Magnus on Banking Technology

Books and Magazines February 12, 2009

Some banks have tried adding cafés to their branches. Personally, I think they would be better served adding a library, bookshop or magazine stand. This would stock such titles relevant to the financial consumer; The Wall Street Journal, The Economist, and books about personal finance and investments. There’s always a risk that the material might contain information that could prompt the customer to go to a competitor, but isn’t that a risk worth taking to appear to the customer as someone who is genuinely interested in his financial education?

What would you like to see on your local branch’s bookshelf?

Bank Switching January 30, 2009

Opening an account with another financial institution is easy. Most marketing messages always stress the ease of establishing a new relationship, however we all know that the biggest hurdle in switching is leaving the current bank. I am myself in the process of leaving one bank in favour of another. The switch was mainly prompted by a service far below par. Luckily, it was never my primary banking services provider. I am just imagining what steps would be required if I were to switch my main bank. I will list a few:

1) Getting my salary deposited to the new account.
2) Update all my automatic GIRO payments and standing instructions.
3) Learn the location of the new bank’s ATMs.

Ideally, I would just walk in to the new bank, give them my particulars of the former bank, sign a letter of authorization to perform the switch and walk out a happier man. In some geographies I understand that there are efforts in place to provide ‘account number portability’. This is mainly driven by governments, not by the banks themselves. I guess that all banks fear that by making it easier to switch TO their bank, they are inviting their competitors to make it easier to switch FROM them. Maybe there is a place for 3rd party providers to make switching easier?

Financial Product Visualisation January 16, 2009

One major problem with financial products is that they are non-tangible. You can’t touch a saving account, listen to a mortgage or smell a credit card (Ok, technically, you could). Of course, you can always read the product sheets, but that’s just not the same feeling. Imagine only reading the product specs of a sports car, say a Ferrari. By just reading it, you wouldn’t be able to distinguish it in any major way from a medium sized family car. You really have to experience it first hand. Let’s face it, we will never be able to sit in a current account and take it for a spin. That doesn’t prevent the necessity to provide at least a decent level of visualisation. I imagine that the best solution would be for an FSI (or a group of FSIs) to define some standard to visualize such products. This would take the shape of graphs, charts, shapes, colour coding and what else.

I am already savouring the day when someone will come up with a way to represent financial products in 3D format! Just imagine going in to a bank and actually being able to see, touch and turn your next mortgage, rather than just having the customer relationship officer reading from a brochure!

Does anyone have any experience with ‘visualised’ financial products?

Location Aware Devices & Services (LADS) January 13, 2009

It is quite amazing that in a day and age of GPS devices and vastly distributed contact points with our FSIs, we’re not being provided with information that is relevant to our geographical location. Banks have already made investments in tracking where we are in time, as in life stage products, but space is not yet quite part of that equation. The only example that I have is when my bank detected that I started making credit card payments in a country I had never visited before. The best thing they came up to do was to block my card to my major embarassement (In all honesty, they did try to contact me, but I had changed to a local SIM card and was not easily reachable through my usual phone number).

There a couple of ways that a bank could serve me geographically relevant information:

1) At an ATM, I could be given the location of nearby ATMs.
2) Assume I withdraw money at 6-7PM at an ATM located in a well known area with plenty of restaurants. I could be given directions to the one that has special offers for the Credit Card that I hold (or that the bank might want me to have). My bank usually provides me with a brochure once a month with such offers, but I never, NEVER, carry it with me when it is relevant.
3) More advanced services could be provided if I had an application on my GPS enabled smartphone that I had opted in to, which could guide me to places where I could spend. After all, the more money moves around, the happier the banks will be.

A major concern is privacy. A person’s location is a very private piece of information. In what circumstances are we as consumers happy to share our location with our bank? For such scenarios where we have deliberately made use of a financial service (ATM, branch, or maybe credit card payment), the acceptance might be easier than an ‘always on’ GPS tracking of my every movement.

What other location aware services can you envision for the FSIs?

Relevant links:

Apisphere,  a provider of location-smart services for mobile business applications.

2009 NAVTEQ Global LBS Challenge,  a  global program that challenges application developers around the world to build innovative location-based services.

Generally, it seems as if there are plenty of sites discussing the technological viability of location aware services mainly descsribing what might work on certain types of devices, as compared to enterprise wide business case solutions and the value it could provide to businesses and consumers.

Update 14th Jan 2009

Apparently some people take the privacy issues rather seriously. See the US PIRG blog (PIRG = Public Interest Research Groups).

Introduction December 31, 2008

This is the first post of this blog. I will explain the reasons for starting this blog as well as giving a rough idea as to what it will be all about.

About a year ago, I created an account over at Bloglines and started subscribing to a few feeds. Ever since then, I have been adding lots of feeds as well as removing a few. See the blogroll for the ones I follow that are related to the subject of this blog. As I consumed more and more information, I realized that I was not satisfied only to be a reader. Slowly, I started adding comments to other blogs. Unfortunately, all my comments were scattered all across the Internet and I had no way of keeping on top of the discussions that I was involved in. Finally, I decided that the best way for me to keep organized was to collect all my input in one place, this blog.

Of course, I get a lot of input from other sources other than feeds; interactions with customers and colleagues, analyst reports, books and professional websites. Such input will also be covered here.

As with all blogs, even this one will start in a certain direction. Over time it is likely to adapt its course based on the accumulation of experience. I look forward to comments from the readership to help develop the ideas brought forward here.

Welcome to the journey!

Magnus