Back to the future for Banking

January 2, 2017

Having been involved with delivering internet banking solutions since 1997 I recently looked back on some of the research I was reading at the time and also some of the presentations I was giving at conferences and to Banks. What I found is that many of today’s trends were identified early on in the era of e-commerce.

McKinsey’s wrote a paper in 1997, titled “A Revolution in Interaction”1. It proclaimed “An upheaval of equal proportions is about to be triggered by unprecedented changes in the economics of interactions”.  They described interaction as “the searching, co-ordinating, and monitoring that all people and firms do when they exchange goods, services or ideas”. Given when this paper was written it is certainly worth a read, as it provides a really good analysis of how business changes as interaction moves online. Whilst some banks have achieved an omni-channel approach to self-service banking, the majority of these still lack the ability to exploit interactions for sales, advice and loyalty in an efficient and effective way.

The McKinsey paper also mentions the concept of “mass personalisation” but this was six years after Don Pepper and Martha Rogers wrote “The One to One Future”2. This book created a step change in marketing thinking and was very applicable to Internet businesses years later, however much of this would still be revolutionary in banking even today. Banking products are virtual so are ideal to be priced and or configured to the individual customer. Some modern core banking solutions now provide this, whereas it would be rare for a legacy banking system to support this flexibility.

The Economist wrote a piece titled “The Rise of the Infomediary” 2 back in June 1999. It wrote about three very different companies that exploited the Internet with a business model whereby they sat between buyers and sellers and mediated the exchange of value. One of these was an auction business, Adauction, very similar to ebay (launched in 1995). These were the very early examples of what we would now recognise as platform businesses, a big trend again in the last few years because of the successes from the likes of AirBnB and Uber.

In 1998, I gave a presentation to the British Computer Society on the future of banking, highlighting a few trends. One of these was about data, “Data is the new currency” it was about how data could be more valuable to banks than the currency they managed. In 2006, Clive Humby of Tesco Clubcard, talked about “Data is the new oil”, he gave a great analogy how refined data (oil) was worth much more than the actual data itself. Yet today many banks still underuse the data they have, let alone, fully “refine” it to extract its best value.

In 1991 I worked for Lloyds Bank where I was involved in creating the vision for Single Customer View. It took many years and a huge amount of investment before the bank realised its vision, but this is paying huge dividends now. I’m sure many of you have similar stories and I would love to hear about them in the comments.

So, if you are currently reading about trends for 2017 or what the future of banking will be, I say “go back in time to understand” the future. Happy New Year everyone!


The Future of UX in Banking

December 29, 2016

Virtual reality, voice recognition, artificial intelligence, augmented reality: these are the technologies that are set to change the way we interact with each other and in business. They are the way of the future, a future not that far away.  They will have a huge impact and are already making their mark.


This is especially true in financial services where they promise to make the user experience richer, more efficient, more effective and more convenient. Barclays recently introduced voice recognition software for phone customers, cutting out the need for multiple security questions and passwords. Meanwhile, Santander has an app that allows customers to voice questions about their transaction history rather than have to search manually for the data. The result is speedy access that can’t be matched in branch.

Finding the right use for the technology is all it takes. You probably aren’t going to want to be told your account balance in front of your children or parents, for example. But voice control is ideal when banking blends into the background of everyday life – buying lunch, booking theatre, train or bus tickets, or paying bills.

Not sure if it’s your mother’s birthday next week? Ask your phone to check your diary, get the date, find a local florist, choose some flowers, look up her address, check your balance to see if you can afford them, pay for them, get a receipt, know they’ve been sent, get your new balance. All by talking to your phone.

There are already hundreds of thousands of developers working to plug in new voice driven services to make our lives easier, and many will have a financial or banking element. Banks are also on the case. At least 10 around the world have launched chatbot services in the past three months alone as adoption moves from the early to the fast follower stage. Mass market will depend on how quickly the analytics mature to make the interactions truly smart.

The successful ones will be those that add value to the users – the customers, us. This means banks need to make sure they are looking beyond banking. It’s about the role they will play in the background. Successful banks will enhance their services and role by pushing analytics further and become data generators rather than data capturers, and from this they will provide value-added services.

