The Bankwatch

Tracking the consumer evolution of financial services

Archive for the ‘Uncategorized’ Category

UK: 20% of shops will never be re-occupied

More on demographic and perhaps systemic shifts driven by internet and ecommerce.  To suggest that 20% of exiting shops will never be re-occupied is a staggering statistic.  Its not quite Detroit level stuff, but we are in a similar trajectory.


Demolish empty UK shops, say retail experts

A fifth of empty shops in Britain will “never be reoccupied” and should be demolished or converted, according to the Local Data Company.

The picture above is not uncommon in likes of Dundee which used to be a manufacturing hub that buzzed 30 years ago.  No more.  All across Norhern England the story is similar.

More from the FT piece.

Retail parks in the West Midlands have the worst rate of long-term vacancies, with almost a third vacant for more than three years, while Skelmersdale in Lancashire has one of the worst-hit high streets. Almost 80 per cent of high street shops in the town have been vacant since at least 2011.

I dont think we are seeing this in North America yet.

Written by Colin Henderson

February 4, 2015 at 01:34

Posted in Uncategorized

Millenials will form 50% of the global workforce by 2020 – PwC

More on the shifting demographics from PwC.

Millenials at Work

Millennials matter because they are not only different from those that have gone before, they are also more numerous than any since the soon-to-retire Baby Boomer generation –millennials already form 25% of the workforce in the US and account for over half of the population in India. By 2020, millennials will form 50% of the global workforce. 

Written by Colin Henderson

February 2, 2015 at 09:46

Posted in Uncategorized

OmniChannel vs Strategy

Chris Skinner summed Omnichannel perfectly suggesting it is “so last century, please delete it”.

Knowing Chris there is only so much dry sarcasm in that statement.  For me I have no idea why, when when 10 years ago we looked at branch, ATM, telephone and internet banking and we called it multi channel banking, we are now we are going into convulsions in attempts to define OmniChannel banking.  We added what, mobile, and now we have to shift to another word?

The Financial Brand is still falling into that trap I hate to say when they get sucked into the argument with  “Digital and OmniChannel Banking remains elusive”.

“Engaging clients … ”, delivering a customised …”, “big data …” … these various definitions really miss the point.

Any bank whether nuevo or traditional has multiple considerations relative to customers, technology, employees and processes.  Its much more complex than bland statments such as “consistent customer experience” et al.

If engaging clients is the strategy (not a bad plan btw) then that is the strategy. Next comes the tactics to implement, which will define that strategy, and that will require considerations across HR, technology, processes and channels.  I don’t see how the concept of OmniChannel helps in that discussion.  It is going to depend on the current deployment of the bank and where the bank wants to get to.

If you are a Bank with 1,200 branches then the decisions regarding channels are radically differnet than a bank starting from scratch.  Those are two extremes chosen to make the point that strategy depends on your starting point.  Even a neuvo bank initiated from within an existing bank still has strategy dependencies from within the parent bank, even when the neuvo bank is described internally as separate.  Shareholders see the broad entire picture and care little for independent internal new ideas that are not connected to the big picture.  In simple terms, the concept of cheap transactions means nothing if the baggage of old costs are not displaced.

This goes back to the 1995’ish predictions of certain consulting groups that internet transactions cost 1 cent versus branch transactions of $3.50.  Those statistics make us all cringe now because a transaction online doesn’t displace any costs in a branch.  It is actually an incremental cost.  That’s just one glaring example of the challenge in determining channel strategies for a bank, and OmniChannel is not the place to begin.

All this to say, lets not kill ourselves defining a stupid word such as OmniChannel.   Strategy is the place to begin, and that will produce the right considerations.

Written by Colin Henderson

February 2, 2015 at 02:08

Posted in Uncategorized

Signs we are in the midst of a demographic shift

Looking backwards we can readily see the impacts of large demographic cohorts on economy, fashion, trends, and yes – banking.

Past examples:

  • housing value growth
  • stock market growth
  • cruise ship growth
  • fast food growth
  • music and radio genre rise and fall

Lately I have been sensing we are in the midst of another big shift from the Baby Boomer cohort.  That cohort is age 51 – 69.  That would place them in the stock market/ cruise ship group.  Despite being the largest cohort, their income is flat, savings flat having already largely inherited from parents, and they are not going to significantly create new trends, rather will continue what they have been doing.

