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SAP Banking Innovation Day Toronto – Chris Skinner

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@Carole_Beatty #sapbankingday

Live blogging from the day.  Introduction by Randy Lenaghan highlighted the de rigeur standard industry drivers in financial services today.

  • Customer centricity as a principle
  • Core systems upgrading
  • Customer insight driven by data

He also pointed out a more subtle point that like IBM, SAP is having to quickly adapt to a world that many of us saw coming but was hard for multinationals to see. To quote Randy “SAP cannot be a legacy erp vendor any more" which was refreshing I though.  Sap is transforming because of changes brought on by Cloud and SaaS (Software as a Service)

Today was framed as a broad agenda introduction with more sessions coming.

That set the tone for the perfect introductory speaker, my old online ‘colleague’ Chris Skinner.



He started of with a new acronym. 

PEST, which I think i have it right as “Political European social technology”.  Anyhow a great way to introduce banking.

But then he got serious. After the obligatory mention of his new book "digital bank" he kicked off with several themes from the book.




Here are my notes from his highly entertaining talk:

  • Branches:
  • He spoke of branches and referenced ABN Ambro where he average branch has two tellers, and 20 visits per day. In the UK there were 20k branches and now down to 7k.
  • Branches are fast becoming for Account openings only with forecast for representing in 2017 only 5% of customer interaction.
  • He pointed out that Canada has 10k branches vs UK 7k re population.  Interesting when we think that UK has double the population of Canada.  Sobering thought for Banks here.
  • Some banks need branches because customers trust employees – a reference to lack of institutional trust.
  • Mobile
    • He referenced Africa and MPESA and quoted stats on the growth.  In Kenya, mobile reflects 40% of GDP.
    • Barclays had 2m customers on mobile after 2 months – it took 13years to get that with normal online banking.
    • Mobile means that everyone is a merchant – example square.
    • Bbva bought Simple to be in that space.  Whether the price was too high or too low, that was the fundamental reason.
    • Amazon hired 650 people in payments division last year
  • Revolutions
    • Agricultural, industrial, service,  information
    • brought money types:
    • Coins, notes and cheques, cards, and now chips
  • Wearables and Internet of Thinks
    • “Connecting people to the web – the new business war” – Skinner quote
    • The new three P’s of marketing – Proactive, predictive proximity
    • Hailo – friction of money goes away focus is on the experience. Its not about paying for a cab.  Its about going from point A to B.  You get out of the cab and payment takes place seamlessly, frictionless in the background.  It is no longer about making the payment – it is about the experience.
    • Everything is a human thing
    • [Ed] it struck me as he was speaking here that experience 10 years ago to a bank meant web site redesign.  Experience now is much more subtle and all to do with removing the friction of money and payments. [/end Ed]
  • Community and sharing
    • Community and commerce – personal work are connected
    • Zopa 3% of personal credit market
    • ICICI bank made social media a priority, and transformed their brand reputation from somewhat negative to overwhelmingly positive
  • Security
    • 1.3 million bank attacks last year 82 were critical.
  • Wrap up
    • Digital is a journey not destination.
    • Humanize the experience

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    Written by Colin Henderson

    March 25, 2014 at 09:42

    Posted in Uncategorized

    All about Bitcoin | report from Jonathan Shieber from Goldman Sachs rightly separates the technology from the currency

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    A smart report on Bitcoin from Jonathan Shieber at Goldman Sachs.  A well researched report that involves interviews with some very smart people, and comes to what I believe is the correct conclusion.  Smart technology with promise, but never a currency.  Worth the read for those with rose coloured bitcoin glasses.

    All about Bitcoin:

    So what is it? The short answer is that Bitcoin with a capital “B” is a peer-to-peer network that allows for the proof and transfer of ownership without the need for a trusted third party. The unit of that network is bitcoin with a little “b”. But agreement on the topic seems to end there;indeed, there is a deep divide between true Bitcoin believers and serious skeptics. We look at the range of wildly diverging views. So where does that leave us?  With the conclusion that bitcoin likely can’t work as a currency, but some sense that the ledger-based technology that underlies it could hold promise.

