Banks - Own Mobile Wallet to lead Digital Commerce Transformation

The digital disruptions is disproportionate in case of transaction banking in retail as compared to lending in retail or commercial banking where human intervention is must . Mostly to secure cheap deposits by pleasing the customer through enhanced experience I think banks are going over board . The disclaimer being all the hype made in media is indeed true . A more sensible investment would be to invest on analytics as in any case banks need to comply with BCBS 239 . With a structured data architecture available in a single point of truth investment in analytics will reduce marketing costs and result in a higher conversion

Spot on Prosenjit. conversion is still at 25-30% for most of the banks. increasing that will definitely help.

In the past, I wrote that TELCOs were making a hash of financial services:

1. Banks Have Nothing To Fear From TELCOs
2. Omnichannel Fiasco No. 2: M-PESA

Lately, I'm feeling that TELCOs are making a hash of telecom services itself: 

1. One TELCO's website EBPP doesn't work.
2. One MNO's mobile app fails to enroll.
3. Another MNO's 3G has 40% downtime. 
4. Another MNO changes bill cycle unilaterally, spouts BS by claiming that it has done so to "serve you better", threatens to stop service unless I immediately make a payment that I'd already made 3 days before the previous deadline, which turns out to be 1 day after new deadline.
5. I've never ever received a sensible upsell / cross-sell offer from any TELCO.

It's not just in India. I remember Ron Shevlin, a leading analyst in USA, once calling a leading American TELCO the most incompetent company in the world (https://twitter.com/search?q=Verizon%20from%3Arshevlin&src=typd).   

Banks are not the epitome of great CX but if they ran their shop the way some TELCOs did, I’d be driven to pull out all my money from banks and keep it below my mattress. 

Against this personal experience and anecdotal evidence, I'm very curious to know what TELCOs have done to justify your overwhelming confidence in their ability to "create much better payments and ecommerce driven experience than most of the banks do today."

I think,every transition or major shift goes through Hype cycle before it gets streamlined. Telcom or retailers are taking their time to streamline things. But, point is not what is the current state of affairs but what could happen in a blink of eye (1-2 years).
The winners in this emerging arena will be those who “own” the consumer. This includes both access to customer information (e.g., daily contacts for gaming, shopping or chatting), as well as the ability to provide a compelling value proposition to activate and engage the consumer over time. Financial services providers are in a prime position to capture the mobile payments and marketing value pools given their broad scale, connectivity assets and privileged role as the guardians of consumers’ financial information. However, if financial services providers move slowly or resist disruption of their core business, nimble non-bank technology companies are likely to develop workaround solutions in the medium term, exposing banks to full disintermediation.

Pls refer: Mckinsey research articles
“The role of data analytics
companies in mobile commerce,”
"The 2013 McKinsey Mobile Payments Consumer Survey"
"The road to mobile payments services"
"Payments wave, commerce ocean: The arrival of the mobile wallet"

Gartner-> mobile payments transactions will break the $235 billion mark by the end of 2015. That would be an increase of 44 percent over the figure from 2011"

Business Insider -> "United States there were already approximately 7.9 million consumers who had adopted a system compatible with NFC technology (near field communications) or QR codes.

"Blink of an eye"? "Deep slumber" is more like it. I first heard this "TELCOs will disintermediate banks" rhetoric in 2009, when Boku, Zong and other Gen Y Mobile Payments (GYMPs) entered the retail payments fray. Six years have passed. What has happened? None of them has gone past their initial target market of virtual goods. For their own survival, they've given up their sole reliance on their MNO billing model and have started using the same banking rails that they'd originally set out to disintermediate. In other words, far from disintermediating banks, these companies have become even more reliant on banks now. Given their unenviable track record over 6 years, why should we expect anything great from the TELCO industry over the next 1-2 years?   

Mobile payments has been at the tipping point for each of the last 10 years, so crystalball gazing in this space has lost meaning.

I'm surprised to see TELCOs linked to mobile payments in the same week that the biggest TELCO-sponsored mobile wallet, ISIS / Softcard, has shut down. The only couple of mobile payments that have achieved some degree of success are Starbucks and Apple Pay. Both of them use banking rails. Whether mobile payments goes mainstream or not, TELCOs' track record tells me they won't be able to disintermediate banks. 

Right words Abhishek -Hype Cycle . The very purpose of technology is it divest customer out of the branch . It was ATM then internet banking and now various apps . From a business point of view there is hardly any direct income stream though a indirect one exists from mobile payments/ banking.May be a good ploy like social media banking too keep the customer interested :)

@ketharaman - i think both of us want banks to succeed and be the institution we all respect. banks are better of being more respective to the threats coming from outside, rather than assuming everything is fine and be happy. I will be happy to be proven wrong, because we share the same end goal.

I've no vested interest in banks other the quality of their CX. While they're years ahead of TELCOs on that count, banks can still do a lot more to put their house in order and improve their CX. All that requires a lot of time and energy. I don't want them to waste their efforts on sensitizing themselves to non-existent threats from TELCOs, who, over the years, have clearly proved themselves incapable of competing with banks on financial services.