Posts Tagged ‘Apple’

It’s up to banks to disrupt the disruptors

March 10, 2015

Being ‘omnipresent’ and making the most of different channels means banks can yet fend off Amazon and Apple in financial services

 There’s a pervasive fear that a number of new “disruptors” are going to Balkanise the financial services market in coming years, eating into banks’ traditional revenue and profit sources.

The second annual survey of retail banks, released 10th March 2015, conducted by The Economist Intelligence Unit (EIU), on behalf of Temenos, might reinforce that sentiment. It found that 35% of the 200-plus senior bankers surveyed thought new entrants and competitors would have a major effect on the market in the next five years. That figure rose to 52% in North America.

Over one third believed that the biggest threat would come from tech and e-commerce giants like Apple and Amazon. They are disruptors by nature and experts at exploiting customer data and extracting additional retail dollars.

The newcomers, with deep pockets and the best IT platforms and skills, will certainly want to nibble at certain profitable dishes. But banks should be confident that they can remain at the head of the table if they respond in a smart and measured way, making the most of their inherent strength in data and forging new strategies for different channels.

The survey forecasts that the disruptors will grab market share from current accounts (24%), deposits (14%) and savings lines (25%). Electronic wallets and foreign exchange and remittances are merely the start. Of course, we’ve already seen that happening with Amazon Payments, Apple Pay, Google Wallet, PayPal, Samsung Wallet and so on.

The advantage for the likes of Apple is that their customer data is already refined, meaning they know client preferences and can target relevant offers. Most Apple users have long abandoned fears of surrendering data in exchange for convenient service and quality products.

Facebook is also well placed to take advantage of its huge potential customer base, already corralled inside its ecosystem and likely to stay there for the free services that are put to daily use.

The disruptors might next consider targeting the “underbanked” market. This refers broadly to those digitally savvy consumers who have less trust of traditional financial institutions and a view of banking that differs greatly from their predecessors. They are young now, but will be tomorrow’s financial decision makers.

Already, the “underbanked” conduct some of their financial transactions outside the mainstream banking system. According to one KPMG study from a few years back the “underserved” segment represented more than 88 million individuals and nearly $1.3 trillion in wages in the United States.

It’s important though not to overstate the overall trend. We’ve seen a number of false dawns before, for example mobile banking was apparently poised to dominate the market around the turn of millennium.

To be clear, banks retain inherent strengths. Clearly, the tech newcomers don’t have the local networks, the spending and savings data, the Basel-compliant capital buffers or the regulatory structures to wholeheartedly enter the universe of universal banks.

And banks are still in a great position to respond digitally. In the US, about 90% of retail banking transactions now occur online or via mobile. Banks can easily get to know their customers better by mining this data.

To do that, they will need to become omni-present and place themselves where the consumer is online, while also developing channels, allowing them to track customers better and communicate with them in a timely and relevant way. The banks can leverage their data via personal financial management and create new data-driven services like digital passports, digital vaults and digital wallets.

The survey showed that some banks are starting to think this way. For example, BNP Paribas Fortis, KBC, ING and Belfius have set up Belgian Mobile Wallet, operating as Sixdots. Wells Fargo and Standard Bank have created their own labs to test new technology and apps. And the Spanish bank BBVA acquired the Big Data firm Madiva and the digital bank Simple.

Or take ICICI Bank in India, which has launched Pockets, an app-based digital wallet which, on installation, generates a virtual Visa card that can be used for payments with numerous online merchants. Pockets also offers the option of a physical card.

The next step would be for banks to better use the data, for example by deploying real-time, tailored marketing or guidance that offers the right product at the right time, whether that’s services, products or financial advice.

In the future there are likely to be two main types of banks: those that provide core banking transactions will compete on scale and cost and be happy for others to manage and own customer relationships; others will focus on customer relationships – they differentiate themselves via experience and intimacy with new uses of data and online channels, moving away from the previous model of interaction via branches and call centres.

The end of Apple?

February 2, 2012

We are clearly in the web age an era that has turned everyone into readers and publishers of free content. In this era we have seen the rise of open source, free software and the move to software and services freely available in the cloud.

Yet in the “free age”, Apple maintain a huge client base locked into its proprietary and closed hardware, operating systems and stores. When Steve Jobs returned to Apple, even the great Bill Gates proclaimed that the world had changed, and that Apple would not survive with Steve Jobs maintaining the company’s control over platforms from end to end.

Despite this Apple is a huge success. Is it likely to last?

As a techie, I’d hope not, because we do want to be able to upgrade our hardware, we want the option to use any suppliers’ parts and we want the same to be true of our software. Do we care what the hardware looks like as long as it’s fast and powerful, not really.

However as a consumer, too much choice is not necessarily a good thing. As a consumer, we are in a world where things get replaced rather than fixed or upgraded. For the majority style is every bit if not more important than features, and customer experience does matter.

How quickly and easily I can use my device has become more important than whether it has all the latest and best features. Going back to one store is easier than have to search several for apps and music.

