The Future of Banking - still on track?

This is 2 years old now - is it still relevant? Or just fantasy?

Hear the bells-a-ringing

The unstoppable wave of change is reaching some critical milestones - According to AC Nielsen and the Internet Advertising Bureau, March 2008 was the first time Australians spent more time on the net than watching TV. Online is fast becoming the biggest media investment (accuracy and ROI are questionable) for many companies - search, display, targeted. The days when people were watching TV with the laptop on their laps are here to stay, with the TV even being turned off. I know I do, given the way free to air treats us. Even pay tv will suffer when internet tv begins to deliver global content in any order, format, volume we want.

Microsoft, somehow, tells us how to be human in the year 2020

'Computer technologies are not neutral – they are laden with human, cultural and social values. We need to define a new agenda for human-computer interaction in the 21st century – one that anticipates and shapes the impact of technology rather than simply reacts to it.' Download this interesting presentation here.

The Future of Work

Wave goodbye to the nine to five, and say hello to virtual enterprise, says the Guardian:

"Jo Causon from the Chartered Management Institute on its study on the future of work
Within a decade millions of workers will be at home juggling their careers with caring for children and older relatives, Britain's leading management institute forecast yesterday.

Dreams of a future when technological advances would liberate us from the daily drudge and allow more time for leisure appear to be fading, with futurologists predicting less talk about "work-life balance" and more about "work-life integration".

A report on the nature of employment in 2018 predicts an exodus from the traditional workplace caused partly by environmental pressure to reduce the carbon footprint of commuting and partly by the demographic pressure of an ageing population, with fewer employees able to avoid looking after older relatives, leading to a blurring of boundaries between family and career."

Article continues...

Ciscos next phase of the internet

John Chambers from Cisco talks about the Future of the Internet as part of a Davos video project.

BST shows us the Future of Retail Banking

BST have this interesting microsite with videos and whitepapers - The Future of Retail Banking. Sponsored by IBM, it includes:

• Innovation in banking
• Optimizing business processes
• Core systems transformation
• Globalisation in the banking sector
• Delivering the customer experience

Internet Banking - Scene of last decade and some learnings

Great stuff from Shripad at Finextra - a reflection on internet banking from past and future:

"In the present regime of 2007 and beyond, the banks are concentrating on targeting the incremental service-level in online banking value-chain e.g. developing creative ways of countering security threats, targeting comprehensive supply chain management for entire life cycle of a transaction utilizing straight through processing (STP) , customizing the social network in wbe2.0 including offering more control to the user , aligning internet banking with multiple channels to offer the best-in-breed technological upgrades to the customer including Electronic Fund Transfer (EFT) / bulk transfers using RTGS, mobile banking services, incorporating GIS, imaging, workflow etc.

...

Banks are targeting Internet banking as a medium to generate new business and attracting either offline or fresh customer through effective ways of cross-selling, establishing cross border services for various corporate as well as consumer segment. Internet Banking is also been used as a channel to create profile driven marketing campaign for various banking products."

Extract from bank findings

• Internet is one of most cost effective channel of conducting banking operations. It is estimated that Internet banking offers up to minimum of 60% (and much more at higher volumes) cost saving over normal offline banking. But this numbers keep changing esp in of SOA, Multi-channel integration, web 2.0 environments.
• Bankers across the world have realized that customer using online banking have lesser attrition in comparison to other channel of banking and offer a relatively loyal customer to the bank. But can they take this for granted, as new online financial service community (esp non-banks) is posing strong threats?
• Per product usage per customer for Internet Banking channel is growing exponentially comparing offline banking. But can this become a norm? Can they improve on this numbers as a lot needs to be done yet? Is profile driven campaigning used to it's best? Banks have to yet mature to provide with complete life cycle offerings in true sense.
• As per Gartner, on an average, companies save about 45 cents every time they send an account statement electronically instead of by paper mail. A bank that sends monthly account statements by paper mail to 5 million customers would spend $27 million more than if it sent electronic statements. (So much less wood saved for countering global warming.)
• Many banks have started waiving or reducing transaction fees on Internet banking accounts and have been for long, offering higher deposit rates to attract this cost-effective channel of banking transaction.
• Branch managers (esp of traditional / old banks) across the globe have realized that Internet Banking offers is not a hindrance or competition to their business growth, but it complements the operations as it actually reduces the excessive burden of servicing customers.
• Banks are offering customized reporting aligning with tools e.g. "Quicken 2007 or Microsoft money" etc for customers to analyze their income, expenditure items in various heads and this helps individual families to study / budget their spending from e-banking statements. But bankers need to watch as to how many percent actually use this flashy customized gadgets or are they spending money at wrong places.

Go and have a read

Future in Focus

Telstra's Now We Are Talking site has a sub section called Future in Focus. Some examples of the reading available:

Sol Trujillo on the future
Telstra CEO Sol Trujillo shares his vision for the future of telecommunications in Australia.

