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Ketharaman,

Maybe, but the generational thing doesn't explain the success of the Starbucks app as it stands today, nor does it explain the success of Kindle, Spotify, iTunes, etc. Behavior shifts across the board when it is compelling, Square Wallet wasn't compelling enough because shifting from a swipe to a tap or a face authentication isn't exciting enough to warrant a wholesale change in my behavior.

Tony - you should tweet it out when you do :)

BK

So obviously there is no demand for NFC or mobile payments...

"or the mobile app once it is built"...

Says it all in terms of Private Banking's ability to weather digital ecosystem shocks these days. PB's are the slowest to move on digital, but often have the most time poor customers who require digital more than average retail customers. The bank as a platform here is clearly compromised because of LACK of digital investment 

Now can I say "I told you so..."?

The lack of encryption is a fraud nightmare with mag-stripe. US banks have already had to reissue 17m cards as a result of the Target fraud, which would have been prevented with EMV - none of which is taken into account in King's comments. I'm afraid he's grossly underestimating the impact by chosing only one small data set in an avalanche of data against mag stripe. 

My favorite is this. The US accounts for 47% of global card fraud, but processes only 23% of card transactions globally. I think that says it all - it's all down to mag-stripe vs EMV.

http://www.businessweek.com/articles/2013-12-23/why-the-u-dot-s-dot-leaves-its-credit-card-system-vulnerable-to-fraud 

While there may be a better solution to EMV in EMV v2 or SE, regardless mag-stripe is grossly outdated tech that needs to be replaced. The US myth that something better than EMV is going to come along and they'll lead is just wishful thinking. 

@Ketharaman,

That is exactly why I made the post. Your argument is the typical line of thinking, but if your stated goal is financial inclusion as an economy, government or regulator, you have to recognize that heavy KYC requirements will work against inclusion. For the majority of low income customers in India, there is no logic to enforcing the same KYC rules you'd demand for an investment account, but you could make an argument that KYC for a mobile phone account is comparable. 

Any other stance will result in financial exclusion. At the end of the day, why are we putting KYC requirements on the segment of society that needs formal banking the most anyway? It makes very little sense. It is just inertia.

You can't have your KYC cake and eat it too. If you want strict KYC in-branch, you will exclude the majority of those in India that need banking the most. If you can accept KYC-lite in a grocery store, post office or mobile phone store, then you will get extremely different results on the inclusion stakes. 

BK 

I'm with Bo here. Hong Kong scrapped cash more than 10 years ago, it is about time London buses evolved into the present. Now if only we can get the NYC subways to take the step

@Neil Absolutely. While all the metrics in branch usage are going south, whether it is average number of visits per customer per year, revenue, utilization, cross-sell/up-sell conversion rates, etc. the fact is that there is a role in the psychology of customers for a branch when they get into trouble. 

While the branch for most customers won't any longer factor into their day-to-day banking environment, when a customer has an issue, tries to solve it via mobile, web, call centre and can't - they'll go to the branch. At that point, the person who serves them in the branch is the single most important person in the brand relationship and if they can't fix the problem on that one visit - the brand relationship is over. The implications of this are that you need fantastic all rounders, great service people (not product or transaction) and excellent in-branch support systems to make that happen. Not tellers, not financial product advisors.

Oh, and if you are like @Katharaman and you think that Mr. Bank 3.0 has just predicted branches are coming back because we need people in the branch to solve our biggest service problems? You're wrong. We will still only need half the branches we have today to provide this kind of support network, and then they will generally be 1/3rd of the size they are today hovering around 1-2,000 square feet in footprint. 

@Ketharaman - the problem is one of regulations and policy. Are you telling me customers would rather go down the branch to change an address, that do that online if they could at all avoid it?

That is what we call a 'false positive'. Saying branches are great because they let customers change their address in person is one thing, forcing customers to do that ONLY through a face-to-face interaction is another thing entirely.