Apple started with some engineering innovation, and when Steve Jobs was first ousted focused heavily on engineering; this was its downfall in the late eighties. However with the return of Steve Jobs, and his partnership with Jonathon Ives, a return to a focus on customer experience and design revived the ailing technology company.

So although it pains me to see Apple thrive in such a closed environment they really do highlight that style, ease of use and the overall customer experience really does matter to consumers. Hence I would not forecast the end of Apple for some time in the near future unless it loses its way again to “engineering”.

How safe is your mobile app?

February 9, 2011

2010 was, for many organisations, the year of the app. Executives across all sectors rolled out apps to provide a new channel for customer interaction. 

For many businesses, the aim has been to enhance relationships and engage clients. More and more customers have smart phones, powerful internet-enabled devices that allow users to work and play online from the palm of the hand. However as we move into a world of more devices and even more apps my concern is that are users and business acting responsibly when it comes to security?

There is quite a bit of “User Naivety”. How many mobile users set a strong password lock on their mobile phone, if they set one at all? This knowing that some apps and sites “stay logged in”, giving any user with access to the phone access to the app ! Not so bad for angry birds maybe, but what about mobile banking !

Then, when downloading apps it is surprising how freely access is given to phone functions to a vendor of an app that the user has never heard of or checked their reliability. For example many users do not realise that an app can access any phone function or data on the handset. It is very feasible to write an app that goes through your phonebook and sends email addresses to spammers, or one that automatically sends expensive premium rate texts in the middle of the night !

This kind of user naivety is similar to users on desktop PC accessing a supposedly secure site without checking SSL Certificates.

What about simple things like other people looking over your shoulder? What about if you lose your phone? What about when your ever-smarter phone becomes your electronic wallet? The security implications are huge !

Scare mongary? Well (see further reading) many USA banks have already see breaches in their mobile apps !

Some of the same fears can be repeated in the corporate arena. Do you really want people logging into native apps while they’re on the move? What if devices go missing? Could corporate firewalls be compromised?

Whilst some app stores provide some basic checks none of this can necessarily be relied upon, and it is only time before we hear of more regularly of mobile security breaches and virus’s.

Whilst solving the cross platform mobile apps issue, the impending move towards HTML5 based apps could see even further challenges as the web itself becomes an endless appstore of it’s own.

The app has been the web-based sensation of the last 12 months. But we have a long way to go before native apps and in the future mobile web apps can be considered a secure means to access confidential information. And for the enterprise environment, that day could be a long way off.

Further Reading

http://goingcellular.com/mobile-applications/citibank-discovers-security-breach-in-iphone-app-443045/

http://www.digitaltrends.com/mobile/major-mobile-banking-app-security-holes-uncovered/

http://www.drdobbs.com/security/226500191;jsessionid=IE0BUOZ53VALLQE1GHRSKHWATMY32JVN

Apple vs Adobe: Round two could herald the knockout blow

October 18, 2010

Seconds out, round one! Once the best of friends, technology giants Apple and Adobe have more recently been involved in a fistfight that would do the heavyweight boxing division proud.

 In the red corner, Apple – an experienced but innovative slugger that is now worth more in market capital terms than software behemoth Microsoft. From the desktop to the pocket, Apple has become the consumer – and increasingly, enterprise – product of choice.

 In the blue corner, Adobe – another innovative firm, famed for its multimedia software and rich internet application development tools, such as Flash. And it is the last area that has caused consternation with Apple.

 At times, the heavyweight battle can look more like a schoolyard scrap. In a recent note (see further reading, below), Apple chief executive Steve Jobs made much of the former pals’ friendship.

 “Apple has a long relationship with Adobe. In fact, we met Adobe’s founders when they were in their proverbial garage. Apple was their first big customer,” starts Jobs’ open letter, before taking a swipe at Adobe’s technical troubles.

 Jobs suggests Flash is poorly designed, has security concerns and is ill equipped for the mobile age (see further reading). Apple banned Flash from its iPhone in 2007 and its iPad in 2010, restricting the use of the third party tool for developers.

 For its part, Adobe has issued a staunch defence, concentrating on the inherent openness and innovation of the internet. Adobe co-founders Chuck Geschke and John Warnock suggest that Apple’s restrictionscould undermine this next chapter of the web” (see further reading).

 Which is a big claim, but are they right? Flash is undoubtedly a popular web development mechanism. However, its attractiveness will undoubtedly be affected by Apple’s decision to restrict the use of Flash, especially as the iPhone and iPad are the devices of the moment.

 There are, of course, other web development platform options. Jobs’ letter refers to open standards, such as CSS and JavaScript. He draws particular attention to HTML5, which he says is the new web standard, a standard that means web developers do not have to rely on third party plug-ins.

 Currently under-development, HTML5 already boats some big backers and impressive features, such as drag-and-drop and – most crucially, in terms of the ongoing status of Adobe Flash – video playback.

 Round two of the fight is only just beginning but the combined power of Apple allied to the inevitable success of HTML5 could land a knock out blow on Flash.

Further reading

 http://www.apple.com/hotnews/thoughts-on-flash/

 http://www.networkworld.com/news/2010/060710-tech-argument-apple-adobe.html

 http://www.adobe.com/choice/openmarkets.html


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