Community

Apple iTunes is a merchant. The millions of cards it has on its file are issued by banks, not Apple. It certainly needs banks to function. Its great UX might sometimes tempt one to buy everything from it instead of facing the friction posed by many other sites - etailers and banks alike - but, unfortunately, one can only buy from iTunes what Apple wants to sell on iTunes.

Even if it braved regulations to enter banking - unlike Google which cited regulation to give up on similar plans - I doubt if Apple would bother doing so: As a tech company, it enjoys better valuation compared to banks, so becoming a bank wouldn't be in the best interest of Apple's shareholders.

Talking about SQUARE, it disrupts POS as you've rightly pointed out. But, in that capacity, it should worry NCR, Verifone and other POS manufacturers. Whether a transaction happens on an NCR POS or SQUARE POS, the bank that has issued the credit card used in the transaction earns the same interchange fees. In fact, before SQUARE, banks had declined merchant accounts to many sellers on account of their low transaction volumes or high risk profiles or both. Now, with SQUARE coming along and taking on the entire merchant risk, these merchants can now accept credit cards which they couldn't before, and banks can earn more interchange fees from their card transactions without bearing any additional acquisition risk. Seen this way, banks should cheer SQUARE along and not be worried about it!

Whether the payer uses Apple iTunes, PayPal, SQUARE or any one of a plethora of mobile wallet offerings, most payments today continue to happen on card network / ACH / RTGS - i.e. "banking rails". Therefore, banks continue to firmly occupy their corner of the four-corner payment model and the newcomers don't threaten their relevance as banks. A couple of years ago, Boku, Zong and other GenY Mobile Payments (GYMPS) seemed to threaten the position of banks by entirely bypassing the banking rails and instead using MNO rails for payments. With many GYMPS recently announcing support for the addition of bank-issued credit cards and checking accounts as additional source of funds, I think that threat has also largely receded.

@Darren N:

Thank you for your reply.

I agree that SOA provides the technology to let banks remain impervious to their internal silos. However, I don't see technology as the determining factor here. From a business standpoint, given the current org structures and bonus policies, why should banks want to ignore silos?

During the period between the preceding comments, I went thru' an experience that I must share since it highlights yet another barrier in the way of silos coming down: I have a checking account and a fixed deposit at a certain bank. I wanted to open a pension fund account in the same bank branch. According to regulation, I had to go thru' a fresh KYC process. What's worse, monthly checking account statements from the same bank didn't qualify to prove my name and address since, as per regulation, KYC can only happen with third-party documentation i.e. documentation issued by another bank / utility / MNO. I'm sure the regulators have a good reason to formulate such policies. However, it can't be denied that they hamper banks from breaking out of silos even if they (i.e. banks) wanted to.

IMHO, there's a long way to go before banks face clear and present danger from nonbank financial services providers. Many of us will load our PayPal Wallet with a few dollars to buy a coffee or a sandwich. The bolder lot amongst us won't mind using our spare cash to make a few unsecured loans on PROSPER or ZOPA. But, how many of us will move our entire life savings from a bank to a mobile wallet (even assuming it was possible to do so) or lend it out on a nonbank lending website? I could go on with more examples but I hope this shows that the threat posed by nonbanking FIs to traditional banks is highly overrated.

I look forward to the day when silos come down and I can enjoy a superior customer experience while dealing with banks. However, I recognize that there are far deeper issues at play here.

Great list, thanks!

From personal experience, we can vouch for the following tools mentioned in your list: Optimizely, WordPress, SlideShare, Skype, Google Analytics.

We also use 1daylater and wouldn't hesitate to recommend it for inclusion as an additional product in the timesheet / timetracking category.

Not able to find the 'document' and 'spreadsheet' categories in your list. While Google Docs might work fine, we use Word and Excel respectively.

@DirkK:

I recently shifted a lot of my blog reading from a laptop to a smartphone. In the context of a blog that's mobile-optimized, let me make a few observations and conclusions that you might find useful: 

1. For some reason, what used to take me 45 minutes per day to read on a laptop only takes 15 minutes on a smartphone.
2. Having shifted to a smartphone, there's no way I'll ever go back to the PC to read this blog.
3. In the past two weeks, I haven't seen / clicked a single ad on this blog. Whereas, on a PC, I used to click at least 4-5 ads every day. I do miss some of these ads but this change in behavior could make a lot more difference for blogs dependent upon Google AdSense and other ads.
4. Needless to say, commenting is lot easier on a PC than smartphone.    

At the risk of jumping to conclusions, it would appear that mobile-optimized versions of blogs are great for the reader but web versions are more enriching (pun intended) for the publisher and the community. 

PS: BTW, I'm one of the 137 users of Finextra's Android App. I just installed it a couple of days ago.  

