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@MattW + 1.

Talking trash against cash even under normal circumstances carries its own risk as the CEO of MasterCard found to his dismay when he was labeled a “cheapskate” by his own subordinates for doing so (http://ow.ly/AQHok). But spurning cash in a healthcare context is highly impractical especially when (1) Millions of people die every year because they don't have money to pay for treatment of their illnesses, and (2) Money really means cash or cheque or plastic credit / debit card in this situation but not mobile payments - even if a few patients might have mobile payments, I wonder how many hospitals in the world accept mobile payments. Then, to see the deadly Ebola epidemic used to decry cash and promote mobile payments on Finextra - which I thought expressly forbade self-promotion of any kind - is extremely disconcerting.

@Anon2 + 1: EMV in USA was supposed to be Chip+Signature, which, per the analyst quoted in my comment here (https://www.finextra.com/news/fullstory.aspx?newsitemid=26599), "puts EMV seriously at risk". Not sure how this EO will affect private sector implementation of EMV.

Re. "Half of US POS terminals to accept chip cards by end of 2015", do we know which half? Well, it may not matter: "EMV is seriously at risk in USA" according this interesting article by retail industry analyst firm RSR Research (http://www.rsrresearch.com/2014/10/14/emvs-broken-promises-in-the-us/). Why? It won't support Chip+PIN.

@JamesP:

At the point of applying for a loan, a prospect need not have an account with the bank. In virtually all cases I know about, at the point of disbursal, they need to. While it's specific to company / country / culture, I know many banks whose loan tail wags the current account dog or, to put it in marketingspeak, the loan salesperson "cross-sells" the current account product.  So, when I’m referring to realtime disbursal, I’m talking about doing so within the same bank.

Banks advertise their products. Someone sees an ad and applies for a product. S/he is a rank stranger to the bank. The bank hasn't done any prior credit check on that person. Even when it comes to targeted offers made to specific people, I've observed on more than one occasion in India, Germany and UK that the bank hasn't done any prior credit check before making the offer. While this is not a good thing, it’s not a rare practice. So online credit check does become a necessary step in the online purchase process.  That combined with identity, fraud, KYC and other challenges highlighted by you preclude 100% closure on the online channel for the bulk of the addressable market. They compel wet ink signature, post, etc. To me any brick-and-mortar activity like these appear closer to “branch” than “online” even if there’s no need to visit a physical premise.

Which is precisely why the online channel is still not capable enough to replace branches for new product sales (not to mention problem resolution but that’s a story for another day!)

@JamesP:

It's good to know that some banks in UK offer instant online application and near realtime loan disbursement. But the ability to offer it only to existing customers who have a good credit rating means they're applicable to a small segment of the addressable market for loans. At that level of penetration, the online channel is a long way off from replacing branches.

To me, the online channel can be said to have "truly arrived" only when it addresses the entire - or at least a majority - of the addressable market, after overcoming online KYC, realtime Credit Checks and other traditional bugbears of online sale of BFSI products. Do you know examples of any bank-owned loan origination systems in the UK or elsewhere that disburse loans in a few minutes to NEW customers whose credit score is UNKNOWN to the bank - similar to nonbank P2P portals like Zopa?

@ShitalC:

Like you, I've long believed that online sale of banking products was merely leadgen. 

Until yesterday. (a) According to an email I received from Kotak Mahindra Bank yesterday, funding of account is possible at the end of 10-minute online session. This was not the case when the same bank had introduced its Instant Account Opening portal 2 years ago. (b) Per this article in the Economic Times today (http://m.economictimes.com/industry/banking/finance/banking/citibank-and-sbi-experimenting-human-less-digital-banking-experience-at-the-mall/articleshow/44831896.cms), Citibank's digital bank in a mall in Mumbai allows online account opening on a kiosk all the way through to issuing a debit card in a single session (which the customer used to buy a product at the same mall that offered 20% cashback only on Citi cards) (c) According to the same article, SBI's digital bank at another Mumbai mall allows a customer to open a zero-balance account in 15 minutes, with KYC being done online via scanning of KYC documents and identity authenticated via Aadhaar Card database.

I haven't personally tried any of these offerings. But, if I take the messages at face value, these new developments take BFSI online capabilities to the next level. 

Namely to the level supported by ecommerce companies for almost 20 years. Ergo, my previous comment stands.

Your interest calculation example is very apt. I had this experience at a Top 3 private sector bank in India that has implemented CBS. I was trying to find out why the quarterly interest on my FD was lower than I had expected. Try as he might, the banker came up with an expected figure that was much higher than mine! Turned out he was applying the 9% rate blindly without realizing that it was per annum and had to be divided by 4 for a quarter! Things get even worse in case of premature withdrawals where the proceedings are taken out of the bank (when penalty is to be calculated and deducted) versus those where the proceedings are invested back in the bank (when penalty is calculated but subsequently waived).

Hopefully, in this new version, they'll do a better job of figuring out "How To Fulfill Targeted Offers To Hear More Ka-Chings" (https://www.finextra.com/blogs/Fullblog.aspx?blogid=10032)

Ecommerce began over 20 years. For all its advantages, why has it managed to achieve only 7% of total retail sales so far? Why haven't brick-and-mortar stores vanished yet?

During the last 5 years, # of brick-and-mortar stores went up from 1680 to 2000 at at T J Maxx, went down from 75 to 55 at Saks, and Amazon is testing its first physical store (Source:

http://fortune.com/2014/09/03/where-have-all-the-shoppers-gone/).

All this tells me that the channel mix is more company-specific and less secular than often claimed.