Future devices, security technology and the home
Chief Technology Officer Hugh Bradlow shares his thoughts on the future of technology, and how this will affect our home lives.

2012: What's hot, What's not
We've taken a shallow dive into the opalescent waters of the futurist's crystal ball, and have come up with some predictions for WHAT's HOT and WHAT's NOT in 2012.

World expert pinpoints key internet trends
Distinguished world internet researcher and commentator, Dr Jeffrey Cole shares his insights.

Broadband to transform healthcare delivery in 2012
Telstra’s community business partnership with onTrac@ PeterMac is set to revolutionise how sick people are treated in rural and regional Australia in the future.

Catalysts for Change – Setting the Growth Agenda for 2015

From FST Media:

"The theme for this roundtable is innovation and the way in which innovation will transform the Australian banking environment by 2015. Participants include representatives from all major banks and the technology community.

...

There are important shifts occurring in the market as new entrants, new technologies and new channels come to the market. The competitive landscape is becoming more and more challenging. There is a new level of transparency being demanded today. Consumers and corporate clients are better informed; they are better able to compare offers and they shift their business more freely than before. As a result, we find in our dialogue with our banking customers that everyone is feeling incredible pressure to innovate at a faster and faster rate. This is especially true in this ANZ market where the majors are largely dependent upon systems that are now more than 20 years old and where the skills needed to maintain them are in ever scarcer supply."

Great article continues...

The strategy battle in banking

CXO has this interesting article on banking in 2015 (source: IBM). Extract below:

"A decade from now, mergers and acquisitions will likely have reduced the total number of banks, especially mid-size banks; industry specialists and non-bank financial institutions will play a more prominent role. Global names will be present but success will not come easily as they compete with established local players having strong distribution networks, in many cases more flexible technology platforms and a much superior understanding of local cultural needs. Exceptions will be banks such as HSBC, Citicorp and some regional players such as Kookmin Bank and the Development Bank of Singapore. Most of today’s players will be vying to differentiate themselves in a crowded marketplace. However, traditional approaches to creating value through growth and efficiency will no longer be enough. Advantages gained through acquisition, new market entry and reconfigured product offerings will be fleeting at best, while partnering and outsourcing will make efficiency a basic requirement for all.

Customers redefine the rules of the game

Pronounced shifts in income levels, use of technology and advanced search and benchmarking tools, attitudes and behaviours, in addition to ubiquitous information, are giving customers the power to demand much greater responsiveness and transparency from their banks. This together with growing inequalities in wealth, cultural differences and a fragmented market will require very different strategies and cost structures in order for banks to develop loyal customers and grow profitably. The low per capita income levels for the majority of the population will require low price points for all products and services over the next several years. In addition it will not be uncommon to see new delivery strategies being tested to serve the unique needs of this region – low cost ATMs which can work without air conditioning, co-existence of banks and auto dealers under the same roof, micro financing in concert with the village “sarpanch” (leader) using a shared franchise and risk model, together with a direct sales model geared towards supporting remote villages lacking connectivity to the main commercial hubs."

All 150 TED talks in one link

Here they are - have fun wasting your work day on these.

Communications & devices converging, says Gates

In his latest executive email, Bill Gates has some interesting comments on the variety of devices and the movement towards a single identity or number, (remember we discussed eNums):

"A fundamental reason that communicating is still so complex is the fact that the way we communicate is still bound by devices. In the office, we use a work phone with one number. Then we ask people to call us back on a mobile device using another number when we are on the go, or reach us on our home phone with yet another number. And we have different identities and passwords for our work and home email accounts, and for instant messaging.

This will change in the very near future. As more and more of our communications and entertainment is transmitted over the Internet thanks to email, instant messaging, video conferencing, and the emergence of Voice over Internet Protocol (VoIP), Internet Protocol Television (IPTV), and other protocols, a new wave of software-driven innovations will eliminate the boundaries between the various modes of communications we use throughout the day. Soon, you'll have a single identity that spans all of the ways people can reach you, and you'll be able to move a conversation seamlessly between voice, text, and video and from one device to another as your location and information sharing needs change. You'll also have more control over how you can be reached and by whom: when you are busy, the software on the device at hand will know whether you can be interrupted, based on what you are doing and who is trying to reach you.

....

It would be hard to overstate the magnitude of the changes that are coming. Standardized, software-powered communications technologies will be the catalyst for the convergence of voice, video, text, applications, information, and transactions, making it possible to create a seamless communications continuum that extends across people’s work and home lives. This will provide the foundation for new products, services, and capabilities that will change the world in profound and often unexpected ways."

Read the whole email here.

Have a look at this page on the Micosoft site too - Unified Communications. Bill gives a webcast on the topic there.

