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So, this does highlight The Clear And Present Danger With NFC Payments that I was concerned about:(

Nice post. I especially liked your distinction between customer and consumer. You also hit the nail on the head when you say that all the nice digital revolutions must happen within the framework of being a bank. While some banks want to be like IT companies, reality is, whatever IT they use and however they use IT, they're still banks and use IT as enabler of their banking business. 

BACS breaks the record on one week and breaks a bank on another!

https://www.finextra.com/news/announcement.aspx?pressreleaseid=60713

Totally agree. Having worked in the IT industry for 25+ years, I'll pull out all my money from banks and put them under my mattress if banks started working like software companies. More in my comments at https://www.finextra.com/blogs/fullblog.aspx?blogid=7831

@DavidG:

I couldn't agree with you more:

As I'd highlighted in Why Banks Can't Transform Legacy Applications - Part 2, bank C-Suite members, who run the most profitable industry in the world, get cheesed off when revenue-challenged, loss-making, VC-funded fintech upstarts preach to them about how to cut costs by transforming legacy!

Applying the wrong patch, failure to test the new release - operational and environmental factors like these that have led to most UK bank system failures. They could happen equally well with open systems as with mainframes.

After I wrote Calling B.S On Banking The Unbanked, the GoI launched a program to issue zero balance bank accounts through an abbreviated process. While the program succeeded in opening 100M+ new accounts, over 70% had no money in them. The GoI then launched life and health insurance plans with cut rate premiums that had to be direct-debited from the bank accounts, thereby hoping that people would keep at least that much money in their accounts. Now we're hearing that payments banks would promote financial inclusion. Plan after plan with no end in sight, I sometimes wonder if we should spend more time and energy to find ways ways to achieve the more important goal of putting enough money in the hands of the supposedly-unbanked segments of the population.

@DavidG:

You've made a brilliant point about how open CBS platforms are themselves not modern. Having worked for a vendor of one such platform, their average age is 20+ years.

Now that you've brought this up, I'm reminded of how the CIO of a leading bank recently lamented that even the mindset of executives in their open CBS vendor was tending towards legacy, with no sensitivity to agile development, time to market considerations in a crowded market, and so on. The bank wanted to build an instant account opening extension on top of the Online Banking module of their open CBS. The vendor took one month to come up the estimate, which was for $M / 6 months, which totally defeated the purpose of a functionality that had competitive advantage only for a couple of months.

The bank did something similar to what you've recommended, namely, contract with a third-party digital-first web development agency, launch the first version of the instant account opening portal in 30 days.

Some degree of vested interest can't be ruled out but this does largely resonate with the findings given in a recent BBC article. Most specifically:

• Cash in circulation is growing at 7% per year, which is indeed roughly twice the growth in economy;
• MPESA is actually used to send cash from sender to receiver, so proliferation of mobile money services absolutely does not mean fall in cash use. 

Seems like a true veteran, why the 'veteran' qualification?

Well, the last time Coop stopped asking "Why" and moved forward with legacy transformation, it almost went bust: "...calamitous IT re-platforming project that contributed to a £300 million write-off and left the bank on the brink of collapse." 

https://www.finextra.com/news/fullstory.aspx?newsitemid=26019

Unfortunately, Coop is damned if it transforms legacy and damned if it doesn't transform legacy. Its plight is more reflective of the way in which attempted to get out of legacy earlier and the way in which it is now attempting to stay with legacy, rather than legacy itself.

On a side note, I just came across a McKinsey article which prescribes two different ways of doing legacy transformation. Maybe the "two-speed" approach will suit most banks in developed nations and the "greenfield" approach will work better in emerging markets.

http://www.mckinsey.com/Insights/Business_Technology/Two_ways_to_modernize_IT_systems_for_the_digital_era