21 December 2014

Aden Davies

Aden Davies - HSBC

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Why aren't banks part of the web?

07 June 2012  |  4852 views  |  3

*SOUND THE NAVEL GAZING ALARM* While writing my last post on PFMs I was struck by how certain ideas and themes recur in my writing and thinking. I am starting to get the feeling I am burdened by these ideas. My brilliance is being hampered by these synapse occupying visions of majesty so much so that my humility has been diminished. Self mockery aside the real reason they are a burden is due to the lack of progress I have made with turning them from ideas stuck in my head to anything resembling reality. I wrote about the problem with ideas stuck in my head last year and one of the ideas I will talk about in this post is one of the ones I refferred to. In that post I said I wanted to protect the idea:

[I] feel a need to evangelise this idea and to ensure it is not crushed by the design by committee types or overlooked as just a feature that can be dropped.

It of course got killed. For this and other reasons I have decided it is time for me to publish these oh so burdensome ideas. Be rid of these foul demons in the vain hope that someone agrees they are good ideas and has some sort of vision of how to make them reality. These ideas are of various ages and I think this list is probably in oldest first order.

 

Identity - Clearly this is a huge topic and I am interested in all facets of identity but the bothersome idea I have harboured for several years is why can't I logon to my bank website? Yes I can log on to Internet Banking but that is different. For most banks the website is a completely different entity to its online banking portal. If I want to save a quote, view the terms of my insurance policy and potentially view my balances I should not need full strength security and validation. All quite subjective with regards to how secure different types of interaction should be but access to some forms of interactions need to be simpler (it could be argued that it's the customers choice as to what level of security they desire). Also you have the whole personalisation angle (only show me adverts for relevant products, paint the site black if I am a certain grade of customer etc) to this but I am not so interested in that.

Some banks operate other logons on their websites or external parts of their site such as the logon for HSBC's Advance offers or the first direct lab. I suspect interactions here are not well linked to customer profiles or CRM systems because of these logon issues. They also require yet another user ID and password which everyone loves.

What about non-customers visiting a banks site? Why not have a level of registration/identity to allow people to research products, begin applications and then once they take out a product you can upgrade the logon to a level that allows more secure transactions? Don't make me fully authenticate for everything and don't leave tracking to cookies and chance for everything else.

Clearly identity is a much bigger thing but I don't want to get into all that NSTIC / Digital Asset Grid type stuff just yet or even the connection of social network identities or the thought of Klout scores linked to product offerings (shudder). I just want basic federated logons for bank websites and any 3rd party sites the bank operates.

 

Notification Systems - I have written quite a detailed post on this idea a while back. The bottom line is that in banking today there are many types of events that occur but very few of those events are subject to any form of tailored notification to me as a customer especially if they are not financial transactions. If a specific transaction arrives in my account can I be notified via SMS? If my account balance drops below a certain limit can I get a DM on Twitter? If I miss a call from my RM can I be notified via email? If my mortgage application progresses to the next milestone can I get a message sent to my Internet Fridge? If someone tries to logon from a country or using a device that is not mine can you alert me via every channel available? (why don't banks have an audit trail that the user can see showing their logon activity ala Gmail?) Today the notifications available to customers are fairly limited. Maybe some basic SMS or some notifications inside a mobile app. The tailoring of them is also limited. No creation of rules or choice of multiple notification channels.

Not only does this limit the amount of feedback loops a bank creates it means the banks miss an opportunity to engage with customers. This thing has happened with your product...you should take some action (and hopefully see this advert for new stuff).

Over and above this though is that these notifications and these events that have occurred are fuel for other services both inside and outside the bank. Imagine if your bank had systems that played together nicely in ways you could manage. Imagine if you had the equivalent of If This Then That for your bank(s). The events and notifications are ripe for bringing your bank activities into your digital world rather than keeping them all locked away in an internet banking portal.

 

Activity Streams - (This is kind of the one referred to earlier that got killed off) Basically these are a well known form of viewing data and capturing specific forms of interaction. The Facebook newsfeed is probably the most well known form of activity stream. A flowing river of events that have occurred in your network. Why isn't your bank relationship represented like that? Today it is split by account, then drill down into a list of transactions. That view is of course important but it shows little of the actual interactions. Why not have an activity stream of all actions across all products and services? For example why not show entries such as;

  • You called today and we have done the following things
  • You left a comment on the first direct lab
  • You have won a prize for being our bestest customer
  • We have replied to your complaint about your prize (See our response)
  • We tried to cold call you but you ignored our call
  • You have been chosen for a fantastic new marketing promotion
  • etc

These would be interspersed with the far more frequent and familiar account transactions but it shows you everything that happens across your relationship with your bank. This representation may also change the way you present transactions as more data could be added such as geolocation, images of cheques, call recordings, 3rd party offers etc

Activity Streams are also a blossoming open standard.  You can post events in the activity stream format and then build a stream of those events across any service. If all banking relationship notifications/events mentioned in section two were formatted into activity streams it would allow those events to be brought together more simply in a single place, easing front end integration but also should you so desire allow you to share them outside your bank. This presentation by one of the contributors to the Activity Streams standard, Chris Messina of Google, explains them brilliantly. What if banks extended the standard from it's current social network definition? A bank contributing to open standards? Crazy talk...

Again this idea is about linking things together. Bringing events from a multitude of systems into one stream. It is also about enabling the linkage of bank events into wider world of web services.