Web communities on the rise and going mobile

According to Juniper Research, the number of users of mobile chat and dating services is expected to rise from just over 40 million in 2007 to 260 million in 2012, with revenues expected to exceed $1 billion in 2010.

Email is becoming so passé

From TheNews.com.au:

"Email is becoming so passé. With tens of millions of members, social networks like MySpace and Facebook can wield great influence over the communication of a new generation living online.

We’ve heard some email doomsaying before - given the rise of instant messaging, the annoyance of spam, VoIP and Skype and Text messaging - but it’s hung on in the home and office for necessity’s sake.

Email isn’t the major internet communication anymore, but it won’t disappear either. It will maintain a professional utility, even if it surrenders ground to competition like social networks – the most potent new rival to email.

But when Facebook’s founder Mark Zuckerberg turned down Yahoo’s recent purchase offer of $1 billion, he did it for a reason. He intends to change the way we use the internet; Facebook’s recent acquisition of Parakey may mean that there’s no need to visit websites at all. "

Article Continues ...

They go on to talk about Parakey and Xobni (inbox backwards... hmmm).

FST chats to Australias retail banking leaders

FST have again produced an interesting discussion, this time tapping into all the leaders of Australia's retail bank divisions.

Present were .. take a deep breath ... Seated: Westpac’s Group Executive, Business Services, Peter Hanlon; Accenture’s Global Banking Industry Managing Director, Noel Gordon; CBA’s Executive General Manager, Retail Products, Michael Cant. Standing (left to right): NAB’s Executive General Manager, Retail Banking, Andrew Thorburn; ANZ’s Managing Director, Retail Banking, Louis Hawke; CBA’s Group Executive, Premium Business Services, Stuart Grimshaw; Accenture’s Australia Financial Services Managing Director, Greg Carroll; Westpac’s Group Executive Consumer Financial Services, Mike Pratt; ANZ’s Managing Director Business Banking (NSW) Anthony Healy; Accenture’s Asia Pacifi c Banking Industry Managing Director, Pascal Gautheron;St George’s General Manager, Product Management Group, George Beatty.

Too many highlights to list, have a look and good read.

Great BankWatch links

From Colin at TheBankWatch.com:

How to Web 2.0 your Bank
Building the Bank of the Future - 2
Building the Bank of the Future - 1
Branchless Banks worldwide
Can a branchless bank work?

TrendWatching.com's 2008 Trend Report is ready to order

The new annual report (to be released on 28 September 2007), will get you access to more than two dozen trends that matter next year. From HAPPYNOMICS and ECO-EMBEDDED to ACCE$$ and STORY SUPPLIERS.

The future according to Nokia

A 20 minute video of a presentation given by Timo Veikkola, Future Strategist at Nokia, on a Vision of our Future. Given at the PSFK conference in London.

Recent BarCampBank outcomes

From Netbanker:

"Recent BarCampBank in Seattle attracted close to 40 people - credit unions, banking experts, consultants and suppliers across the US and Canada. It was unfortunate that there was no representation from actual banks.

The topics discussed included the use of social media, credit relief for third world countries, branching strategy, expectations of Gen Y and Millennials, mobile banking, and open source core processors. Over the weekend, as discussions opened and progressed, the ideas were distilled down to a few core themes:

• Banks and credit unions don't really know what it means to be customer-centric
• The disintermediation that the industry has been seeing on the horizon for years seems to be occurring, and financial institutions had better get on board or lose market share
• Is social media (blogs, social networks, wikis) an effective way to market and promote banks?
• What would a bank look like if one was built from scratch today?"

Article continues

By 2012, today's teens will rule

From The Age:

"WHO is Citizen 2.0? More powerful and influential than generation X or Y, harder for business and government to reach and a spearhead for workplace change, Citizen 2.0 is already subverting established business practice and will be a major force by 2012.

Citizen 2.0 is today's teenager, born in a connected world, accustomed to rapid change and possessing unique information-age skills. Citizen 2.0 will challenge any organisation selling products, services or ideas in the future.

To understand Citizen 2.0 is to embrace the concept of extended identity, an identity that transcends usual limitations of location, age and upbringing. Teenagers again provide the clue through their interest in using and being recognised for their blogs, gaming avatars, online friends and photos. This is not a recreation. It is an extension of who they are and establishes them as members of dozens of tribes and subcultures transcending many old barriers and norms.

We will not reach this new citizen through traditional methods of communication. Consider the filters we have in place to ignore the marketing information we do not want, and then consider the filtering power of a 21-year-old in 2012.

The smart money is banking that "market of one" approaches, targeting individual preferences, and pull-based marketing, in which consumers "opt-in" to receive content, will cut through."

Article continues.

Reminds me of this. Dick from Sxip.com delivers a compelling and dynamic introduction on Identity 2.0 and how the concept of digital identity is evolving. Even though this is 2 years old, its is one of the best presentations you'll see.