When banks collect and analyse data they can do so much more. Combined with artificial intelligence, and augmented and virtually reality, banks will be able to help customers manage their money so much better.

I love the idea of a VR meeting where a customer’s total assets and commitments can be clearly set out. Advisers can come in to offer suggestions about making the income and assets sweat, according to the customer’s risk appetite. Does it make sense to release some equity in a house to invest in a higher yielding product? Would buying a cheaper insurance policy with a higher excess rate make more sense as the customer’s claims are historically low? Not only would the bank be offering advice, the connections and inter-relationships between it and third parties mean it would be able to affect any changes. The more data across the population a bank has, the smarter the system can be, the better the advice it will be able to give.

Perhaps the most exciting prospect in all this is augmented reality. Shopping, you pick up an item and the screen you’re wearing gives you availability, reviews, the best deal, and compares alternatives. You can access finance, order, and pay. It’s not just going to be glasses that can do this; Google Lens is already patent-applied; VR systems will get there; car windscreens; school whiteboards. This is going to be really powerful from a user perspective.

Together these technological advances have all been termed the Fourth Industrial Revolution. It has arrived and its impact is being felt. The banking sector might think it has a choice. It really doesn’t. Their customers have seen the future and are demanding it today.

Solving The Legacy System Problem For Big Banks – Is There A Solution?

December 15, 2016

Despite the considerable risk involved in removing legacy systems, not all big banks are hesitant to attempt to combat the problem, including NAB. Yet NAB’s implementation of a new core banking platform has been accused as the reason for the multiple online and mobile systems failures the bank has encountered this month. Though NAB are actively attempting to rid their system of the cumbersome legacy issues, the process of the change has presented new difficulties that are likely to affect the trust customers have in the bank, and their quality of service. Similar incidents seem likely to increase for banks with large systems requiring a complex overhaul, due to the size, scope and timescale of this change. The reputational damage system failure can incur works in the favourite of smaller fintechs and incumbent banks, who are unlikely to suffer such outages due to operating on far more reliable architecture. With the risk of upgrading been proven by such incidents, the notoriously cautious established big banks may become even less likely to consider addressing their core system issues, limiting the extent to which they can take advantage of digital products and transaction increases.

Yet system failures are far from exclusive to banks attempting to combat the issue, with big banks RBS and HSBC facing similar technical difficulties this year due to the weakness and strain on their legacy systems. Both types of system failures, whether from upgrading or refusal to upgrade, are likely to impact customer loyalty, particularly that of Millennials who are content to change their bank more frequently than older generations. Paired with the increasing competition in the market from digital banks free from the limitations of legacy systems and able to innovate in-line with the changing customer demands, the immense difficulty faced by banks “too big to scale” could lead to a declining customer base and inability to offer competitive products.

Big banks’ architecture is already struggling under the pressure of changing banking habits, and the growing preference for digital options renders change imperative. Yet the risk involved for banks of such scale is of considerable consequence, but waiting too long to upgrade will only aggravate the problem. Big Banks appear to be facing a Catch-22 – upgrade as soon as they can in order to remain competitive and encounter issues like that of NAB, or allow caution to win out and not attempt to rectify their scaling issue until it becomes impossible to ignore, by which point they may have fallen too far behind competitors for upgrading to be of use. For either option, both face the threat of not having enough time to overhaul their system to compete with new digital banks, falling too far behind to catch up.

Clearly, scalability has far reaching consequences and is crucial to a bank’s continued success in an increasingly digital world, where technology is advancing faster than ever before. The multitude of possibilities new innovation brings create new problems for large banks; where size was once an advantage it is now an obstacle. Being “too big to scale” is as great a threat to a bank’s survival as new competitors saturate the market, and the inability to scale could severely alter the banking landscape.

Will Industry Progress and Innovation Be The Downfall Of Big Banks?

