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Even if IT budgets of traditional Tier-1 banks get slashed by 10-20% in these tough times, they'll still have many hundreds of millions to spend. So, they're a far cry from startups, most of whom have to manage with a few millions or even less. Besides, there's enough evidence to support the claim that, when traditional banks implement technology right, they can gain massive business benefits. This is unlike startups where only 2 out of 10 are truly innovative / successful. Therefore, MVP / Lean are almost indispensable for startups whereas tried-and-tested methodologies that are fully compatible with their organizational DNA make more sense for traditional banks. 

Maybe it's only me, but I find it difficult to understand typical mobile P2P payment use cases such as "pay a friend back for lunch" and "dividing a round of drinks between friends". If everyone in a group has an m-wallet, isn't it more natural for each of them to pay their respective tab directly to the restauranteur or bar owner? Why should the current practice of one person paying the whole bill by plastic and claiming back individual shares from the others even arise?

@Jan-OlofB+1.

Not saying that businesses should reconcile themselves to fraud but, as the famous saying goes, "No risk, no gain". End of the day, the Cost of Anti-Fraud Systems + Revenue Loss due to False Positives + Revenue Loss due to Friction-Caused Abandonment shouldn't exceed the Amount of Fraud Prevented.

Good stuff for bulk payments. Does anyone know of something similar for on-demand, one-off payments? With many banks, it's quite cumbersome to set up beneficiaries and initiate instructions separately for each payment method like RTGS and ACH. 

"Lean" and "MVP" are perhaps ideal for startups. I'm sure many nonbanking FSPs already follow them. But, it's not clear if they're fundamentally compatible with the basic DNA of decades-old traditional banks.

I'd commented in the specific context of your statement that there's a "palpable void in payment chain...", which was the only Call To Action for banks and FIs that I could spot in the entire article. If you're also calling upon banks to use their transaction data to craft personalized, LBS offers, I agree with you. In fact, I've voiced similar views myself in a recent Finextra post and comments:

Save Costs But Lose Revenues With eBills And eStatements

A Banking Product Made to Order

There's no shortage of payment products that stoke impulse purchases. Amazon 1-Click, Google Wallet and PayPal are a few examples of products that don't make consumers enter 80-100 keystrokes of payment information before putting through a purchase transaction. Since they all operate on existing banking rails and pay toll by way of interchange fees to banks and card networks, there's really no pressing need for banks and FIs to build such products by themselves.

Question is, to what extent do regulators allow such payment products to deliver on their fundamental promise of enabling frictionless payments? Here, the situation is highly mixed. In some countries (e.g. USA), regulators don't interfere and these payment methods do permit impulse purchase. In others (e.g. India), they mandate two-factor authentication to the extreme degree (e.g. even for IVR and mobile payments), thereby nipping impulse purchase in the bud. 

Using a Twitter Sentiment analysis tool, we see RBS at 17% POSITIVE vs. 83% NEGATIVE and NATWEST at 28% POSITIVE vs. 72% NEGATIVE. With such an overwhelmingly negative sentiment, we can be sure that negative comments haven't been removed. After reading some of the negative tweets, I was shocked at the sheer amount of NSFW content present in them. Wonder if both banks might pull out of social media only for this reason, the way ICICI Bank in India partially did by refusing to entertain customer complaints on its FB page. By staying away from social media, banks will surely lose the opportunity to stoke positive feedback from their advocates. But, as a bank, they do have a commitment to keep their real estates free of such bad language, whether they deserve it or not.

Facebook as source of KYC is an interesting idea. I've heard that SQUARE already uses a potential merchant's social media presence to judge its risk profile and decide whether to give it a SQUARE account or not. Hopefully, cash-strapped smaller banks will switch to FB for KYC instead of developing and maintaining internal KYC systems. But, mainstream adoption will need getting the regulators on board to the idea. Besides, FB can only provide proof of identity whereas most bank KYC also requires proof of address, for which FB is not a trusted source. Photoshoppable utility bills are not the only source of address verification in many parts of the world. Many countries use AVS web services as well.  

Props to Cisco for getting this spot on. When I wrote about how banks could go omnichannel in my 3-part blog post Jumping On The Omnichannel Bandwagon, I was going largely by personal experience and anecdotal evidence. Happy to see research that establishes conclusively that customers really want different channels for different purposes and, at times, a combination of different channels for the same transaction. The behavior data given on slide 6 of the deck is especially telling.