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America has very low tolerance to friction compared to RoW. Not surprisingly, as I'd highlighted in Mitigating Fraud Does Not Pay The Bills, the migration to EMV is meeting with severe resistance.

@João Bohner: TY for your agreement! But I must admit that there are times when I've asked myself the same question that forms the title of this post. I've described my experiences and recommendations on my company blog "Can Something Be Too Frictionless?" (hyperlink removed to comply with Finextra Community Rules but this post will appear on top of Google Search results when searched by the title).

Just came across "Disruption is not a strategy". The author Jerry Neumann explains Uber's approach succinctly: "The new market was available because Uber first ignored, then lobbied to change, regulations that made that market seemingly unavailable to new entrants."  

Good post. This totally resonates with my experience against a very similar background.

Some parts of financial services have indeed mastered innovation. As I highlighted in Why Banks Can't Transform Legacy Applications - Part 2, "...banks have proved their innovativeness by launching ARM, CDO, CDO2, CDS, MBS and a slew of highly innovative structured financial products that have made a lot of money for them". If some other parts of financial services haven't been as innovative, maybe it's because there is no business case for innovation in those areas? As I pointed out in my blog post, "...I've heard C-level bank executives say this, retail and commercial banking are fairly simple businesses that don't need to be overcomplicated by innovation for its own sake."

"clearly something is amiss". Clearly. Blaming everything else instead of finding the root cause of the problem is what is amiss, IMO. People who check account balance on mobile are already banked. I never understood how USSD or iOS or any other mobile technology that shows account balance will help convert unbanked population to banked. 

Calling B.S On Banking The Unbanked

But that's only me. This won't stop fintechs from claiming that Financial Inclusion measures will be a big hit if they're carried out on a native app.

Nice post. I agree with most of your recommendations except the second part of your sentence "The most technologically advanced or frictionless experience might not best serve the needs of the customer.". The way I see it, frictionless WILL ALWAYS serve the needs of the customer almost by definition. Just that frictionless needs to be viewed more broadly as an attribute of the customer journey, not of a piece of software or hardware, no matter whether any technology is involved in facilitating that journey. For example, Frictionless can be in how a bank staff interacts with a branch customer and how a paper form needs to be completed. In fact, in my blog post How Banks Can Increase In-Branch Sales, I'd specifically highlighted ways by which branks can increase in-branch conversion rates for their offers by delivering a superior CX without really needing much technology. 

Interesting post. 

Just a couple of days, I asked SQUARE how many customers really abandon a purchase because merchant does not accept credit cards. You can find the tweet thread here:

https://twitter.com/s_ketharaman/status/757657019230846980

I've no truck with your boat merchant (pun unintended) but is it possible that (1) he does not accept credit cards because he finds the 1-2% MSC too high or (2) he cannot accept credit cards because he hasn't found any bank willing to extend a merchant-acquirer account to his business? 

Not sure if SQUARE has entered UK but, as I'd highlighted in this blog post, other mPOS providers may not be able to help a merchant stuck with issue #2 above. 

According to another recent Finextra article, "India is set for a digital payments revolution, with the value of transactions set to hit US$500 billion by 2020, ten times its current level". 

According to this article, ATM count is expected to more than double from 220K units in 2015 to 500K units in 2020.

In a growing economy, rise in cash does not have to mean fall in digital payments. There's room for both to grow.  

Likewise, channel mix doesn't have to be seen as branch versus digital channels.

It all depends upon economic growth. This dualism may not be evident in stagnant economies.

Any idea how Citi restored its network and how long it took? I'm assuming the affected networks were based on homegrown systems and hosted internally.

The modern architecture using cloud, web services, app stores, third party APIs, and so on, has surely brought down time-to-market for new systems. But it has also increased the number of critical pieces of information required to run and change systems (e.g. app store passwords, API key, etc.). Furthermore, such information is generally known only to a few people in the team. As a result, the modern architecture can increase the number of people who can disrupt systems. What's worse, since these people can be employees or vendors or anyone in a modern architecture’s expanded “supply chain”, it can become harder and more time-consuming to recover from an attack, whether caused by a disgruntled or suboptimally-trained person.

To illustrate this with a recent example:

A customer's ecommerce system recently went down when an employee (intentionally) deleted a few duplicate records in the database without knowing the full impact of his action on the overall system. Had the system been internally developed and hosted, it would have taken 5 minutes to solve the problem and bring the website back up. However, the system had used many elements of the aforementioned modern architecture and it took 4 days to solve the problem; that too, only because the company was able to locate and secure the cooperation of an ex-employee involved in developing the system a year before. Needless to say, the downtime caused a financial loss, not to mention reputation damage.

Just to be clear, it’s not my intention to discourage banks from migrating their systems to modern architectures. By bringing this up, I’m merely trying to throw light on additional factors that banks may need to take into account in their migration risk and mitigation strategy.