    Posner makes the point I did earlier that intrinsic payment support costs have not been absorbed by the Bitcoin implementation.

    Posner points out that enhancing the convenience and, importantly, security of using bitcoin will most likely raise the cost of its use.

    Written by Colin Henderson

    March 13, 2014 at 23:44

    Posted in Uncategorized

    Thoughts on the ‘post normal world’ and more | Digital Life in 2025 | Pew

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    Pew have come out with their regular every 5 year survey of internet denizens and this time on their view of digital life in 2025.  It’s a bit choppy leaving readers to form their own view.  15 theses are hardly a theses.  However there are some fascinating snapshots and provocative thoughts as well as the usual summaries of todays headlines framed as the future.

    What I still found missing here are more mundane things such as same day shopping delivery or hyper-local 3D printing shops to produce your manufactured gizmo of choice.

    However here three of my favourites from people I would expect no less and which summarise what I see as potential (2) and threats (1). 

    These three in my view can look at the trends and possibilities, and synthesize into a lucid thought provoking sense of future. Who knows if its 2015, 2025 or 2055.  That’s not the point.  Where is this taking us is the point.

    (Paragraphisation ( is that a word?) and bolding is mine as I find that preferable to editing someone else’s words in this context.)

    We have entered the ‘post-normal’ world

    Stowe Boyd, lead researcher for GigaOM Research, took many overlapping influences into consideration in his response, also figuring in the influences of robots and asking, “What are people for?” He predicted: “The Web will be the single most foundational aspect of people’s lives in 2025.

    People’s companion devices — the 2025 equivalent of today’s phones and tablets — will be the first thing they touch in the morning and the last thing they put down to sleep. In fact, some people will go so far as to have elements of their devices embedded. The AI-mediated, goggle-channeled social interactions of the near future will be as unlike what we are doing today, as today’s social Web is to what came before.

    The ephemeralization of work by AI and bots will signal the outer boundary of the industrial age, when we first harnessed the power of steam and electricity to amplify and displace human labor, and now we see that culminating in a possible near-zero workforce. We have already entered the post-normal, where the economics of the late industrial era have turned inside out, where the complexity of interconnected globalism has led to uncertainty of such a degree that it is increasing impossible to find low-risk paths forward, or to even determine if they exist.

    A new set of principles is needed to operate in the world that the Web made, and we’d better figure them out damn fast. My bet is that the cure is more Web: a more connected world. But one connected in different ways, for different ends, and not as a way to prop up the mistakes and inequities of the past, but instead as a means to answer the key question of the new age we are barreling into: What are people for?”

    The age of the ‘global supercomputer’

    Mike Liebhold, senior researcher and distinguished fellow at the Institute for the Future, commented, “The Internet is morphing from the global library into the global supercomputer. By 2025, almost every application or service we can imagine will be enhanced by the application of enormous computation enabling widespread applications of capabilities like mining, inference, recognition, sense-making, rendering modeling as well as proactive contextual computing.”

    A ‘balkanized’ system

    Paul Saffo, the managing director of Discern Analytics and consulting associate professor at Stanford, wrote, “The pressures to balkanize the global Internet will continue and create new uncertainties. Governments will become more skilled at blocking access to unwelcome sites.”

    Relevance to Bankwatch:

    The nice thing about this kind of survey is that it expands the mind and gets a person thinking beyond the day to day.  The three points brought out from the quotes above are what I find interesting. 

    1. Internet as the next leap in industrialization
    2. Internet as a supercomputer (processing vs cataloguing)
    3. multiple internets

    I recently read Thieves Emporium and while the story line is moderately interesting, the lifestyle structure was most interesting.  It’s a time where the criminals use only open source throw away computers to transact with customers.  They do because that’s the only way they can be certain there is no government surveillance while they operate in the ‘new badlands’ buying and selling drugs, pills, and anything people need.  Open source means the badlands can inspect the OS to ensure no surveillance. 