December 8, 2016

While changes in payments trends from consumers are placing increasing strain upon large, traditional bank systems, they aren’t the only force altering transaction and data volumes. The European PSD2 regulation requires banks to adhere to standardised changes intended to improve the industry, bringing significant, unavoidable adjustments to an industry infamous for being stationary and resistant to change. The PSD2’s focus on the role of AISP’s and PISP’s will drive both interaction and transaction as well as competition, and the direct connection between banks and retailers through use of APIs will lead to innovation and new opportunities. Banks are beginning to realise the use of APIs affords a chance to create a larger ecosystem of value for their customers, with some venturing to offer innovative third party apps through their own marketplace. This concept is already underway in BBVA’s API market, and is likely to become a popular means of adding value for customers, as well as boosting transactions and interactions. The implementations of PSD2 requirements provides banks with an excellent opportunity to innovate and differentiate themselves from competitors; a particularly vital opportunity for bigger banks threatened by digital competitors offering speed and ease-of-access they cannot match. When also considering the influx of new banks entering the market, with 30 new banking licences in process, leveraging the opportunities the PSD2 offers could be essential to survival, but there are concerns surrounding big banks’ ability to do so. Large, rigid legacy systems may hinder traditional banks from taking advantage of these opportunities, while digital and smaller scale banks with more flexible systems facing less risk have the infrastructure to cope with these changes, able to leverage them to offer a superior service.

Banking differentiation is not solely limited to opportunities created outside the bank, but is also stemming from within the bank through increasing service functionality, with offerings in personal finance management. Offering tools to help customers remain mindful of their budgets and goals boosts bank transactions as the bank becomes a more valuable source of knowledge for the customer. Similarly, Neo Banks are going one step further with offerings including expense tracking and invoice issuing, also adding to volume of interactions. While Neo Banks are unlikely to find this boost in interactions problematic, operating on newer, simpler systems designed for a digital future, traditional big banks are of such a scale that further strain on cumbersome, siloed infrastructure could prevent them from offering products to compete with smaller competitors, thus giving innovative newcomers an advantage.

Evidently, the ever-increasing volume of transactions, the growing preference for digital channels, the changes brought about by PSD2 and the infinite possibilities of IoT will all place considerable strain on the architecture of big banks, relying on systems implemented decades earlier and unable to keep up with the pace of changing customer needs. Many banks considered to be “too big” continue to operate on aging legacy systems, plagued with data silo issues and pulling time and resources away from investment in new technology able to operate in this new digital landscape. Despite awareness that these systems are hindering banks’ potential and growth, with 86% of banks citing legacy technology data silos as their biggest internal challenge[1], the risk, time and scope of implementing a new core system for such large banks is a serious concern. However, the ease with which influential technology companies such as Google are able to scale due to their single data view origins, growing from 10,000 search queries per day in its infancy to the colossal 3.5 billion per day it handles today[2], is reflected in the ability of digital fintechs banks to expand with minimal issues, due to being data-focused and unaffected by the limitations of siloed systems. As a result, the ongoing struggle encountered by traditional banks to make use of their data and effectively manage the growing scale of data and transactions, is an unavoidable problem in a market gaining a steady influx of younger, more agile competitors, firmly focused on the changing direction of banking needs and processes. Banks that are “too big to scale” will inevitably lose out to fintechs and incumbent competitors able to offer a service more aligned with the requirements of today’s, and tomorrow’s, customer.



Are Banks too big to scale? Who’s to blame?

December 1, 2016

The ever-increasing size of traditional, long-standing banks has been a fascinating point of discussion for many years now, with the possible problems arising from banks being “too big” having far reaching consequences. The financial crisis heightened the pressure for regulators to be more stringent on capital adequacy, but high profile government bail outs prompted many to question whether “too big to fail” banks should remain so large and influential. While the financial crisis is no longer at the forefront of our minds, the global digital revolution is seemingly impacting every aspect of banking, with no signs of slowing down. While digital banks and fintechs are well equipped to face the challenges the impact of digital preferences and advances will have on the industry, larger traditional banks seem to face a multitude of struggles. With the unprecedented growth of digital interactions and transactions, this blog series looks at whether the new and emerging demands on banks’ legacy systems will mean they are too big to scale?