 

Open Data & Application Programming Interfaces -  This is my current brain occupier. The one thing I would like banks to embrace the most. I have written about these things many times both inside and outside of the organisation I work for but like Robin S said 'words are so easy to say'.  I wrote about them herehere and here.  Basically what I want to see is banks surface APIs for core functions. An API for my transactions that I could plug into other services ala Freeagent, An API for payments so a developer could code an app to send money to people ala PayPal X Commerce etc. The very smart James Governor said a while back that he believed API creation and management will be a core skill of the successful enterprises of the future. He is right. We are starting to see a bit of a groundswell around financial services APIs, albeit mainly from new entrants. That will change soon hopefully as the banks wake up to the potential of bridging the gap between the bank network and the web.

Open Data is very similar in that instead of publishing services it is about publishing things that have happened. Banks should have some cracking data sets that could be shared for the benefit of others. Not least the hackers and tinkers and visualisers etc. If the World Bank can do it (and do it well) why can't some of the other banks of the world do it?

 

Conclusion of sorts - The main themes here are related to some sort of connective tissue of banking and the web. You can tell I am not a TOGAF certified architect with those kinds of descriptions. I am always disappointed when something can't be connected to something else for what ever crappy reason 'It was too expensive to build it like that' 'IT Security wouldn't let us' 'It was planned for phase 2' 'Open standards are a legal minefield so we write better ones' 'What the hell are you on about tubby?! Only activity stream you need is to go swimming' etc

I understand these things are potentially major infrastructural changes and there is also an unhealthy dose of mindset changes required as well. Both these things notoriously complex, challenging and expensive. I have no mind for business models or numbers related to these kinds of things so could not put a price on such a thing.  I suspect they will cost a fortune to build but will they deliver the savings needed to justify them? Will they allow innovation and creativity to flourish in the way my Utopian visions say they will. Who knows? I believe they will but who will believe me without Return On Investment numbers and other dull figures of justification?

My failings (of which there are many) are that I don't really know how to make things/make things happen (this could be a whole new navel gazing post). I know how to do whiny blog posts and sarcastic presentations and that ain't working so well for these kinds of ideas (I am being  flippant but I really don't know how to start these things). Obviously a problem shared is a problem halved so this is my attempt at that.

Be Gone. Maybe it is time to drown the puppy. Arrogantly accept the fact my ideas are clearly far too ahead of their time/not in anyway realistic. Move on. Seek out new ideas in new areas far away from these and rid myself of this (not very heavy) burden. This is the first step towards that...publish away my problems. I will of course be right back to them the moment anyone shows the merest flicker of interest because I suspect the only real way to rid myself of this burden is to see these things, or better solutions, implemented.

TagsOnline bankingRetail banking

Comments: (5)

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 08 June, 2012, 18:45

Maybe my nomadic lifestyle has exposed me to many more banks than the average person, but across 6-7 banks that I've banked with in the last few years, I've found around 50% of the items in your wish list, albeit on a single channel:

  1. Notifications. SMS Alerts for all forms of card use - credit card at POS, debit card at ATM, and so on - have become mandatory for all banks in India since 2011. More in my Finextra post "How Banks Can Differentiate By Going The Extra Mile - Part 1".
  2. Activity Streams. Although restricted to Internet Banking, Citi UK has a good summary of everything that happened during that session.

While many people attribute the lack of a 360 degree customer view and the absence of seamless multichannel interactions to different silos in banks, I think the root cause of these problems lies elsewhere. To reduce operating costs, many banking activities are outsourced to different vendors. Due to security restrictions, the outsourcers are not provided fully fledged access to multiple internal systems managing these activities. Until this changes - and I suspect that it never will for a long time - I doubt if notifications and activity streams about multiple products can ever be provided over multiple channels.

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A Finextra member | 11 June, 2012, 13:55

New to FinTech so not sure but I believe that Barclays has an API for transactions that plug into FreeAgent...

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Aden Davies - HSBC - Sheffield | 13 June, 2012, 15:01

Kashif, I would love to know more about that API!

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Aden Davies - HSBC - Sheffield | 13 June, 2012, 15:04

 Ketharaman, I know some of these things exist in fragments at other banks and that is a good thing. I think I am intereested in them becoming standard features with open standards backing them up. I like your point about outsourced vendors providing elements and these being locked out of the ecosystem...proves the need for those open APIs and federated identities even more.

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Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 13 June, 2012, 17:22

Although a technology marketer, I recognize that not all technologies successfully overcome the often-conflicting priorities between cost reduction, revenue enhancement and improved customer service. HSBC India's experiement with Cheque Deposit System is a good example of a technology that (arguably) helped the bank cut costs but became a major pain area for customers. Thankfully, the bank has finally realized this and has de-commissioned all its CDSs.

This example just reinforces the need for banks to choose their technologies carefully so that they can optimize their alignment with business objectives. On this count, I'm not very gung-ho about 'open API' and such technologies: We all know how banks earn more fees and increase stickiness by being 'closed' and 'proprietary'. While the technology is very appealing, 'open' and 'API' seem to be the exact antithesis of the business model that has worked so well for banks all along and made them 'too big to fail'. Maybe some nonbank will come and disrupt the scene but I won't bet on that happening anytime soon. 

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job title Social Technologies Specialist
location Sheffield
member since 2012
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I work in the technology innovation team at HSBC. My role is focused on the research of new technologies and trends and how they can apply to banking or the internal organisation. My primary area of i...

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