    This is a great example of balkanization of internet, or point 3. 

    But the other two are where the potential lies.  These talk to the internet getting smarter and delivering solutions to us.

    Written by Colin Henderson

    March 11, 2014 at 23:25

    Posted in Uncategorized

    Millennials see banks as irrelevant | Scratch

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    I think its time to revisit the relevance of demographic shift in terms of technology adoption.  What got me thinking about this was this report from Scratch/ Viacom on the Millennial generation, and their thoughts on banks.  The report is not talking about the usual shift to electronic channels.

    The report indicates millennials see banks as irrelevant. 

    The Millennial Disruption index

    The three-year study from Scratch, an in-house unit of Viacom that consults with brands, found that a third of millennials believed they’ll be able to live a bank-free existence in the future. In the age of Simple, Square, and Bitcoin, these millennials, defined as those born between 1981 and 2000, overwhelmingly believed that the way they access money and pay for things will be completely different in five years.

    This makes perfect sense.  Traditional bankers saw electronic channels, once they accepted them, as cheaper delivery models.  A bank benefit.  Meantime a broader shift was taking place which I often spoke of here, as online then mobile became an experience choice.  You will (7 years ago) be defined by your online banking and it should come first in driving technology change in the bank, was my firm belief.  Trust was shifting to brands that old people were just encountering, but millennials only knew having grown up with only them.


    Suddenly these powerhouses are the basis of the stockmarkets.

    There is a new factor in generational shifts.  There is no more gradual change.  We have several changes within generations brought on by internet and technology that brings big change in periods of 5 to 7 years or less.

    Ever since the 50’s failure of the Jetsons and the like to see an actual future, most don’t trust predictions and remain entrenched in what they understand: which is the present.  This doubt about future predictions alongside the significantly more rapid change brings skepticism.  So its our job to stay ahead of the curve. 

    At SXSW this week its all about the Internet of Things.  There is major focus on the smart house with heating, art, music all adapting to the person that is there.  (We can already see eyes glazing over.)  But banking will be involved in the internet of things.  Not banks, banking.

    Where am I going with this.  Online banking adoption.  It’s a complicated topic.  On the one hand I do not know anyone who doesn’t bank online with exception of a couple of relatives in the age 80+ range who don’t have computers.  On the other hand I know many households where one person does the online banking and the other does not.  These data anomalies make national online banking adoption survey percentages hard to read and understand.  Could we have 100% online banking adoption, yet survey might show it as 50%?

    We are currently at about 61% in Canada and yet I know of no-one who doesn’t bank online.  The US is at a similar percentage.  My walking around assumption is that a very high percentage of households are online.

    It is hard to read my own words from 2007 without cringing, yet it reflects the then mindset.  Banking online had an 35% – 40% adoption rate, and Cathy predicted it would get to 76% and I supported that.  Others were uncharacteristically doubtful.  That was still a period of internet adoption.  Thankfully we are over that now, and virtually everyone is online is some fashion.

    But, hats off to Jim for correctly reading that online banking growth is not a straight linear pattern but does in fact move in steps that reflect the underlying demographics.  Another factor behind that is that rapid change is not always so rapid with years of work in places like silicon valley or NCR in Dundee.

    However we are fast reaching a new tipping point that goes beyond the most recent fad of last few years, social internet, (which I still believe to be an aberration, but later for that).  Machine to machine (M2M) internet takes social to a whole new level that means you can interact with not just people but other internet devices such as your house, your fridge or your art on the wall.  This is the internet of things that they highlight at SXSW.

    This is not a shift for millennials.  This is expected by them.  So of course banks look archaic to them.  They get annoyed at a bank when the person behind the counter, no matter how friendly they are, has to type an interminable number of key strokes to look up a balance or perform a transaction.  That same experience talking to their telco who types and waits as the technology takes forever.  At a minimum if they must walk into a bank they would expect the bank to know they have arrived.  If Yelp and FaceBook know why can’t the bank? 