Transaction growth in the last year alone has been monumental, seeing a 10% rise in 2015[1]. Payments methods are becoming overwhelmingly mobile as the use of cash is dropping, with the volume of mobile payments via a smartphone, tablet or wearable growing by 300% a year[2]. 34% more customers have made use of mobile payments in the last year[3], showing a clear shift to digital and the self-service options it provides. Transaction growth is also being heavily impacted by the popularity of pay-as-you-go subscription services such as Netflix and Spotify, instead of occasional, individual purchases of media. The rise in digital services, able to reduce their business costs, such as Uber not owning any vehicles themselves, creates opportunity to offer a cheaper service, encouraging repeat transactions and resulting in a greater volume of payments and rides. Both the change in channels and vast transaction volume puts pressure on large, aging bank systems, while smaller, younger, digital banks with more flexible systems are not impeded as heavily.

The changing payments habits of consumers will be further altered with the ease of access automated Internet of Things (IoT) technology will create. As far back as 2008, there were more objects connected to the internet than people[4], and a not-so-distant future where devices including refrigerators and washing machines be connected to the internet is fast approaching. Already, washing machines can hold enough washing powder for multiple washes and are able to detect when quantities are running low, but it won’t be long before they’ll be able to automatically re-order the powder themselves. The potential in payments services using this technology is limitless, as every bank customer could have dozens of devices linked to their bank account, with frequent automated transactions able to occur. The use of IoT will also generate huge volumes of data, stored by banks and able to offer insights into customer intentions. Smaller and digital-oriented banks should be well-equipped to offer IoT services and benefit from the data it will collate, but the scale, cost and maintenance of IoT banking processes raises questions over whether big banks will be able to make the best use of it. Many may not have the architecture to facilitate this communication of devices, as their limiting data silo issues prevent communication of current data. Though some banks are considering the application of IoT to banking, such as U.S Bank’s Innovation Lab project involving cars able to order items to repair themselves, this is not common practice for traditional banks, and it’s likely those that aren’t able to make use of IoT opportunities will become obsolete.

[1] ttp://




The Internet of Me: Connected People

June 8, 2016

This is the 4th and final blog in the series ‘Bank of Things’

Connected people is really about the rebirth of “Personal area networks” (PAN), the concept that multiple devices on/with a person connect up in a private network to that person. Today this is as simple as your phone syncing with a smart watches. In the future this could be many other devices that are part of your jewellery, clothes or even embedded in your skin.

While Google have patented a contact lens for reporting glucose levels, Samsung have patents for them to project content directly to your retina, replacing the need to wear Google Glasses. Sony launched Xperia Ear as a device more like a personal assistant that you can interact with rather than listen whilst Nuheara is launching a device that improves your hearing experience.

Motorola launched a smart tattoo that can be used to unlock your phone though the technology has a much wider possibilities and again payments is an obvious one. A report from The World Economic Forum however forecasts that smart chip implants could be commonplace by 2023. This may be in a number of ways from simple chips for identity and payments to health devices like cochlear implants or heart pacers. The report also identifies the advancement of Brown University’s research into connecting technology directly to the brain to enable mind control of devices.

The development of mind control and improvements in speech recognition could lead to apps moving towards a Zero-UI, a user experience that does not necessarily involve a screen image. Although Emerge Interactive have created a screen that can be embedded into the skin! The demo shows how an app can control tattoo’s which can even be animated or used to display running stats.

Google’s project Ara is a modular phone that allows you to upgrade parts of the phone like the camera or battery so that you don’t need to replace the whole phone to upgrade. Taking this concept further perhaps the PAN could mean that eventually you only need one GPS, one camera, one battery etc. each wirelessly communicating to other devices like your phone, car stereo, watch?

From a banking perspective identity can truly be multi-factor combining both biometrics and a physical device/chip either on or in you. And again this enables payments to be made without have to use a card.

However with access to the broad range of sensors attached to devices in your PAN, banks will have access to ever richer data to understand more about your lifestyle. As an infomediary banks have the possibility to provide much more relevant and targeted offers, advice and rewards. Banks will need to extend their omni-channel capability to utilise these sensors not only to respond to real time events created by these sensors but to capture the data they provide.

