Community

Stephen,

Valid points. When I said we need to get used to different levels of privacy - I literally mean different levels. I don't think there is a one size fits all approach.

On the Y-Gen/Digital Natives question - I firmly believe this. Look at the issue of 'sexting' as an example of how their sensibilities in this respect are changing.

I guess you're leading to the issue of Identity theft. I think we have to come up with better ways of managing our critical identity than relying on privacy policy. Biometrics is one way, but so could be effective registers. The fact is, that relying on privacy policy or even educating consumers, is not going to be effective in the long run in protecting our online identity. 

We need to innovate privacy and identity management just like we are social media.

BK

Michael,

You might be right - the banks could be between a rock and a hard place. But I think organizational inertia is the main reason why banks are not innovative in respect to the customer experience.

What customers are looking for is easier ways to interact with their bank. Outmoded compliance processes, lengthy policy statements, poorly informed staff, and other such issues require innovation so that customers get a better deal. That's not about technology.

I actually believe that most banks are too big to innovate and as a result we'll see lots of 3rd parties like Square, PayPal, Facebook, and others come in over the next 10 years and capture the hearts and minds of customers. Banks will end up just being the back-end transaction hubs that enable those 3rd parties.

BK

Ketharaman,

I agree that there are third-party opportunities aplenty as a result of slow bank innovation. Despite what banks think they are not technology companies and they need to rely more and more on third-party relationships or they'll be too late to the party.

Brett King

This shows the fundamental problem with Bank marketing departments these days - they still think in terms of traditional ATL/BTL broadcast methods and don't understand that social media is not about managing brand perception so much as participating in the conversation.

John,

I'm not naive enough to think that this spells the end of traditional banking models, but I do believe that it will further hurt margins and profitability.

BK

Dean,

Read Chapter 1 of BANK 2.0 where I talk about the three phases of disruption to retail banking. Mobile represents two of those phase shifts and the third is what you are discussing here - payments modality.

The banks will become the wires - the phone the customer engagement device. Unless banks have their products, messages and service capabilities tied to mobility - they will lose out to software developers, handset manufacturers and others who understand customer interactions better.

BK

Chris,

Fair enough. I'll back your mini-browser play with one proviso - HTML 5 needs to be the underpinning tech - so it provides the required usability. The remaining issue is multiple size screens, different standards, differing network connectivity, etc.

Given the iPad's recent success, I'm not sure we're done with Apps just yet. Think also of the issue of extending user experience. Widgets, Applets, use of Avatars, etc - Cloud computing aside, these are all potential extensions on to the desktop, tablet-top, device-landscape.

The key is - improving customer interactions. At this point I just don't see banks invested in THAT.

BK

Chris,

Confusing yes? The fact is with Google making a play, the iPad's success, this space is getting more and more complex. Sitting back and waiting for a dominant platform or approach isn't going to work - there isn't going to be one. But customers will be mobile and expecting their bank to be there too.

This makes it difficult because actually what it means is that there is no one size fits all approach, and sitting back and waiting doesn't provide clarity. So banks need to be able to respond to the dominant platforms or approach in each market quite quickly to get the benefit of the initial momentum and learn from those interactions. This is tough if you are bankers and not software developers. So how do banks stay alive in such a challenging space?

The trick for banks is to open up development of these apps or m-portals to a developer community like Apple has with the iTunes platform. They can still control security, compliance and other such issues through clever core APIs and capability. The problem is to keep on top of consumer shifts, the typical bank approach of cautious investment slowly over 3-5 years simply won't cut it anymore. Customer behaviour is just changing too fast.

It's a tough world - but banks are going to have to live with it. If not, third-parties will start to come in and disenfranchise banks from customers because of their ability to create better engagements with the customer (e.g. PayPal, Square). In the end, I fear most banks will just end up being the 'wires' processing the back-end transactions, because they won't be able to innovate effectively enough to stay connected with their customer base who is increasingly more sophisticated in their utilization of tech and media.

Brett

HSBC should know better. There is no excuse for not having a range of iPhone applications already deployed.

Customers don't see a bank that is taking their time to get it right, they simply see a bank that doesn't have an iPhone app. Regardless of their workarounds, etc.

Banks today need to understand consumer behaviour is changing much more rapidly than they can innovate. Organizational intertia and branch-led thinking is the biggest hurdle in generating progressive change in customer experience. Banks either need to innovate the org strucutre so real innovation is enabled, or make a decision to be much more open to partnerships with developers, telcos, cloud platform providers, etc.

Putting a banker of 20 years experience in charge of customer innovation just won't work.

Brett King, Author - BANK 2.0

John,

I hear this all the time in respect to mobile. Let me give you two points to think about:

1. Are customers more or less likely to use mobile going forward - if more likely, then the longer you wait the more expensive implementation is likely to be, and the less customer satisfaction you will see, and

2. More importantly, you can't learn how to generate revenue from the platform if you aren't participating in the platform. This is about adjusting to consumer behavior and meeting needs, in order to get deeper relationships (read cross-sell/up-sell). 

Banks who are sitting back are likely to be penalized in this regard. ROI is there - BofA, Jibun, Shinshei, etc have all shown it works. Rhetoric from bankers at this stage of the game on lack or ROI,etc tends to show a gross underestimation of changing consumer behavior as regards future revenue of the retail bank.

BK