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@SteveE:

Absolutely. In fact, alongside our guidance for implementing social media based customer support, we strongly recommend banks to follow a "zero tolerance" policy towards NSFW language. Appearing hip and cool by participating in social media and all that is fine. But, in all that, we should never forget that a bank performs a very serious function in the society and, regardless of the channel, communications between a bank and its community must be carried out with utmost respect to each other. I for one won't want to wade through filthy language on a bank's property even when I know that the bank hasn't written it by itself.   

As an aside, just wanted to be sure that I've got Co-Op right. From what you say, it seems to have a vibrant Twitter account but, one bank called "The Co-Op" got zero points in this social media benchmarking report and, "despite having an account, does not even tweet"!

@DaveB:

TY for your comment. Agreed. You might've noticed that I've hyperlinked my post to the said WSJ article: "Even going by transaction volume, Starbucks' recent announcement that 10% of instore payment transactions happened by mobile means that 9 out 10 transactions at Starbucks took place with cash and plastic cards". In fact, the chart given at the end of my post is actually scaled to this higher share of 10% rather than the lower share of 3.75% by spend value.

@BrettK: 

TY for your comment. The very first paragraph of my blog post provides a hyperlink to the GigaOm article from where I got the US$ 500M figure. Even the opening paragraph of this article is illuminating enough:

"Smartphone owners in the U.S. bought $500 million worth of goods and services using mobile wallet apps in 2012, according to a new report by Berg Insight. That’s just a drop in the ocean compared to the trillions of dollars in credit and debit card transactions every year."

Now, if you claim that industry analysts like GigaOm and Berg Insight are ignorant and misleading, that's another topic.

As I'd highlighted in The Business Case For Social Media Customer Service, better opportunities for cross- and upselling are one more reason for banks and other service providers to take this channel seriously.

@NeilB:

TY for your comment. There's no doubt that Starbucks must be getting some benefit out of accepting mobile payments - otherwise, I don't see why it would be taking so many initiatives related to mobile wallets. However, the point of this blog post is different - it's to assess the popularity or otherwise of mobile payments as a method of payment.

But, now that it has come up, the quote about deposit on Starbucks Card vs. Community Bank is as relevant to the topic on hand as my other favorite quote about how the # of mobile phones exceeds the # of toothbrushes: (1) The US$ 3B figure refers to the money loaded to the Starbucks Card, which comes in both plastic card and mobile app forms, so it doesn't say anything about mobile wallet's popularity (2) Spend and transaction volumes are the only two metrics that're valid while estimating share of mobile wallet. Amount loaded is not (3) "Deposit" means "accepting money with the promise of returning it with applicable interest". Money uploaded to Starbucks Card doesn't come back as money. Therefore, it doesn't qualify as a deposit in the first place and certainly can't be compared with bank-raised deposits.

I've experienced the introduction of new channels in at least three contexts over the past 15 years or so viz. Internet ERP in the late '90s, Internet Banking in the early '00s and Mobile Banking in the late '00s. Attribute it to hype-affected customers or strategy consultants sitting in ivory tower or whatever but, on each instance, the expectation from the new channel was identical: It must do everything that can be done on the existing channel. I understand this as "multichannel support".

It takes a few years for people to accept that each channel has its own strengths and that the best UX can be delivered by letting a single business process (e.g. buy mortgage product) hop across multiple channels in such a way that each channel plays to its strength and the customer finds each hop natural (e.g. get tipped off to a new product in social media, compare different products online, actually sign up for one product at branch). I call this "omnichannel support". 

As I'd highlighted in my personal blog post Jumping On The Omnichannel Banking Bandwagon a couple of years ago, multichannel banking is neither necessary nor feasible and omnichannel banking is the way forward. 

An ex-colleague in the USA owed a few of us a treat but couldn't spare the time to take us out. She simply gave her credit card to us. We went to a nearby fast food restaurant and charged all our meals to her credit card. We weren't even asked for a signature, so we didn't have to engage in any sign-with-left-hand kind of friendly forgery. I was assured that proxy credit card transactions like this were quite common, at least for $ and $$ purchases. Maybe the stores in question are flouting some rule or the other but "Card Present" is still very much a reality. Any alternative mechanism that ensures "Cardholder Present" might be well-intentioned but is likely to be perceived, at best, as a solution seeking a problem or, at worst, as a threat to business as usual.

@AlexanderP: TY for your comment. My remark about NECTAR was about mobile app, regardless of whether its loyalty program is in itself popular or not when compared to Starbucks'.

@MattS: Postcard for redeeming rewards is indeed counterintuitive. Are you sure there's no version issue? According to this FAQ, over a year ago, Starbucks seems to have killed the postcard and started giving 1 free drink after 12 drinks.

As an aside, even assuming it's 1 free drink for every 15 drinks, the cost of this reward works out to 6.67% discount. Compared to that, Starbucks incurs less than 2% MDF / MSC for accepting network cards. Therefore, avoiding interchange fees of open-loop cards can't be Starbucks' goal of introducing its loyalty program, as someone seemed to suggest on Finextra recently.

Good example of a "targeted offer" - the one regarding connecting the shipper with LC revolving client. Sounds very plausible to execute and highly beneficial for all parties concerned. But, beyond whispering such advice to the ears of their clients, I doubt if banks will ever institutionalize such a practice. My skepticism arises from my experience with a leading business center company that attempted something very similar. The company established an online community with exactly the same promise - "a couple of our clients are website designers, all our clients require websites, sign up for this community, we will connect you with one another and help you grow your business". Two years later, hardly any connects have happened. Now, if this is the fate of targeted offers in a non-regulated entity like this business center that is full of bright, young, energetic and otherwise aggressive employees, I wonder if they have any chance of taking off at banks. Apart from the obvious issue of banks wanting to mind their own business, there's the risk of liability arising from such advice.

A leading bank in the US reportedly saved 40% of its operating costs by shifting one of its tech shops from Wall Street to New Jersey and another from Long Island to Ohio. Such a shift from metros to semiurban or rural areas - or "middleshoring" as I'll call this trend - is another factor that drives backshoring. However, I expect the impact of this factor to be temporary since middleshoring proves equally cost effective even in the offshore country. Once rural infrastructure improves in India and other offshore countries, the  cost arbitrage between onsite and offshore locations will be restored to its traditional levels, thereby making offshoring from "Middle USA" to "Middle India" as attractive as ever before.