With increased information it’s clear that products like insurance will change dramatically, personalised to individuals lifestyles. As I highlighted at the start of this series the Internet of Things is only limited by imagination and a huge amount of innovation has already been brought to market, too much to cover in any blog or even a book!

The key for banks is to look at opportunities to engage in creating compelling new customer experiences afforded by these devices and the data they will provide. As usual Banks will need to respect privacy and look at how they can provide a valuable service in return to the rich data that will help you to understand your customers better.

Students from 5years old upwards are already learning how to use the internet of things, and now is the time for Banks to define how they might engage customers in “The Bank of Things”

Banking and connected homes . .

May 31, 2016

Connected Homes

Post 3 of 4 of the series – The Bank of Things

Perhaps one of the most exciting areas of technology will be the connected home. Unlike connected cities the customer will be in control and be able to introduce smart devices of their choice.  

Nearly every room could have a wide array of connected devices. Clearly TV and sound might dominate the front room, but expect home to feature dedicated “vision” rooms where 3D projectors beam images to every wall and floor to fully immerse the viewer or gamer. 

For the bedroom, you can already buy a mattress that monitors and reports your sleep pattern and able to regulate temperature to optimise your sleep experience. Aside from mood lighting, light bulbs have become “multi-function” devices by doubling as speakers or WiFi extenders.  

In the bathroom expect to catch up on the news and other personal notifications in the bathroom mirror, whilst your connected toothbrush records your brushing habits and send alerts if it detects possible issues. Even the toilet will analyse content to assess your health. 

In the kitchen your fridge will manage your shopping possibly working with your bin so that items from cupboards can also be recorded. Cooking maybe a thing of the past as robotic arms take over that task unless of course you’d rather just have a 3D printed burger. Already you can buy kettles that are connected so you can use an app to ensure water is boiled before you get to the kitchen.

 Laundry rooms may get smarter with clothes identifying their washing instructions so you never have to choose a setting or risk choosing the wrong setting. It will even tell you if you mixed the wrong items. There are already socks that are connected and can tell you how often they have been worn and washed, hopefully they are the same number. However will we need to wash clothes? Will we instead simply recycle clothes and have new sets 3D printed? 3D printed clothes can be much smarter with LED lightening and smart materials that detect heat and adjust ventilation automatically.  

Most of the above has been demonstrated already and there is much more to come. But what does this mean from a banking perspective? Just like the Connected Car, the Connected Home too might have it’s own account that allows a detailed spend analysis for the home. Devices could be connected to the account for shopping or ordering recipes for the robot chef. 

Utilities could also be connected for payments but also for budgeting. So possibly a budget could be set for heating and a smart algorithm is used to manage the bills to that budget. The algorithm reduces / increases temperature not only to the weather outside but also to keep within a budget. In the UK utility companies hold £1.5bn in excess funds relating to overpaid prepayments, this could be eliminated with smart meters connected to accounts. 

Managing the home is a complex task and banks could play a role as an infomediary by managing switching between suppliers to get the best deal and provide a “single statement” for all bills. Whilst personal finance management provides spend analysis information, banks have the opportunity to provide a role that helps customers manage their expenses better. 

ASB in New Zealand is the only bank I’m aware to produce their own IOT device for the home, a smart digital savings box, Clever Kash. The device has an interactive screen and a companion app. The idea is as the child earns money their parents can flick cons from their phone to the savings box and the child can see the balance being updated. The bank provides this to help parents teach the child about money and saving. There is huge opportunity in the connected home for banks in the future but for now banks should prototype home banking experiences for this exciting future.


Banking on Connected Cars

May 18, 2016

Post 2 of 4 of the ‘Bank of Things’

The future is already here with self-driving cars and the race is on globally to full legislate for them to be acceptable. Dubai has set a target of 25% of vehicles to be driverless by 2030. This alone will have huge impact not only to laws, but insurance and jobs. It is easy to see that such automation will be a big factor in predictions that within 25years we could see unemployment reaching 50% in the USA! On a positive front, today 96% of car accidents are caused by human error. However even eliminating a large number of accidents has an impact on jobs in hospitals and for insurance companies.

