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As is often the case, it requires a high-profile case to highlight fundamental issues and raise the specter over the possibility of similar, albeit lower-profile, everyday occurrences all along.

Like I'd pointed out in an article titled "Taking Multilingual Support to the Next Level" published in TEC two years ago, we don't know how many Müllers have been transliterated to Muller by simplistically dropping the German umlaut character - instead of to Mueller by correctly adding an "e" in the place of the umlauted "u" - with the resultant possibilities of either (a) passing of a transaction that is meant to be blocked; or (b) blocking of a genuine transaction.

@Brett K:

Thank you for the clarifications. 

Sometimes, being late to the party has its own advantages e.g., late computerization in India and other emerging markets meant no mainframes, hence no Y2K problem. I think banks have a similar advantage now with their channels.

Let me explain with reference to the growing traction around "Omni-channel" retailing. Apparently, an increasingly large percentage of consumers prefer to research, price-compare and order gadgets, white goods and other products online, but prefer to pay and collect them from physical stores.

If this is happening with physical goods, I tend to believe that the banking industry, with the more complex nature of its products and services, will need to plan for omni-channel sooner or later. 

Maybe banks could leapfrog directly to an omni-channel landscape right away? In other words, freeze existing channel capabilities at their current states, spend their time and money on developing suitable integration pathways between multiple touchpoints spread across multiple channels. Personally, I don't think it's mandatory to reach the 100% mark in the current channel journey before jumping on to the omni-channel bandwagon, but that's a purely subjective view.      

There's an app for that!

I know of at least one called SilentBodyguard which is worth its free download for several reasons:  

1. It'll even work for the panic-striken, Facebook-impaired, set. 
2. It automatically supplies the rescuee's physical coordinates to their potential rescuers, so it's useful even when the rescuee needs rescuing outside their home.
3. But, perhaps most importantly, "if the home invaders bypass all the solid core doors...simply take a phone off the hook", I won't trust Laptop / Facebook / Twitter to be up and running at that metaphorical equivalent of an earthquake and hurricane striking together!

Until we reach the point when we're able to cite relevant examples from the banking industry - whatever happened to Metro Bank? - and not have to rely on Apple Store type of examples, banks are safe. Equality or inequality in the relationship, banks can draw comfort from the knowledge that people can't buy checking accounts, mortgages and other financial products from Apple Stores.

But, in all fairness to banks, let me narrate the experience of a business associate who visited the flagship Apple Store in Times Square, NYC, to buy an iPad 2. Although it was just three or four days after the launch, he was told that they had run out of stock of iPad 2s and that it would take two weeks for replenishment stocks to arrive*. With its storied commitment to superior customer experience and complete control of its supply chain, if this is the best that Apple could do, how can we expect a bank to explain why it had to decline someone's mortgage application? After all, the applicant's prior dealings with another bank or FI could've tarnished their credit rating, a factor that impacts the bank's decision but one over which it has little visibility or control. 

*: According to the store attendant, Apple was going to bring back stocks of iPad 2s previously shipped overseas so that they could meet local demand. When these consignments returned, they'd be used to restock the Times Square and other flagship stores in the US. That's how this store could commit two weeks delivery. So, if the customer journeyed via Broadway / 5th Avenue, Apple would be pleased to sell them an iPad 2. However, if they journey via Regent Street or rue de Rivoli, sorry, Apple would turn them back empty-handed. I'm not sure if I'd like this kind of attention to my journey from a bank!

@Candyce E:

Thank you for the feedback. As a firm that provides marketing solutions, we use email marketing heavily, so it's very much in our interest to find solutions to the issues that you've described. I've shared this page on a couple of pertinent groups in LinkedIn. If I get some more ideas from there, I'll past them as additional comments on to this Finextra page. 

@Duncan A:

Thank you for pointing out that there are many more factors than capital adequacy that determine the survivability of a bank. As I'd highlighted in this blog post, these include a payments landscape's technical stability, reference data, and other issues that fall outside the purview of capital adequacy ratios.

Banks are a part of the US isis payments JV that includes Discover and Barclays apart from Verizon, AT&T and other TELCOs. The origin of M-PESA will show that it was founded to cater to a market that banks didn't want to serve for ages for whatever reasons. Hemmed in by a combination of regulations (e.g, While MNOs might be able to serve the microfinance market in India profitably, they're not permitted to) and consumer trust issues (e.g., Who will buy a CD from a  non-FDIC insured institution in the US?), there's only so much that non-bank financial services providers can do. Personally, I think banks have a long way to go in exploiting mobile technologies in corporate and investment banking. 

@Candyce E:

Banks currently advise their customers to look out for phishing emails by carefully inspecting the URL of the hyperlinks present in emails purportedly sent by them. Not only does this cause the problems for email marketing that you've highlighted so well, but it often fails to fulfill its basic purpose since most people are unable to differentiate between a genuine URL like offerseaster2011.communitybank.com and a fake one like communitybank.offerseaster2011.com. Let me not even begin to describe the added complications that enter the picture when a bank chooses to outsource its PPC ad and email marketing landing pages and microsite to genuine third-party providers. 

Instead, banks should implement a truly foolproof anti-phishing solution that works by authenticating the bank's website to the user regardless of whether s/he reached it by clicking an email, PPC ad, Twitter tweet or whatever. The genuine website contains the usual branding elements of the bank plus an authentication image preselected by users from a library supplied by the solution. When users reach a website that only contains the branding elements, they know they've reached a fake website. 

I know that HDFC Bank (India) is one bank that has deployed this technology (Disclosure: HDFC Bank is one of the banks I bank with, which is how I know that they've implemented such a solution). If more banks would do so, phishing could be eliminated and email marketers can heave a sigh of relief!

This is the first study I've come across that acknowledges that the shift from credit to cash during the Great Recession had as much to do with supply-side and regulatory considerations as with consumers becoming more thrifty. This is a possibility I'd alluded to in a recent Finextra blog post on this subject.

In a private briefing two years ago, a leading analyst firm commented, "that's the million dollar question", when we asked them whether the shift from credit to debit was temporary or likely to be permanent. Since the latest study also raises the same point, it looks like the jury's still out on this one. 

Reporting mobile payments as a separate category is fine as long as it's intended to highlight a growing trend on the consumer side. However, since many current forms of mobile payments are funded by an underlying credit or debit card account, their volumes rightfully belong to pre-existing credit and debit card categories rather than to any new method of payment. 

This study lends credence to the school of thought to which I subscribe: NFC in single-purpose cards like Oyster makes transactions faster and more convenient. However, the moment it becomes multi-functional, shifts to a smartphone and makes the payer run an app at checkout, its speed and convenience benefits vaporize.