Over at NetBanker, Ron's wrote about the notion of PFM (Personal Financial Manager, eg Quicken) and that will not be the solution to bringing the last holdouts into online banking.  In particular, he spoke of the older generation boomers, and others who if they have not adopted such tools, are unlikely to do so now.

 In any event, the post prompted me to reflect on what will be the evolving role of online banking.  Generational shifts will be highly important here, both to increase online banking to saturation, whatever level that is, but also to understand what the role of online banking will play in determing customer loyalties.

 Gen X/Y/M have grown up with internet, mobiles, and computers.  But this is less to do with technology, than it is about social change.  Internet & mobiles have brought much change to communication, interaction, and information.

The generation shift has at its base a different expectation for user experience.  No, I am not speaking of web design, although that comes later.  First, we have to understand that the Bank site is not the centre of the persons universe, any more than the news site, the photo sharing site, the instant message app, or their social network. 

 FaceBook is just one great example of the next iteration of that environment.  FaceBook is a web application platform, and what that is beginning to mean, after only three months in place, is that anyone can develop applications within the platform, and people can see those applications with their own profile, either on the web or on their mobile.  This part will give headaches to the security folks, but picture online banking within FaceBook, with alerts, bill payment reminders, mortgage renewal reminders, with a click here to renew!  Relevant prompts defined by the customer within their choice of internet experience.

 The expectation of people will be that they can arrange their information as they see fit.  An oft over-used expression in banking is customer centric.  Banks cannot be customer centric.  The only place customer cenric can exist is how it is defined by the customer, and I only use FaceBook as an example of the customer centric concept. 

 The next point is peoples expectations of organisations, including Banks.  Trust in organisations is being redefined as exhibited within the annual Edelman trust survey.  When we lay lack of trust in old brands alongside the customer centric concept, you quickly arrive at a "build your own bank" scenario.  What does that mean?

Here are some examples from a recent post on my other blog:

_________________________________ 

I am always looking for dots to connect, and disaggregated financial services is a connection theme I see more clearly now. Recently Jason pointed out the disruptive influence of the CapitalOne debit card, and lights went on. Here are examples we can see today:

1. disaggregated debit card (Ex CapitalOne)
2. disaggregated bill payment (Ex Billeo)
3. disaggregated loans (Ex Prosper, Zopa, VirginFinance/CircleLending, LendingClub)
4. Advice (Ex Wesabe)
5. Consumer power (Ex Wesabe)
6. disaggregated payments/ money transfers (Ex Paypal)
7. online application platform (Ex FaceBook)
8. brand advocacy (Ex FaceBook)
   

___________________________________

These dots portend a future where individuals can take the pieces they want and aggregate them as they see fit, within their world. In such a world it is not necessary to get them all from one bank, nor even from any Bank, when we see new models like Wesabe, and Prosper.  They are financial and social;  two characteristics that were never expected to be operating together, but that genie has now left the bottle.  Both Wesabe, and Prosper have shown there is a way to use personal data, combined with strong security, and preferences management, to provide advisory and transactional assistance at a level and scale that one bank can never achieve, one employee at a time.  

 Banks will need to understand the future better, and re-define their strategy in terms of leading these changes, or retaining their old models, and trusting in them.  We are at an interesting point in the evolution of financial services.