The cohorts that will move things and shape new trends are the Millenials (Age 18 – 34) and the Gen X (Age 35 – 50).  They are in their income growth years, bring their cohort beliefs, expectations and fears, and they will shape the next 20 years.

Some examples I have observed recently:

  • Q107 Classic Rock this week advertsiing that all rock is classic rock.  Signs that the Led Zeppelin generation is not listening anymore.
  • McDonalds in trouble:  Millenials have higher expectations, and are not attracted to Ronald McDonald.  This could come back as the large cohort Millenials get married and have kids but thats 10 years off.
  • Apple and Samsung growth:  the conversion to smart phones has been immense and relativley instant.  Its hard to imagine that smart phones only arrived in 2007, and didnt get past effectivley beta until 2010. It should not be a surprise that Apple iPhone growth is growing exponentially given the growth of the Millenial cohort, supported by the sceptical Gen X, but it won’t be forever as the Millenials appetite for smart phones flattens out.
  • Resurgent interest in guys fashion, from striped socks to the Bieber bob.  This is a stark contrast from Boomers with Levi’s and army jackets.

Relevance to Bankwatch:

The examples are incidental.  The point is that a large cohort has signifcant economic and beahvioural impact that reflects in everything from purchase patterns to banking.  Its essential we understand not just the design of a mobile website, but the thoughts, beliefs and needs, which may not be what we expect.

Written by Colin Henderson

January 30, 2015 at 01:01

Posted in Uncategorized

iPhone sales drive Apple to new records

Written by Colin Henderson

January 28, 2015 at 00:32

Posted in Uncategorized

Remebering 2008 and how little things have changed; World Economic Forum 2015

I have been taking in a fiew WEF disucssions and one I did enjoy was the Posen/ Martin Wolf interview, and can recommend this for anyone interested in nations and the worlds financial systems.  Wolf speaks of three key risks within the financial system which intestingly are precisely those same risks from 2008.

  • D/E (Debt to Equity) of banks which on average sits in real terms (disregarding risk weighted) in the range of 20 : 1 or 25: 1.  Wolf makes the point that at that ratio consider how much loss needs to occur in asset value before the bank is work less than nothing.
  •  Derivatives:  These sit still at $600 trillion + or 9 to 10 times the value of the world economy.
  • Stablity breeds instability (Minsky:  Minsky’s Financial Instability Hypothesis (FIH)) or as stated by Lawrence H. Meyer :

“a period of stability induces behavioral responses that erode margins of safety, reduce liquidity, raise cash flow commitments relative to income and profits, and raise the price of risky relative to safe assets–all combining to weaken the ability of the economy to withstand even modest adverse shocks.”

Relevance to Bankwatch:

Back in those heady days of 2007/2009 I blogged at length on bank equity levels, derivatives and yet we are still here. Wolf spoke of the Minsky point above which we admits regretting only having read recently, and how this could be the real risk underlying where we are today.

Rather than repeat all those arguments, here is the story of Wachovia and the speed with which it disappeared in hours and days back in 2008.  This is a stunning sotry bearing in mind Wachovia was the fourth largest bank in the US.  Wachovia had assets of $802 billion and liabilities of $720 billion (approx).  Equity base $72 billion Form 10K Feb 2008.

Written by Colin Henderson

January 25, 2015 at 12:51

Posted in Uncategorized

Demographic update from Pew

Its been a while since I looked at demographics and the shifts between the demographic groups.  This analysis is important because it spells out the banking audience and demographics don’t lie.  Booms in housing and in cottage prices are all tied to demographics and the size and income of generational shifts.  

Demographics also spell out the nature of the banking audience and we can imply certain high level behaviours relative to technology.  

This from Pew notes that in 2015 Millenials are officialy the largest demographic, overtaking Baby Boomers.

This is significant because at ages 18 – 34 at least half of them are entering reasonable income age, and say 10% are entering strong earning period.  With the oldest born in 1981, they have never not known technology, and the youngest born in the mid/late 90’s were immersed in games and web.  By teen years smart phones (iphone – 2007) were part of the lifestyle.

This combined with the strong showing of Gen X suggests a demographic of US 130 million or 30ish % of the population for most westrn countries.

Written by Colin Henderson

January 20, 2015 at 01:10

Posted in Uncategorized


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