    They look at their own experience with cloud storage, social media, web mail and expect better, faster and different.

    Back to the survey.  Its obvious millennials have experience with banks in order to form the conclusion that they see no difference amongst banks.  The subtlety of bank marketing differentiation matters not.  They only care about the experience and that is driven by online experience through mobile, tablet and laptop, in that order.

    Most interesting is that they do not believe banks can reinvent themselves. 

    “They believe innovation will come from outside the industry.”

    Relevance to Bankwatch:

    This turned out to be a longer post than I expected.  The catalyst was the millennial belief in irrelevance of banks.  This is not to be ignored or ignored at your banks peril. 

    Outfits such as Moven and Simple are having difficulty getting off the ground.  There are others in Europe that are in fact doing particularly well.  The common ground they share is in producing a dramatically better experience for the client.  This is the future that millennials expect.

    Written by Colin Henderson

    March 8, 2014 at 23:10

    Posted in Uncategorized

    US payments folks still cannot embrace EMV and PIN

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    The US payment industry is like Nero watching Rome burn.  Just as they show signs of getting it together following the Target data breach, they are still debating retaining the ability to sign a card chit as an option to requiring a pin.  PIN is considered an option by these folks.

    MasterCard, Visa form group to push for better card security

    They can also require – depending on the issuer – that users enter a personal identification number, or PIN, to make purchases, adding an extra layer of security.

    Written by Colin Henderson

    March 8, 2014 at 18:47

    Posted in Uncategorized

    BMO upgrades their iphone app with a completely new interface and it is superb

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    BMO just released an update to their mobile app which now appears to be a full fledged app and it is quite superb.  I say that based on the look and feel, the functionality, and the app flow. 

    It has a nice set of introductory screens highlighting the changes, and the subtlety that is included in the functionality.


    But the coolest part is that it feels like a modern app now with slide outs (below) and generally a very clean interface, fonts and presentation. 


    Lastly it includes the new ‘book an appointment’ function which I am told is directly hooked into the branch Exchange Calendar. 

    Relevance to Bankwatch:

    This dramatic upgrade is evidence of how mobile can change even banks.  Mobile is not online banking on a phone.  We know from the many non bank apps that the key is relevant functionality that makes the experience personal, and most importantly in context for each client and what they expect at any given day/ moment.

    Anyhow, more later on mobile and banks, but kudos to BMO for this impressive app. 

    Written by Colin Henderson

    March 4, 2014 at 19:29

    Posted in Uncategorized

    Role of head at ANZ digital and social media strategy reminds me of … “Markets are conversations – Markets consist of human beings, not demographic sectors”

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    I found the small print in this announcement interesting.  I go back to 1999 “The Cluetrain Manifesto” that long pre-dated social media.  It held out the promise, as yet not even close to being fulfilled, of internal staff and customers interacting with each other, employee to employee, customer to customer, and of course finally employee to customer.

    ANZ appoints head of digital and social media strategy

    In addition to her focus on external audiences, Gome will also have responsibility for ANZ’s internal digital media assets including the corporate intranet and the introduction of social collaboration tools, and for the internal culture to support the group’s social and digital media agenda.



    Written by Colin Henderson

    March 3, 2014 at 00:09

    Posted in Uncategorized

    Mobile World Congress 2014 | next on the horizon–mobile payments and exponential growth of internet connected devices

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    The Mobile World Congress is on this week in Barcelona.  The big backstory this year seems to be the fear amongst the telco’s otherwise known as MNO apparently.  (Mobile Network Operators).

    There are two seismic shifts going one – one nascent and one well along.

