Community

Nick,

Thank you, very much appreciate the feedback. I find it really interesting when a technology starts to evolve and as it does so, starts to change consumer behaviour. I suspect there will be more much more change to come with consumer payments.

Best wishes,

Alex

Hi Graham, it's a very good point and one that's often dismissed by start-up culture. Incumbency in a regulated environment is a powerful position and it makes disruption difficult, although not impossible. Obviously if the regulator starts supporting new entrants (as now in the UK), then incumbency becomes less of an advantage. Still, it's noticable that in the UK the most successful non-bank entrant to financial services is Tesco Bank, which is backed by a retailer using retail principles (...but no branches).

I'd agree with the comment about partnerships.  The TELCO industry (in broad terms) isn't as developed as parts of the banking industry at partnering, creating shared service bureaus and other ways of chopping up the value chain. Compared to how banks handle all the actors in payments (processors, acquirers, networks, etc...) and do so at scale and volume across multiple entities, the mobile operators just haven't had that experience.

Thank you!  I have to admit, I don't understand how the TELCOs managed to squander such a head start over the banks and the FinTech start ups.

What has happened in Africa shows that TELCOs (at least VMNOs) have the ability, the skills and can make a living from micro-payments. I know regulation is often cited as an obstacle in the US & Europe, but that's not stopping the FinTech start-ups, so it's unclear why it would stop a TELCO.

I understand the frustration with the channes not being joined up. Contact centres handle inquiries in real time, Twitter handles inquiries in real time. Getting a universal queue and a single view of customer is not that hard (if you really want to do it!).

The bigger challenge you highlight is the culture and processes. This bank could integrate it's channels, but if doesn't change the staff's ability to respond to the customers situation then it doesn't fix the real problems.

Ketharam, I completely agree that customers prefer a choice of channels and indeed need a choice of channels given the range of interactions they have with banks.  My interest is more that current research tends to ppint to consumers saying one thing and doing another, hence a bit of a paradox.

My suspicion is question bias in the research gathering methodology. Although I wouldn't use the terms "finsurgents & neobanks", I do agree that some of the research pointing to particular consumer use of channel is potentially biased by the agenda of the organisation that comissioned it!

Best wishes,

Alex

Hi Ketharaman, I fully agree, over-hyping the potential of big data has been a huge problem. There is a real problem that big data can't give answers any smarter answers than the questions it's asked!

There's also the related issue that there are answers that don't have much meaning (hence my interest in semantics). Your example with the middle initials for credit risk is really good one. A similar one from motor insurance is that "most accidents occur near home, therefore drivers are careless in a familiar surrounding". While that may be true, actually (& unsurprisingly) most cars spend most time near their home address, so statistically it's not a surprise that accidents occur where cars spend most time.

Hi Mark,

Thank you for the comment. I think retina recognition on mobile devices is very interesting - it's individual specific, believed to change less over a lifetime than voice (though research is still limited), potentially very secure and (at least with current technology) difficult to falsify. As device video capture capability improves retina or facial biometrics are likely to be a real option for ID&V.

Background noise and the lower quality voice codecs used by some mobile operators are all potential issues for voice biometrics. My recommendation, though, is the same for all biometric solutions and that it to have a business process that can manage exceptions and when the call goes through to an agent, that agent has the resources, skills & curiosity to securely manage the subsequent interaction.

Concerns I have seen from customers are around the impact of contact lenses, the device camera resolution and whether retina recognition works in an environment with an uncontrolled background. (All rather similar to voice biometrics concerns!). Obviously, not all of these are real concerns, but banks tend to be unfamiliar with this type of technology. The technical concerns tend be whether the retina authentication & capture is done 100% locally on the device (which might be vulnerable to hacking or spoofing but is responsive & works off-line) or whether it's done  by a server side authentication (which is more secure but is slower and requires a network connection before authentication).

Hope that helps,

Best wishes,

Alex

Ketharaman, you make an excellent point and I understand your frustration completely.

Remarkably, a number of UK banks still manage things like overseas money transfers as an exception type of transaction (i.e. one that most of their customers will never make) and so manage overseas payments transactions internally by things like fax.

As a result, areas that should offer huge potential for growth (like remittances) and for margin (like large FX transactions for overseas/ retirement asset purchase) are neglected. To make money in these areas requires efficient processes and too often the large retail banks have not invested enough in internal process improvement for these new areas to be profitable.

Instead, as you found, the banks are not interested in these growing payments markets but instead are trying to push products in a very traditional way. Meanwhile, as you very rightly point out, newer more agile competitors are innovating and winning these markets.

Best wishes,

Alex

I really appreciate all the comments, so thank you for your thoughts.

I think a lot of the issues you highlight are covered in the post I wrote today "Abbey- did an IVR survey lock out a customer's account?". This is a good example of offshore, IVR and customer disatisfaction all coming together and resulting in some very bad PR for the bank concerned.

I hope that now credit has become so much harder to obtain, banks may start valuing customers (especially depositors) more and stop viewing them simply as a cost. Even if it's not for a good reason to improve service, I'm not sure that this is a time for banks iritate customers/ voters!