill and credit card payment patterns to identify customers at risk of mortgage default Tracking customer contact, the nature of queries and account activity to predict customers at risk of switching banks or abandoning an account Moving beyond the traditional points-based approach for fraud prevention to monitor transactions in real time while predicting changing patterns of fraudulent behaviour. Using natural language processing to monitor online forums and social media and track customer sentiment towards your bank , and how this could affect marketing campaigns. Can you think of any more? /blog/2011/august/predicting-what-a-bank’s-customer-will-do-next-the-new-analytics/ /blog/2011/august/predicting-what-a-bank’s-customer-will-do-next-the-new-analytics/ Wed, 31 Aug 2011 11:44:00 +0000 Barry Kislingbury /blog/2011/august/who-has-the-best-prospects-in-the-cross-border-remittance-markets/ Most banks aren't interested in competing globally with the established money transfer operators in the remittance market. Even the largest couldn't come close to the 170 plus country networks of the likes of Moneygram or Western Union. And nor would they want to. But banks increasingly do want to compete with them in specific corridors where there is a rich flow of migrant workers and the bank or its subsidiaries have a presence. Overall remittance flows to developing countries were estimated to have reached US$316 billion in 2009, almost triple their level in 2002 (from a total global figure of $414 billion). Among all developing regions worldwide, the East Asia and Pacific region continues to be the largest recipient of migrant remittances. According to statistics published by SWIFT in 2009, banks accounted for between 10% to 30% of this low margin but high volume global business that is worth an estimated $16 billion a year in revenues. Bank market share so far has been gained by focusing predominantly on account-to-account or cash-to-account remittances. Options for banks delivering remittance services have traditionally included building a proprietary network, building a bilateral service with a correspondent, or using open correspondent banking arrangements. But these are costly to maintain and scale. But new models are emerging, often involving partnerships. For example, banks targeting customers on the send side might partner with an MTO that has a wide network of agencies for unbanked recipients to accept cash at the other end. This type of partnership gives the bank extra reach and also the opportunity to win new accounts or provide other card or e-money services to potential customers in the recipient country. The relationship works the other way too, for example with Moneygram using its relationship with United Bank in Egypt to expand its network there. Another approach banks are taking is to turn to other banks or SWIFT for the back-end technology to cost effectively provide cross-border remittance services. SWIFT launched its Workers Remittances framework last year. The idea was to provide market practices, message types and architecture for interbank authorisation clearing and settlement of remittances, without restricting choice of settlement providers or currency, and not replacing any existing bilateral arrangements. The platform has a two-tier model for federating small financial institutions and retail networks. UnionBank of the Philippines provides some insight on why it went with the SWIFT solution in the June edition of Banks on SWIFT. Big players such as China's ICBC , Spain's La Caixa and Citibank are also using it. Standard Chartered has taken a different approach with its recent launch of an online remittance service targeting the non-resident Indian (NRI) community in USA, UK, UAE, Singapore, Hong Kong and Bahrain. For all markets except the US it is working with payment service provider TimesofMoney for processing and compliance. For the US market it is working with Bank of New York Mellon to provide an Automated Clearing House (ACH) based remittance service. Bank of New York Mellon is also providing its RemitWorldwide product to other banks such as Vietinbank in Vietnam. It eRemit website allows customers in the US to transfer money from any US account direct to any Vietnamese deposit or credit ATM account, or for cash pick-up at the bank's branches in major Vietnamese cities and towns. The use of online channel is interesting. Chris Skinner at the Financial Services Club blog says that one of the main reasons banks don't get involved in migrant remittances is that they don't want "smelly" labourers and service workers hanging around their branches. This is probably true at some banks, though they would be reluctant to admit it in public. Others are being more active in pursuing the market. For example in the US, Wells Fargo now offers remittance services to 15 countries in Asia and Latin America through its branches in various migrant-dominated neighbourhoods and communities across the country. It even tripled its Philippines payout locations and expanded its remittance network in Mexico. But what is true on the send side, at least, is that banks want to encourage particular segments of the migrant workforce (those that are legitimate and don't get paid in cash) to open accounts and self-service their remittances via online channels. There's been a lot of talk about the potential for mobile cross-border remittances, and possible collaboration between banks and telcos. As far as I can tell, for all the hype no banks have partnered with telcos specifically for cross border remittances. Though for domestic-oriented bank/telco