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"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.

Mobile banking apps belong to said banks and iPhone belongs to Apple. Fighting to get the former into the latter is between banks and Apple. With respect to bank transaction data, the data belongs to both bank customers and banks. Involving the regulator to push banks into sharing this data without customers' explicit approval undermines customers' rights and vitiates the fintech's claim that it's doing this in the interest of the customer.

I just finished reading this McKinsey article: More than digital plus traditional: A truly omnichannel customer experience. Old or new "Without question, (customers) are (demanding digital). But not to the exclusion of other channels, which remain critically important." "as much attention (and fear) as Amazon may generate among traditional retailers, as of early 2016 about 92 percent of retail sales in the United States—the company’s home and largest market—were still taking place in person." For mortgage application as an example, "only branch channel retains significant percentage of customers throughout process". It totally resonates with what I said in Secret Of Survival Of Bank Branches: Branch serves mainly demand generation and sales. If Lloyds Bank has reached a stage where its market is saturated or it otherwise doesn't want to sell too many new products, then it has very limited need of branches and closing them is the way to go. But if that's not the case and Lloyds Bank expects that, just as a customer prefers to check balances on mobile, they will also buy a new product on a digital channel, it may be in for a rude shock by shutting down banks.

Currency note is the only payment instrument on which a central bank can guarantee transfer of value between payer and payee in realtime. Kudos to the central bank of Sweden for asserting this legal right. 

We used to go through all this song and dance to market our and our customers' mobile apps in the past. Lately, it has become faster, better and cheaper to sign up with a Pay-per-Install / Cost-per-Install (PPI / CPI) service provider for doing app marketing on our behalf.

"the data suggests that this is not because customers are becoming estranged from their banks, with the overall customer interactions across channels rising."

There goes all the predictions by finsurgents that traditional banks suck at digital, customers want digital, customers will exit banks in droves, neobanks will kill traditional banks.