ICICI Bank has pushed the envelope on technology adoption, as I'd written in this and this Finextra blog post. But half its Facebook App revolves around cheque books and such 'old-age' products and the other half certainly doesn't permit P2P payments via FB. AmEx Serve's claim to uniqueness with such an offering faces no challenge from ICICI Bank! As for PayPal, I'd be happy to learn more from people who've actually tried it.

While I've always maintained that there's a huge need for banks to reduce the friction involved in their current crop of ePayment products, I've never felt that they could be disintermediated in this space by the likes of Google, Facebook or PayPal. Looks like the first purported challenger has withdrawn and the second one is urging caution. The regulatory ax has already come down on the third in India and I hope it's just a matter of time before it will be cut down to size in its primary markets like USA. I'd recently commented on Finextra that there's a difference between payments and shipping a parcel or booking a plane ticket. This announcement ought to make people realize that, while Internet Search is hard, payments isn't easy either. 

When Alliance Lite was launched in 2008, I distinctly remember reading that no hardware was required at customer premise except USB token. At the time, I used to work for a company that was - and still is - involved in selling conventional SWIFT-connectivity solutions that demanded lot more hardware and software than Alliance Lite, so I'd followed the 2008 announcement keenly. The second paragraph of this article describing the 2008 version also mentions no other hardware than USB token. I wonder if this new version is simply an attempt by SWIFT to jump into the "cloud" bandwagon. If yes, that'd be a pity: The very first time I'd heard about SWIFT some 25 years ago, it sounded as cloud-based as anything else does today, just that access to the cloud happened via dedicated leased lines rather than Internet. 

@JimM:

Interesting post. I'm not sure how Cardlytics and others will address another seemingly important factor, namely, relevance of offers with respect to the point of purchase intent ("time relevance"). 

For example, I might've spent $10 at McDonald's last month but I'm likely to respond favorably to an offer from Burger King only when I want a burger - that is, only when the Burger King offer has time relevance to me. When I do want a burger - at the point of having purchase intent - I'm more likely to Google for 'burger deliveries' and click on one of the organic or inorganic results / ads than remember seeing an offer from Burger King the last time I'd logged on to my Interenet Banking portal to (say) view my last five transactions. 

It's no secret that offers from GroupOn virtually belong to the much-maligned "spray and pray" category. But, by making heavy use of Google AdWords and other techniques, GroupOn's offers get displayed as online ads just as people signal their purchase intent by searching for something. GroupOn's high degree of time relevance might be contributing to its runaway success despite all forms of questions being raised about its business model. 

With Cardlytics and others, since their offers are personalized, they can only be shown inside 'walled gardens'. This makes them invisible on search results and takes away an important tool for them to become time relevant. Can they manage to add time relevance to their offers some other way? Or, will their offers' razor-sharp nature overcome their lack of time relevance? I'd love to hear your thoughts.

@Keith R:

Thank you for your point-wise reply. 

I meant hard-copy versions when I said that eBills / eStatements are not getting accepted for KYC. Using soft copies is a total non-starter. At least in India, while submitting copies of Proof of Identity, Proof of Address and other KYC documents, we often need to show originals of documents for verification (although we get to take them back after the verification is done). eBills / eStatements printed on black-and-white printers simply don't work! I remember a similar procedure in UK as well a couple of years ago, although things could've changed since then. 

I agree with you that addition of graphs, downloadable data file, etc., can fuel paper turn-off. However, when it comes to payments, 1-click mobile payments enabled by scanning QR codes printed on printed bills is very appealing. I believe this technology will disrupt web-based payments in the coming years, just as the latter began to disrupt brick-and-mortar payments around 5-10 years ago. Of course, such a solution can equally well be implemented on eBills also with minor modifications.

Thanks for pointing out Adobe Acrobat X - although I've come across Nuance and ABBY supporting highlighting and annotation features, I never knew about this new version of Acrobat Reader. I've already installed it and I agree that it solves one major area of friction related to highlighting and annotation.

I'm glad we're making progress, getting rid of one friction at a time!    

ROI calculations are inevitably based on the assumption that recipients of eBills / eStatements initiate "paper turn-off". From personal experience as well as from analyst reports, I know that this assumption is far from true. The percentage of people insisting on both printed bills / statements and eBills / eStatements - so-called "double-dipping" - is quite high.

eBills / eStatements still pose a lot of friction for the customer viz. (a) Insistence by some billers on passwords to open eBills / eStatements where recipient has no control over the password (in such cases, I prefer to "pull" / view eStatements when I use Internet / Mobile Banking for other reasons) (b) eStatements are not accepted as proof documents for KYC purposes (c) Inability to mark and annotate eStatements; etc.

Until a combination of business processes and technology eliminates these areas of friction, "double dipping" is bound to undermine the ROI of eBilling / eStatements technology. More details can be found on my following Finextra post and comments.