tie-ups Japan's Jibun Bank , the recent announcement from Safaricom (M-PESA) and Equity Bank , and Nedbank/Vodacom in South Africa are interesting models, which show that the banks do add something to the equation that the telcos can't necessarily achieve by themselves. The MTOs, however, are seeing the value in partnering with telcos for cross-border remittances. Both Moneygram and Western Union have targeted the US-Philippines remittance corridor through partnerships with SMART Telecom. Western Union is also working with Globe Telecom in that country which has more than one million users of its G-CASH mobile wallet. It is also working with Maxis in Malaysia - enabling Philippine workers there to initiate a mobile send that credits a recipient's mobile wallet in the Philippines. Both MTOs have also struck up various other partnerships with other mobile software and services providers. Where banks have got involved in the mobile cross-border remittance market, it seems to be in partnership with the MTOs, piggybacking off their work in the mobile space. The State Bank of India deal with Western Union and the National Bank of Abu Dhabi partnership with Moneygram are good examples of this, and I expect we will see more arrangements like this in the near future. /blog/2011/august/who-has-the-best-prospects-in-the-cross-border-remittance-markets/ /blog/2011/august/who-has-the-best-prospects-in-the-cross-border-remittance-markets/ Wed, 24 Aug 2011 11:17:00 +0000 thefutureofbanking.org team /blog/2011/august/how-do-2011-banking-predictions-stand-up/ At the end of 2010, a number of industry players set down some of their predictions for the industry in 2011. We look back at the pick of the bunch and see how they got on. Many of the more interesting visions concerned potential technological developments and how IT innovation would continue to push the industry forward.   http://blogs.gartner.com/avivah-litan/2010/12/15/2011-threats-and-trends/ More Zeus like attacks - where sessions are hijacked. PC device identification and credentials stolen and copied so where criminals assume PC ownership PC fingerprinting or tagging on its own will be circumvented. Read more Transform and Transcend: Top Wholesale Banking Priorities for 2011 - Aite Group U.S. banks will increase their spending on wholesale banking initiatives Approximately 4% to 5% increases in 2011 in order to meet customer expectations Read more Retail Banking & Delivery Channels: Top 10 Technology Initiatives for 2011 - Tower Group Decreased fee revenue streams means banks are making very difficult product decisions Revenue needs to be generated for previously free checking products without frustrating customers. Read more And now for something completely different… Some 2011 predictions were more fanciful but certainly no less interesting. Apple Buys Facebook - Saxo Bank This was among Saxo Bank's Top 10 outrageous predictions for 2011. In theory, the gigantic 500+ million Facebook user base could be integrated across Apple's consumer products and services. Although unlikely, there's still time for this one to happen and it's worth reading for the implications it would have on the development of a powerful force in mobile and micro payments. Read more /blog/2011/august/how-do-2011-banking-predictions-stand-up/ /blog/2011/august/how-do-2011-banking-predictions-stand-up/ Thu, 18 Aug 2011 11:14:00 +0000 thefutureofbanking.org team /blog/2011/august/looking-to-the-future-what-are-the-credit-card-trends-for-2011/ 2011 has been an eventful year for consumer payments. With so much business potential in this space, it's hardly surprising that banks are looking innovate this service and add as much value in order to differentiate themselves in this space. If you've had trouble staying on top of all the developments, here are a few examples of important progess this year and the trends that are driving this business. First of all, credit card transaction volume growth is still an important factor, but it varies from country to country. On the one hand, growth in countries such as South Korea is still strong and competitive marketing from issuers over the past few years has seen the average member of the South Korean workforce now holding 4.6 credit cards. In other Western countries, credit card issuance and transaction volume growth has slowed, as the economy promotes a more budget-conscious approach to spending - driving up debit card usage. At the same time, legislation in these countries is impacting the bank-consumer relationship. In the UK, for example, changes in 2011 will make credit card terms fairer for customers , but will have an impact on issuer profitability. Security and identity theft are as high on the agenda as ever, and scheme operators continue to look for new innovations to improve consumer and issuer protection. The latest from Visa is an upgrade to fraud detection software. While many countries around the world have begun the move away from magstripe cards completely with the rollout of EMV-standard chips on cards, the US is still lagging behind in plans for adoption. Innovation here focuses on making the mag stripe itself safer, while potentially helping customers cram fewer cards into their wallets. A programmable credit card , with 5 keys and onboard electronics inside the regular sized plastic card, for example, was a big hit at the Consumer Electronics Show (CES) in Las Vegas. /blog/2011/august/looking-to-the-future-what-are-the-credit-card-trends-for-2011/ /blog/2011/august/looking-to-the-future-what-are-the-credit-card-trends-for-2011/ Mon, 15 Aug 2011 11:09:00 +0000