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Banking is the only industry I can think of where the guy who gives money to it (account holder) and the guy who takes money from it (borrower) both expect to be treated as customers! This poses banks a unique set of customer engagement management challenges that are absent in other industries. For example, no department store I know is obliged to send a Christmas hamper to every supplier.

I see this happening already, at least in India, where a number of leading IT companies - including one of my ex employers - have set up innovation funds to spot and nurture tech startups. But the cultural and integration challenges are much greater than in banking. IT is a support function in banking and the core business of banking doesn't feel alienated by a tech startup. However, things are much tougher in an IT company whose core business is IT and established fiefdoms within companies see startups as contributing too little to revenues and too much to share of buzz.

@BrendanBurge: Agreed. Last week, FORTUNE magazine has cited M-PESA in naming Vodfaone-Safaricom to the #1 position on its new list of 50 companies that have changed the world. I'm wondering if this accolade should change our views about trust / security!

Hi @LaurenceLeyden:

TY for your reply and kind words. Maybe it's because I'm "very perceptive" - your words, not mine! - I tend to believe that the problem with nonbanks is quite the opposite. IMO, they're too drunk on the Kool-Aid of technology, agile etc. and are completely forgetting the business process they're trying to address. Just one example: With all their newfangled technology, snazzy UI, agile, fail fast, blah blah blah, all that many MObile Money Management Apps do - or advertise that they do - is to help people save $1 on a $4.5 coffee. Is that earth shattering or what? How many banks will they kill with that “business process”?

In the course of my work, I've found that most challenger companies assume that tech-mediation - aka push a button on a mobile app - is be all and end all of what they need to do. They simply don't understand that they stand a chance of disrupting banking only by solving a serious business problem that banking is not already solving and do it profitably. Their VC-funded runways will last another 3-5 years, which is why I commented that, if they don't disrupt banks in 3-5 years, they won't be around to disrupt banks after 10-20 years.

Wonder if I should further push out my prediction for when cash will be dead. 

The Death Of Cash Is At Least 190 Years Away

TY @ChrisHigham. That said, any idea what %age of BACS transactions below FPS limit have migrated to FPS?

While I'm not advocating wastage, "shelfware" - as this would be called in the software industry - @ 3.5% (3.2M/91.5M*100%) of IT budget is not exactly abnormal. Full Disclosure: I'm an ex-Oracle employee. SAAS is only an ostensible remedy: Beneath the veneer of its "pay for use" pricing model, in actual practice leading SAAS vendors (e.g. SFDC) insist on upfront contracts for a minimum of 12 months regardless of whether the software is really used by the contracted # of users during the contracted period.

@ChrisHigham: The VocaLink exec who responded to my comment on Bacs busts 100 million payments a day mark seemed to attribute the continuance of BACS to lack of support of Direct Debit in FPS. TY for clarifying that FPS is costlier than BACS. That makes more sense in explaining the longevity of BACS. (I was under the impression that FPS is free!).

@DavidGodfrey + 1. Like I pointed out in my comment on Bacs busts 100 million payments a day mark, my employer switched to FPS back in May / June 2008 but most companies still seem to use BACS for payroll. This definitely signals a huge deficit in marketing by banks of their new products / services (or do they have some strong vested interest to maintain the status quo?).

When I was involved in implementing FPS for a Top-5 UK Bank, we felt the same i.e. people want immediate payments. While FPS has gained momentum, I was puzzled to read recently that not only has it not managed to supplant BACS but BACS volumes have broken records recently.

Bacs busts 100 million payments a day mark

Keen on knowing your take on this.