The connected car is a great example of IOT, compute power + huge array of connected sensors + extensive data collection. Car designers have already moved their focus to car interiors as much as if not more on the exterior as they imagine spaces we can relax or work in. There are already car panels with built in sensors so that a knock or dent is detected and can be reported automatically. Cars may automatically report potholes. Smarter interaction will allow car’s to book themselves in for a service while you work. And manufacturers are already designing boots that can be used to accept parcels while your out – the courier notifies you of their arrival and you open the boot for the delivery or collection remotely via an app.

As cars will become much more interactive what role can Banks provide? Clearly they can allow the car to make payments to pay for tolls and charging (fuel) themselves. Banks could also look to provide accounts dedicated to the car so that a full picture, including servicing and insurance, can be ascertained on the cost of owning a car (personal finance management for car’s).

Some of us may choose never to own a car, and simply use Uber to order a self-driving car on demand. This will create the possibility of “car landlords” – people buying cars to earn money by driving others. Clearly this represents an opportunity for banks in terms of mortgage style loans for “fleets” of cars as an investment.

Last year Santander teamed up with CarZapp to provide car dealership’s the option of providing a car sharing scheme to their customers. Customers of the scheme can pick up and drop off cars as they please from participating dealerships using the App. It’s a very different customer experience than just providing a loan for the car. It enables customers the option of driving different cars rather than just owning one. The scheme was launched in Germany where Santander is already one of the largest car financers in the market. It’s this market share that allowed them to innovate the concept of car sharing using an App.

In Poland you don’t need to got o a branch if you’re a business banking customer, Idea bank has a bank that comes to you! Idea bank is expanding it’s fleet of car’s that have been customised with a built in secure deposit box and ATM. It is possible to order the car to come to you and currently it is driven to the customers location. However it’s easy to see that this is a great candidate for a bank on demand ordered via Uber.

Elsewhere in Canada, Blueshore, looked at connected cars in a very different way. They thought about the passengers and how they may utilise their time. Focusing on wealth management they looked at the possibility of new user interfaces designed specifically for windscreens so that a passenger can review their portfolio whilst being taken to their destination. This allows car journeys to be much more productive.

Initially it may be difficult to think of the role of connected cars in banking beyond payments, but as you can see Banks are not short of imagination already. What is for sure is that there is much more to come and now is the time for banking to think about customer experiences and the connected car.

Banking in Connected Cities – Post 1 of 4 of the ‘Banking of Things’ Series

May 11, 2016

Banking in Connected Cities

City planners, councillors, governments and architects have been considering the possibilities of connected cities for years now; it is only people outside of these professions that are surprised by how advanced the thinking is on this topic. The given aspect is ubiquitous WiFi, however this could be enabled in different ways for different purposes – see this article ‘Examining The Future of Wifi’.-  Each one providing a different reach, bandwidth and speed. These new types of WiFi will be necessary to connect everything in a city: from streetlights to parking meters and bus stops, as well as connected cars and people.

Connected cities features a large focus on transportation which I will cover in the next article. However, from an infrastructure perspective, we should expect that traffic in cities would flow much better as the city gathers more information, directly from vehicles but also from traffic lights, CCTV and even street lights, while processing it all in real-time.

Street lighting will go through a huge change. Initially this will be to use more energy efficient LED and solar powered lighting, but will progress to become smarter to detect people and traffic, so lights aren’t on unnecessarily. This could also be used to identify potential crime by becoming brighter or changing colour to highlight the danger, while alerting the law simultaneously.

Apart from the proliferation of charging points, clear glass solar panels aren’t a too distant future and could potentially make every building largely self-sufficient for power. With utilities, we expect monitors to automatically report leaks and outages. And while not strictly in the space of IoT, we expect cities to be much cleaner as litter is cleaned up by robots, and smarter CCTV will automatically fine those that drop litter.

