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"...total global fraud losses increased by over 10% to $7.60 billion in 2010". Not clear compared to when? If 2009, this is not a bad trend at all since transaction volumes increased by much more than 10% from 2009 to 2010, which means fraud as a percentage of sales actually reduced in 2011. 

As I'd pointed out in my 3-part Finextra blog post a couple of months ago, SMS Alerts are quite effective in keeping CNP fraud in check. 2-way SMS Alerts are even better.

@AdrianS-J: 

Not sure how many of the 2M registered companies are even aware that they can submit BACS payments directly. Given the average cheque value is well below GBP 10K, Faster Payments could be an even better option. With DA functionality added to the basic FPS service last year, it should be possible for corporates to submit FPS payments directly. 

"Would you buy a bank product through an iTunes store?" Yes, if banks dumbened down their products to match an average iTunes SKU's complexity. On second thoughts, in that case, I wouldn't need that product anyway and won't buy it from anywhere. 

"Or would you make a payment using an iTunes account linked to a iPhone wallet?". Yes, for products priced similar to an average iTunes SKU's. But, then I could do the same with Boku or Zong or PayPal or Google Wallet (the Google Play one, not the NFC one), so why Apple? 

Regardless of the answer, I'd continue to be banking with my bank that issued my credit card, not Apple. 

If this is the situation with giants like Google / Google Wallet and Nokia / Nokia Money, I fear for the hundreds of startups in this space. On second thoughts, maybe the market for mobile payments is only big enough for startups.

But Finextra Member raises a very valid point about how many people would feel comfortable about moving their money from their bank account to a startup's proprietary account. I would - about $20 at a time. Not sure how many startups can survive with such measly amounts.

@ChristopherMcC: 

True that black swans written about by NNT present an extreme case of bad or good luck. But, in actual practice, we see differences between what's right and what happens in many more situations. Just to take the Challenger example, I'm not sure if "gasket acting up in cold weather" or "cold weather in Florida" qualify as black swan events. Whenever I see analysis of past decisions, I can't help being reminded of the saying "Hindsight is 20/20". 

Talking about leading authors, my comments related to self-interest are inspired by Michael Lewis. I always felt that rating agencies - not banks, regulators or homebuyers - were the only ones who could be charged with making bad decisions that led to the GFC. After reading "The Big Short", I was convinced. 

@Barrie A:

I agree that my comments about portal were implicitly applicable only in the case of banks. Thank you for calling it out. I also agree with your point about billers like MNO, Utility, Councils and other nonbank billers: Barring a few occasions (e.g. check data usage, NAV, etc.), I find little reason to visit the biller's portal. Having said that, I notice that all these billers do have portals, so I'm not sure if mine is 2% or majority behavior.

In my experience, at least 50% of the billers do insist on passwords. So many bills, so many shared secrets, not easy to remember which shared secret is applicable for which bill. So, shared secrets pose no less friction. 

If, as you say, the average customer only gives 2 seconds of thought to decide whether to adopt eBills or not, then, IMHO, vendors need to raise their messaging to new heights or risk encountering continued consumer apathy. After so much analysis, if I'm unable to find a compelling reason to switch to eBills, I wonder if the result of a 2-second analysis will be any different.

Some have argued, quite convincingly IMHO, that before GFC most banks were playing "passing the parcel (of repackaged toxic assets)" and that, unfortunately, only Lehman and a couple of others were left holding the parcel when the music stopped. Which, to me, highlights the role played by luck. In my experience, in the real world, what serves self-interest is generally what happens. Even as we're debating about what's right versus what actually happens, banks have apparently recently latched on to other assets like education loan and insurance benefits transfer to create the next generation of first- and second-order derivatives. Only time will tell whether their decision to do so is right or wrong from a long term perspective but I don't think anyone will deny that they earn big fees for banks in the short term. 

After Lehman, the powers-that-be decided that the financial world just couldn't afford another Lehman and virtually forced one bank to acquire / merge with the other in my aforementioned shotgun-weekend-merger examples. All of this is public knowledge including the role of regulators in these events e.g. according to this USA Today story, "...many bank mergers are shotgun weddings performed by the Federal Deposit Insurance Corp." A little more connectedness with real word events of recent past would've prevented the irony of asking regulators to curb such attitudes.

It's in the very nature of luck that concepts like sustainability are simply not applicable to it - you just need it when you need it, not all the time!

These are situations where "you're damned if you do and damned if you don't". To the two examples cited by you, let me add the couple of shotgun mergers of banks (e.g. Wells Fargo + Wachovia) that literally happened over a weekend at the peak of the financial crisis 3-4 years ago.

Having been a part of one such forum that had to decide whether a Top 5 UK Bank should take a GO or NO GO decision on a highly visible payments program a few years ago, we knew that a GO decision could lead to a potential catastrophe but also that a NO GO decision would result in certain disaster for the top management. Had we applied the filters of "correct process", "most informed decision" and so on, NO GO would've been the logical decision. However, despite the odds, the forum decided on a GO decision. Somehow, things worked out fine in this case as they did with the aforementioned shotgun bank mergers.

While I don't discount the importance of these filters, they're not always practical, especially when it comes to time-critical projects. End-of-the-day luck does matter. This originally-Oriental concept seems to be gaining a lot of currency everywhere else in the world, if the over 200K Google Search results for "role of luck in business" are anything to go by.

Since I still write cheques, I tend to endorse your alternative - albeit biased - suggestion to banks for cutting costs! Standard ROI calculations might work for greenfield technologies but, for something like CBS, I think it might take novel business models to persuade banks to take the risk of replacing their legacy CBS with an integrated suite.