Archive for the ‘Consumer trends’ Category
Tom Groenfeldt on techandfinance.com highlights four predictions in a recent Gartner report, that are quite provocative. Taken together, they suggest mammoth changes to Banks as we know them.
Click through for Tom’s take on them. I expect I will do same later.
“By 2010, social-banking platforms will have captured 10% of the available market for retail lending and financial planning.”
“By 2010, 10 percent of banks’ revenue from retail payments will be supported by competitors such as PayPal.”
“By 2010, U.S. banks will start shutting down their full-service mobile-banking channels.”
“By 2011, centralized retail core banking applications will cease to exist in at least 20 percent of banks worldwide.”
Fascinating research and conclusions picked up by Paul at Finextra. The implication is the shift towards greater self service by people for financial services that previously would have required advisors or brokers.
Winners are price comparison sites, and advice from friends and family.
But if consumers aren’t turning to their bank for financial advice, where are they going? Online price comparison Websites are one obvious source of information. The other is friends and family. This change in consumer attitudes helps explain the success of a new generation of non-bank social platforms such as those operated by Zopa and Prosper, and Finance 2.0 upstarts like Wesabe and Mint.
Its way to early for predictions, and my point is not politics.
With that disclaimer, something I am watching is how Obama embraced internet early. Edwards tried but if was fake. Clinton I would imagine has ‘people’ who do ‘that’.
Couple that with how the pundits and polls got Iowa wrong. We could be observing the thin edge of a real change that traditional measurements are [again] missing.
Senator Obama soundly beat Senator Clinton in the Iowa Caucuses last week. And he maintains an impressive lead in most online statistics as well. He has 212,000 MySpace friends, 50,000 more than any other candidate (and he’s added 5,000 more in the last day or so). He won the MySpace New Year’s Poll with 46% of the Democrat vote. Senator Clinton took second with just 31%. People who live in Iowa and New Hampshire are visiting Obama’s website more than any other candidate.
Jim does a nice review of iphone compatibility.
But the hands-down winner is Bank of America, the only top-20 U.S. bank with an iPhone-optimized homepage.
While the runners up probably work reasonably only because of smart design, BofA has optimised their site to recognise the iPhone and display appropriately. This suggests they are thinking about target markets and taking that thinking into their internet channel. Smart.
In what I believe is a first, KeyPoint Credit Union, based in Silicon Valley introduces a new mobile service via FaceBook. In effect, this uses FB as a single sign on vehicle.
KeyPoint CU – which serves technology companies including Apple and Google – is the first financial institution to launch account access via Facebook.
The application provides customers with secure, one-click access to online bank account information. The CU says all account information data is encrypted with a minimum of 128 bits and no user data is stored on the Facebook servers.
While I applaud the concept, sign on is as good as the weakest link, and FaceBook’s log in would be easily phished. Time for caution on this until its better understood, or at least till I better understand.
Nice thoughtful read for the weekend. Joe talks about, and provides examples of how we are moving to new age, beyond the Information Age.
We move from one great age to another when, as a Society, we let go of the trappings of the previous age and begin to define ourselves in new terms, absent the defining elements of yesteryear. We no longer think of ourselves as farmers or factory workers… the Information Age has knowledge workers, and we largely define ourselves by the information accessories in our lifestyle: our iPod, our MySpace page, our blog, when in previous ages it may have been our car, our company, or our home town, livestock or crop.
No-one ever asks are you online, whereas, 10 years ago that was a common question. No-one asks a business if they have a web site; they simply must.
Joe leaves it open as to what age we are moving towards, but suggests the clues like in information overload. O’Reilly Radar, suggests an expertise age, and readers largely debunk that view. Wikipedia defines the information age as one where information had value through scarcity. Information is no longer scarce, and is broadly speaking, free and transparent. We each seek ways to manage information, and contacts within our own context and needs.
One thing I would observe, is that rather than creating apparently isolated people staring at screens, the information age has, and continues to, dramatically redefine how we interact, and keep in touch. It has redefined friendship, acquaintances, colleagues, and business relationships, into networks as we each define them, giving us that horribly obtuse expression, ‘Social Graph‘, which it turns out is equivalent to Social Network. The Information Age has also broken down barriers, and borders; it has made the world smaller.
So if we are entering a new age, perhaps, it is something to do with personalisation of networks, allowing us to create our own exclusive view of the world, and how we choose to interact within it. Its kind of a, me age.
What do you think?
Great article in this weeks Economist on algorithms. The theme lies in the mind numbing amount of data avalable now, and how mathematics can help solve complex problems, varying from the UPS driver and plane scheduling to Tesco product targetting.
It works by assigning attributes to each of the products on Tesco’s shelves. These range from easy-to-cook to value-for-money, from adventurous to fresh. In order to give ratings for every dimension of a product, the rolling-ball algorithm starts at the extremes: ostrich burgers, say, would count as very adventurous. The algorithm then trawls through Tesco’s purchasing data to see what other products (staples such as milk and bread aside) tend to wind up in the same shopping baskets as ostrich burgers do.
Products that are strongly associated will score more highly on the adventurousness scale. As the associations between products become progressively weaker on one dimension, they start to get stronger on another. The ball has rolled from one attribute to another. With every product categorised and graded across every attribute, Dunnhumby is able to segment and cluster Tesco’s customers based on what they buy.
Relevance to Bankwatch:
Banks have enormous amounts of data, including transactions, merchant usage, and products used, both at their own bank and at other banks (from the transactional analysis). Instead of the usual demographic analysis, analytics to solve for patterns within that data could be illuminating, particularly if it is shared with customers, to help them understand themselves, and their own behavioural implications.
Interesting subtext to the sub prime crisis, as credit card companies, target those same sub prime mortgage borrowers.
For credit card companies, the subprime market is a profitable one, analysts and consumer advocates say. Subprime customers, charged higher rates than those with better credit, are more likely to make minimum payments, maintaining balances that generate interest revenue for card issuers, consumer advocates said.
This slide show from Raimo van der Klein is interesting as it tries to capture some of the trends in how people purchase things, and the response from the smart retailers. The theme lies in the statement ‘give it away’, and shifting from pushing product to pulling customers, by working with them. The slide from the deck captures the essence.