Expect billboards and advertising to personalise content and special offers, by detecting who is nearby and within vision. The technology already exists to dynamically personalise video adverts so that merchandise labelling can be changed to match the target person’s preferences. We have barely scratched the surface of the possibilities that technology can bring to transform our cities.

From a banking perspective, we expect to see far fewer branches in the high street, and those that remain are likely to be very different to the traditional branches of the past; much more open, with fewer staff members and more self-service machines. Many could be consumed into being part of a very different customer experience. For example, while planning a wedding, the advisor is able to help you find loan to pay for your event and provide insurance in case anything goes wrong.

Expect to never have to reach into a purse or wallet to use cash or a credit card, as you’ll simply be recognised (either through an implanted chip, or through biometrics like facial recognition) and charged as you enter buildings (e.g. museums and cinemas), or leave a shop with merchandise.

Banks have already looked at presenting offers to customers as they walk past certain stores, but they could also use the same approach to provide advice on:

  • Spending: skip Starbucks as you already overspent there this month (Ally bank in the USA are already trialling this concept with an app called Splurge)
  • Healthcare: skip Pizza Hut as you’ve not exercised enough today
  • Saving: delay going into the city by an hour will save you money because current congestion has increased toll fees

Clearly a big area for banking will be the facilitation and control of payments in a smart city, but the bank also has the opportunity to be a trusted infomediary for the customer, not just in providing real offers, but also by providing advice and rewards to drive advocacy or retention.


The Dawn of the ‘Bank of Things’ – 4 Part Blog Series

May 11, 2016

The Dawn of the “Bank of Things”

Over the past ten years, I’ve seen analysts’ forecast of the number of devices connected to the internet grow from 2 billion to 50 billion. The reality is we simply don’t know and the ever-spiralling number is a sign of just how big the potential for this new technology is.  It seems it will soon be possible to connect anything and everything.

We already have a mattress cover that monitors your health; socks that tell you how many times they’ve been worn and washed; 3D printed clothes that adjust to temperature; and milk bottle tops that tell you if the milk has gone off. Meanwhile, toothbrushes, light bulbs, door handles and even pens, can all be connected and can all deliver new services as a result.

New types of information

A new era of connectivity has begun and with it comes a whole different level of “big data”, as these devices emit a constant flow of information.

Just as the number and variety of things connected to the internet continues to grow, so does the range of information coming from them. Sensors can provide data on location (GPS), movement (accelerometer), temperature, pressure and light, for example. And it quickly becomes apparent that the possibilities for this stream of information are limitless.

Interconnected “things”

What’s more, it doesn’t stop there as these connected “things” can also communicate with each other.  Imagine a washing machine that warns you that you’ve left your phone in the pocket of the jeans you just placed inside it to wash.   Or curtains that open when the alarm on your phone wakes you up in the morning (possibly a little later than usual because your phone has checked your diary for the day ahead and also detected you haven’t slept well during the night).

Again, the possibilities of what could result from devices that are able to talk to other devices are only limited by our imagination.

Children are already learning the basics of wiring up sensors and finding ways to use the information using kits such as Wunderbar, SAM and Kano to build their own gadgets. These are the skill sets of the future – electronics (circuits), APIs/scripting, and analytics (data).

The future of banking

The implications of this new connected world are only just starting to be felt. Every industry is in a state of transformation and none more so than banking.

Banks are thinking about how this new world of big data could potentially transform what they offer to customers and their relationship with them. This is what I call the “Bank of Things” and in this new world it is likely that banks will want to become the trusted:

  • Custodian of the customer’s data – helping them to manage privacy and control sharing
  • “Infomediary” – acting as an adviser between the customer and sellers
  • Payments manager for the customer’s “things”

A glimpse of what’s to come

We are on the cusp of a new technological dawn that will clearly bring huge changes for banks and banking. In this series of blogs I will be exploring this topic from a banking perspective and looking at what it means in terms of Connected Cities, Connected Cars, Connected Homes and Connected People.

Given the huge potential of the technology I recognise I’ll only be able to provide a glimpse of the possibilities, but I hope it gives you a taste of what’s to come and welcome any feedback you might have on other applications of the technology.