Posts Tagged ‘Google’

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.

AppInventor to drop out of school

February 3, 2011

Something odd is happening. While children have never been more involved in computing, fewer and fewer young people are studying technology.

 Any parent of young children will be able to regale you with tales of their offspring multitasking with various devices and apps. The modern, younger generation has grown up only knowing a technology-enabled world and they are a product of that interaction.

 However, that high level of interactivity has not created a rise in interest in the academic side of IT. Just 4,065 students were awarded computing A-levels this year, compared with 4,710 this time last year – a drop of 13.7% (see further reading, below).

 The jury is out on what such developments mean for the UK: while companies continue to offshore certain technology tasks, a core of highly-skilled technicians must exist in the UK. So, how can we get kids interested in the behind-the-scenes coding that supports their multi-tasking lifestyle?

 One possibility comes in the form of Google’s App Inventor, a system that claims to enable non-coders to develop Android software. Instead of writing code, interested individuals visually design the way an app looks and use blocks to specify software behaviour.

 The plus point, at least as far as getting junior programmers on board, is that App Inventor is easy to use. Code is simply snapped together to allow basic events to take place.

 That, however, is also part of the problem. As developers become more adept, the limitations of snapping blocks together – in comparison to being able to write code – become exposed.

 As Darien Graham-Smith concluded in a recent review of App Inventor for PC Pro (see further reading: “Anyone with the programming nous to make full use of App Inventor’s abilities will surely prefer a language that doesn’t force you to pedantically assemble every function, procedure and event out of multicoloured blocks.”

 Google acknowledges App Inventors’ educational route, paying deference to MIT’s Scratch project. But while the system is driven by an educational perspective, it remains restricted by its approach. In fact, Graham-Smith believes App Inventor could actually drive people away from programming unless the Blocks Editor improves.

 The system is, in short, a nice attempt to get people interested in the finer elements of programming. But successful apps are inherently much more complex than pushing Lego together.

Further reading:

 http://www.computerweekly.com/Articles/2010/08/19/242454/A-level-results-mark-39worrying-trend39-for-IT.htm

 http://www.pcpro.co.uk/blogs/2010/09/07/googles-app-inventor/

 http://appinventor.googlelabs.com/about/

Microsoft wake up to smell the coffee

November 11, 2010

Another month, another confusing set of stories relating to Microsoft’s web framework Silverlight and the next generation mark-up language HTML5.

I wrote about the relationship previously, referring to Internet Explorer general manager Dean Hachamovitch’s suggestion that the future of the web is HTML5. More specifically, I questioned whether Microsoft’s support for HTML5 left Silverlight out in the cloud.

The answer for a few weeks, at least according to the team in Redmond, was at the centre of the next generation web. In a blog posting (see further reading, below), Microsoft’s director of product management for developer platforms Brad Becker stated that Microsoft remained committed to Silverlight – and that the framework extends the web by enabling scenarios that HTML does not cover.

That comment, in itself, was not surprising. HTML5 remains a work in progress, with developments on various platforms continuing to be developed. Silverlight, as Becker states in his own posting, is already installed on 600,000,000 desktops and devices.

But success is not just about numbers. Take the related area of mobile operating systems, where Symbian remains the leading mobile OS with about 40% of the market, according to analyst Gartner (see further reading).

Those figures, however, include the legacy of Nokia’s previous success. The smart phone market is leading to the ever-increasing growth – and inevitably the dominance – of Research in Motion, Apple and Android.

The same will be true in web development. Do not assume people will use a specific platform just because a provider has a ready-made user base. More to the point, Microsoft seems to be coming round to that way of thinking.

Bob Muglia, Microsoft’s head of servers and tools division, gave an interview at the company’s Professional Developers Conference and said that Silverlight was still “core” to Microsoft but the company was looking to other technologies to allow people to access online services (see further reading).

Muglia attempted to cool the situation in a blog posting (see further reading), suggesting his comment that the company’s Silverlight strategy had shifted was simply a comment on how the industry had changed. It was a suggestion that, rather then cool the situation, helped to add petrol to an already well-stoked fire.

Developers rounded on Muglia, posting comments on his blog which suggested they felt hurt and that Silverlight’s reputation had been left damaged: “The effort needed to restore our confidence in Silverlight is tantamount to unringing a bell,” suggested one poster.

HTML5 is a work in progress, but its progress is also startling. Non-believers – even at Microsoft’s Redmond HQ – are beginning to wake up and smell the coffee. Confusion reigns but sense, and HTML5, will win out in the end. Now somebody needs to pass the coffee cup to Adobe !

Further reading:

http://team.silverlight.net/announcement/the-future-of-silverlight/?utm_source=timheuer

http://www.eweek.com/c/a/Midmarket/Sony-Ericsson-Drops-Symbian-OS-for-Android-OS-107191/

http://www.bbc.co.uk/news/technology-11673384

 http://team.silverlight.net/announcement/pdc-and-silverlight/