Community

There's one more reason why innovation favors the bold: Opportunities for innovation lie more often than not in exploiting “regulatory gaps”, as I'd highlighted in my latest blog post Fintechs Need Marketers And Lobbyists, Not Lawyers.

I too thought a sample size of 1K can't yield any statistically significant results for a population of nearly 300M. When I saw more comments expressed along the same lines, I Googled around. Seems like I'm mistaken:

1. Per online calculator available here, a sample size of 1006 yields a 95% confidence value of results with 3% error margin for a population of 300M. Click here for details.   
2. Not convinced with the above, I found a formula to calculate error margin here. When I plugged in the values, I found the results tallying with #1. Click here for details.

I was also intrigued by the following line on the online calculator website:

“The sample size doesn't change much for populations larger than 20,000.” 

Not sure if theory of statistics has changed or survey methodologies have improved (or something else) since I studied the subject years ago but a survey sample size of 1K does seem to suffice to draw conclusions about a 300M population size. While I'd love to be proved wrong, it's hard to dismiss this survey so easily.

America has very low tolerance to friction compared to RoW. Not surprisingly, as I'd highlighted in Mitigating Fraud Does Not Pay The Bills, the migration to EMV is meeting with severe resistance.

@João Bohner: TY for your agreement! But I must admit that there are times when I've asked myself the same question that forms the title of this post. I've described my experiences and recommendations on my company blog "Can Something Be Too Frictionless?" (hyperlink removed to comply with Finextra Community Rules but this post will appear on top of Google Search results when searched by the title).

Just came across "Disruption is not a strategy". The author Jerry Neumann explains Uber's approach succinctly: "The new market was available because Uber first ignored, then lobbied to change, regulations that made that market seemingly unavailable to new entrants."  

Good post. This totally resonates with my experience against a very similar background.

Some parts of financial services have indeed mastered innovation. As I highlighted in Why Banks Can't Transform Legacy Applications - Part 2, "...banks have proved their innovativeness by launching ARM, CDO, CDO2, CDS, MBS and a slew of highly innovative structured financial products that have made a lot of money for them". If some other parts of financial services haven't been as innovative, maybe it's because there is no business case for innovation in those areas? As I pointed out in my blog post, "...I've heard C-level bank executives say this, retail and commercial banking are fairly simple businesses that don't need to be overcomplicated by innovation for its own sake."

"clearly something is amiss". Clearly. Blaming everything else instead of finding the root cause of the problem is what is amiss, IMO. People who check account balance on mobile are already banked. I never understood how USSD or iOS or any other mobile technology that shows account balance will help convert unbanked population to banked. 

Calling B.S On Banking The Unbanked

But that's only me. This won't stop fintechs from claiming that Financial Inclusion measures will be a big hit if they're carried out on a native app.

Nice post. I agree with most of your recommendations except the second part of your sentence "The most technologically advanced or frictionless experience might not best serve the needs of the customer.". The way I see it, frictionless WILL ALWAYS serve the needs of the customer almost by definition. Just that frictionless needs to be viewed more broadly as an attribute of the customer journey, not of a piece of software or hardware, no matter whether any technology is involved in facilitating that journey. For example, Frictionless can be in how a bank staff interacts with a branch customer and how a paper form needs to be completed. In fact, in my blog post How Banks Can Increase In-Branch Sales, I'd specifically highlighted ways by which branks can increase in-branch conversion rates for their offers by delivering a superior CX without really needing much technology. 

Interesting post. 

Just a couple of days, I asked SQUARE how many customers really abandon a purchase because merchant does not accept credit cards. You can find the tweet thread here:

https://twitter.com/s_ketharaman/status/757657019230846980

I've no truck with your boat merchant (pun unintended) but is it possible that (1) he does not accept credit cards because he finds the 1-2% MSC too high or (2) he cannot accept credit cards because he hasn't found any bank willing to extend a merchant-acquirer account to his business? 

Not sure if SQUARE has entered UK but, as I'd highlighted in this blog post, other mPOS providers may not be able to help a merchant stuck with issue #2 above.