Archive for the ‘Consumer trends’ Category
Mike Arrington is one opinionated blogger that I don’t refer to much, but he makes an excellent point here. He posted a complaint abut his ISP on Twitter, and immediately got a call from a Comcast executive.
And this brings me to the point of this post. Within 20 minutes of my first Twitter message I got a call from a Comcast executive in Philadelphia who wanted to know how he could help. He said he monitors Twitter and blogs to get an understanding of what people are saying about Comcast, and so he saw the discussion break out around my messages.
There is much talk in blogging circles about ‘ the edge’. People refer to themselves as edglings. Innovation happens at the edge. Nice summary of recent thinking from JP here, and Stowe, one of the originators here.
Being on the edge is simply using new technologies to communicate faster, more real time, and in ways that are just plain, convenient. Its not for everyone, its a niche, but one quote from the JP post resonates …. “Innovation happens at edges”.
If in any doubt, here are examples of Banks being mentioned in Twitter, one edge tool. If you are in the PR dept and have not heard of or your dept is not actively monitoring this stuff, time to make changes.
Some quotes from those searches:
|stuartma : @kaleemux
BMO. & they may well have gouged me- I don’t know if I could’ve
gotten more elsewhere, but that US:C$ was exactly 1:1 was neat &lt;&lt; (2008-03-22 17:53:25)
: Amazing how a valuing – not writing down ABCP – solved BMO’s problem.
If it’s so simple everyone should use this accounting fiction. &lt;&lt; (2008-03-20 23:07:23)
pkedrosky : @stuartma giving a speech/talk/thing at a private event for bmo in toronto. &lt;&lt; (2008-03-25 16:53:37)
reiver : “RBC thinks loonie is headed below 90 cents US” http://tinyurl.com/55ucue &lt;&lt; (2008-04-04 10:57:38)
: my brother the systems guy working for RBC (really big company) does
not get this online stuff. He’s 50 and I’m older but not in chip yrs &lt;&lt; (2008-04-02 16:12:57)
: would like to thank RBC Auto Insurance for rewarding good drivers
with increased rates, I always love paying into the because-we-can tax.
&lt;&lt; (2008-04-02 10:50:34
rawdrigo : f*****g bank of america jacked my apr like 20%. &lt;&lt; (2008-04-06 15:09:13)
SpencerC : holy crap! in seconds, i got a new card shipped to me, how easy is that? i love bank of america coustomer service &lt;&lt; (2008-04-04 22:15:52)
When I started this particular blog, my impetus was the lack of creativity amongst Banks in getting beyond automation of traditional transactions, and sticking them online [online banking].
Introduction Saturday, 28 January 2006
Welcome to Bankwatch. The purpose of this blog is to monitor banks around the world for their online capabilities, and the strategies they are adopting with online. Consumers are web savvy now, and most banks aren’t, so I will point those out, and I will also recognise best practices too.
It might be useful to just take a look and see what progress has been made in just over two years. My general sense is not much progress amongst Banks, but enormous progress amongst non banks challenging the status quo.
Whatever progress, is now laid against the backdrop of threatened new regulation in UK, North America and others to place a cost on the political consequnces of bailing out Banks, and in particular investment banks who until now have been largely left to live and die on their own sword.
Disruption within financial services will not happen simply. The topic of regulation is always controversial, being one that Governments immediately leap to because it offers the pretense that they are making things better, even though the current credit crisis that the Banks are sufferring is one that occurred despite existing regulation and accounting guidance on the topic of off-balance sheet lending.
Banks are running scared at the moment, lacking trust to lend to each other, and simultaneously being concerned about revenue and expense growth at precisely the time they need increases in the former, and decrease the latter.
Yet customers are evolving and will continue to expect more and better online self service from Banks. No amount of denial can alter that. More and better in quantity, and quality. Services and offers that are more engaging, and work the way customers want to work.
Nothing about this time offers promise for customers from Banks. There is much promise in new startups, and we have the regulation cloud right in the centre of this epic battle.
So which Banks [or Credit Unions] show signs of life, and look to break out of the pack? That’s my question de jour. As I develop this meme, what suggestions and examples of Banks that ‘get the web lifestyle’ can you offer? [In particular Europe & Asia where language makes it harder for me to source.]
Consolidation of Banking was a genuine surprise to me. I expected this to be dry and academic. However the opposite turned out to be the case.
The book covers the history and events in North American banking since the ’30′s and here is where the surprise came in. It details the changes and the reasons for the changes. It covers in some depth the impacts of foreign Banks, in the US and globally. The global aspect caught my attention, and this differs from the usual US centric view of the world in the US.
The result is a good view of the mechanics of what drives banking, ie shareholder value, and results of reaching a certain level within domestic markets that curtails growth opportunities, and leaves foreign expansion or break up as the only two available strategies to make a big difference.
Some somewhat random notes I took away. There are tons of stats and thinking behind every one of these:
- 5 banks own 50% of the US market
- European Banks got to that scale within their own markets earlier, because there were fewer of them within their relative markets
- big 5 US names:
- Bank of America
- JP Morgan
- Wells Fargo
- largest number of branches: Royal Bank of Scotland
- largest asset base: HSBC
- countries with largest Banks in the US: UK, Japan, Canada, Spain, Holland
- demographics and acceptance of ‘remote banking’
- increasing costs associated with large branch networks
- large banks focussed on increased growth from own customer base
- globalisation, and new thinking from foreign banks
But the one takeaway from the ‘whats next’ conclusion section was this. The above factors are ongoing strategic drivers, but nothing drives change in banking more than economic bad times. The immediacy from bad times, leaves management no choice in the face of fickle and impatient investors.
We are entering those times in a very special way in that all banks are affected by the credit crisis, and some severely. There will be recessionary impacts on customers too. We can expect big changes in Banking ownership, and it will likely have a global context. It will also have a distinctly remote banking (Danielsons expression) aspect. I read that as internet … yes ATM’s too, but some distinction using internet is expected. ING have promoted a whole industry around high interest, non branch savings accounts, but surely such a product design approach is limited in strategic value, particularly to the current players.
Relevance to Bankwatch (my take):
We are entering a perfect storm of converging influences:
- economic crisis (losses) driving lower shareholder returns in Financial Services
- permanent demographic shifts, bringing acceptance of internet, and web/ mobile lifestyle; translation – seeking something better
- maturation of ‘industry strength’ web tools, and capabilities (web 2.0)
- unlimited creativity of web based companies many of whom are increasingly seeing Financial Services as the next beachhead in industrial disruption
An easy read, and valuable reference for every bankers office.
[Note] I was fortunate enough to get a copy this book, courtesy of Carol at Danielson Capital. The Chairman is the author. Thanks Carol.
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.