Community

"Customers want to leave their wallet at home".

"Customers need help with their finances".

"Customers must be permitted to switch banks".

Given the tepid response to mobile wallet, PFM / MoMMA and Account Switching technologies, these assumptions are more imagination.

Hope the assumption that customers want to cross the digital road and need help doing so is grounded on reality.

Suppliers are the ones who will benefit from adoption of their products / services. So why should public money be used for this program? Especially when vendor consortia like CFDRG and FDATA already seem to be doing some work in this space (Source). 

Let's examine this statement carefully: "financial wellness for thousands of consumers have been improved by consumer-permissioned data driven solutions."

Given that MINT et al boast of millions, if not tens of millions, of users, "thousands of consumers" is 0.1% of the user base. IMO, any technology that delivers its promised benefits to only 0.1% of its user base is closer to snake-oil than innovation. Taking financial decisions by using the toss of a coin would've benefited a far higher percentage of the user base.

It's simply not worth handing over the keys to the kingdom - aka Online Banking  credentials - to something that delivers benefits to such a tiny fraction of its user base.

During the last 10 years or so, a few million people have handed over their Internet Banking credentials to MINT et al. So, even without the official approval of PSD2 / Open Banking, PFMs and MoMMAs have had full scraping access to customers' bank accounts for a long time. What have they done with it so far? Have they radically changed the financial health of these people? or helped them fund their retirement? or helped them optimize their fixed income? If they can demonstrate that they have, tens of millions of customers will queue up to hand over their banking creds to them - even without PSD2 / Open Banking regs.

LOL. Fintechs say technology evolves too fast for banks to keep pace. Now banks say banking evolves too fast for regulators to keep pace. I'm waiting for the regulator to close the loop by saying regulation evolves too fast for fintechs to keep pace! But it's all a moot point. Innovative Fintechs Don’t Need No PSD2 Regulation

@JamesPiggot's Wife + 1. Despite working in the IT industry for three decades:)

I recently had to find out the value of the last payment I'd made to a certain service provider. I was finally able to track down that transaction only in my handwritten transaction log. Online - no search, period too short. eStatement - no search or mention of beneficiary. Printed statement - bank has stopped issuing.

I wrote In Favor Of Paper Statements in 2011. Six years later, most of my reasons for preferring paper statements then are still valid today. If anything, the KYC-related reason has become stronger now.

Phew feels like I've just read a long IBM press release!

On a side note, virtually every Blockchain service I've come across so far - including the ones described in this post - seems do'able even in non-BC architecture. In fact, some of them have been done on centralized database architecture long ago e.g. RFID-based supply chain tracking, car wallet, etc. Love to know your thoughts on why Blockchain?

JFYI, whenever I’ve asked this question in the past, I’ve got canned responses like BC is secure, tamperproof, etc. Maybe it’s only me but I find it hard to believe that non-BC systems have been breached and tampered with all these years. Therefore, I’d much appreciate if your response can go beyond listing these boilerplate benefits of Blockchain. 

@BradleyHoward + 1: "Millions of consumers already trust retailers with bank details by leaving their credit card details on file with Netflix, Amazon, Uber, Apple, etc."

@StephenClarke + 1: "I'm not sure that the consumer thinks about trust when they sign up to Netflix etc. Its just what they have to do to access the service."

I'm willing to wager that a majority of Brits think "bank details" means "Internet Banking UserID and Password". If I'm right, while Brits will continue to leave card on file with retailers, blindly click on "I Agree" button while signing up for popular Internet services, and continue to issue direct debit mandates to billers to pull out money directly from their bank accounts, they will stop dead on their tracks when a nonbank third party PSD2 service provider seeks access to their online banking portal in order to make payments on their behalf. I believe so partly because of trust deficit reasons but more importantly because the average consumer (Brit or otherwise) already has enough choices of payment methods and won't find any compelling need to hand over the proverbial keys to the kingdom just to get to use yet another payment method.

End of the day, you can put how much ever lipstick you want but a (retail) payment is just a necessary evil and not a high involvement product / service. 

Good post. From my experience in B2B technology marketing, the mere introduction of technology can (a) catalyze a change in thinking and approach that wouldn't happen without the technology and (b) lead otherwise inert people to suddenly question themselves. Obviously this happens only with a small fraction of technologies. In my three decades in the technology space, it has happened with ERP, Web 2.0, and Cloud and has not happened with Social Networking, Mobility, etc. I strongly suspect Blockchain will belong to the first category. But only time will tell.

@JamesPiggot, @AnonFinextraMember:

+1.

In my post Innovative Fintechs Don’t Need No PSD2 Regulation, I'd given another example of truly valuable money management tip that I look forward to getting from PFMs/MoMMAs: "Earn $$$ more by sweeping X amount from a checking account to a savings product."

Looking at all our wishlists, one common theme emerges about what consumers would find valuable: Tips to maximize ROI of portfolio aka bang for the buck. 

With the passage of time, I'm realizing that tips alone won't suffice. With the constant dumbing down of branch and remote channel staff, executing a tip entails a lot of friction. Many times, I know I'll gain $$-$$$ by changing plans or $$$-$$$$ by changing providers but it's so painful to actually make the switch that I let the opportunity go by.

Perhaps the killer feature for online aggregation is fulfillment of tips (with consumer's approval, of course) related to products, plans and even providers such that switching banks stops being more painful than the proverbial root canal surgery. If they supported that, PFMs/MoMMAs will easily be able to charge a percentage of gain / savings to users for using their service.

@AlexanderPeschkoff:

I don't disagree - as I've acknowledged with the "killer feature" part of my comment. 

That said,

1. The same Apple of iPod / iPhone fame killed Newton 20 years ago and never reentered PDAs probably because it couldn't find / there wasn't a killer feature in that product category. So passage of time is no guarantee of mainstream adoption.
2. Furthermore, technology changes rapidly and Finsurgents make 5 year rolling forecasts of death of branch, plastic, cash, etc. So passage of time is not a luxury that technology can expect either.