    Payments and the disintermediation of MNO’s:

    Dave Birch covered every possible acronym in this pitch to MNO’s (Telco’s) that they needn’t worry.  This issue concerns something known as the Secure Element (SE).  This is a piece of hardware in mobile phones that controls the information flow inside your phone between the proximity / vicinity interface such as Near Field Communication (NFC) and the payment processing.  The SE is owned by the MNO and they planned that walled garden would ensure their involvement in phone based payments.

    image              image

    However Google had other ideas, and their engineers developed the Host Card Emulator (HCE) which also resides in the phone in software.  The HCE means the payment flow no longer requires the SE.  The NFC reader and the phone CPU can talk directly to each other.  This development is sending shock waves through MNO land.

    Internet of things:

    Next we have the growing excitement of the internet of things and advent of Machine to Machine communication (M2M).  This space will be as large as the imagination.  Milk cartons talking to fridge, talking to you mobile device, automated grocery store orders.  It can be as diverse as items on a manufacturing assembly line talking to the inventory control, to spare parts in a bicycle store.  It could be connected humans.  Here is an older (2011) but excellent piece from Dave Evans at Cisco on this.

    There will be no end of ideas once this moves from idea to implementation.  And all this new communication requires air-waves and again MNO’s are anxious to capture their share of that market.  Here is an example from AT&T.  MNO’s have at least figured out roaming is a non-starter in M2M and are laying the groundwork accordingly.

    Mobile operators turn to machines for growth

    To facilitate this, AT&T has negotiated roaming agreements with operators in more than 150 countries. “Our business customers only need to sign one contract with one carrier to roll out M2M globally.”

    Relevance to Bankwatch:

    Banks do not have a good reputation for getting ahead of large scale new developments.  This would be the time to start blue-skying on how they can lever both these evolutions.  I have my own reasons that I won’t give up my ideas here yet, but there are ways that banks could be engaged and generate new clients and new revenue streams.

    Written by Colin Henderson

    February 27, 2014 at 17:21

    Posted in Uncategorized

    The under appreciated problem is looming for Bitcoin

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    It appears the disappearance of Bitcoin exchange, Mt Gox, is not a problem, at least to those who did not keep their Bitcoins there.

    Fate of Mt Gox questioned after Bitcoin trading suspended

    One of the protesters, London-based developer Kolin Burges, said on Tuesday that his faith in Bitcoin as an alternative payment system had not been shaken.

    “If Gox is finally disappearing, it is bad news for everyone with their money in there, but good news for the rest of the industry.”

    I would have to disagree and say this is a huge problem for Bitcoin.  As I have said before its a smart software market but there is no reason to trust nor rely on Bitcoin as a medium of exchange or as a currency.  it is a speculative investment run by unregulated and frankly unknown people.

    Its great that Kolin Burges makes the quote above, but when $40 million [Edit:  I missed a zero -  that should have read $400 million] worth of Bitcoins disappear and 20% of the value is wiped of the market, this is a Bitcoin equivalent of Greece, except at least Greece is still around to make amends.

    A few weeks ago Mt Gox announced the freeze on withdrawals.  At the time it was blamed on a software bug, but it now appears it is plain old theft by one of the owners.

    I maintain that at best Bitcoin is a speculative commodity market. No amount of software smarts can make up for country based trust in a currency.  I refer to my review of Alex Paynes piece and his quote:

    Silicon Valley has a seemingly endless capacity to mistake social and political problems for technological ones, and Bitcoin is just the latest example of this selective blindness

    Written by Colin Henderson

    February 25, 2014 at 13:48

    Posted in Uncategorized

    Funny how our own obvious predictions actually come true – look at Office Max

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    Humans are interesting.  We speak casually about trends, end of book shops, paperless, cashless, but we continue to be surprised at our own predictions.  Witness Office Depot share price following their investor guidance indicating 2014 revenue will be less than 2013.  It does make me wonder when we will see this with traditional banks.

    For 2014, market trends are expected to remain challenging across our product lines and distribution channels. Consequently, Office Depot expects total company sales to be lower than 2013 pro forma combined sales.

    Office Depot – It is going to be a challenging year peddling pens


    Written by Colin Henderson

    February 25, 2014 at 12:42

    Posted in Uncategorized


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