The Bankwatch

Tracking the consumer evolution of financial services

Archive for the ‘Open Finance’ Category

Bankwatch predictions – Banking 2007

Christmas and New Year are always a good time to take stock, and reflect on the year past, and what we might expect next year, so here are my thoughts in the Banking space, based on what I have seen, and expect. This is largely a North American view.

  1. statement and cheque presentment will be table stakes. If you don’t have that capability it will be noticed by your customers, and you will lose customers.
  2. Banks will start to worry about internet evolution, and some tangential attempts will be made by baby boomer executives who genuinely want to make a change. Bank blogs will be big, and disastrous. Reason: Banks have not integrated their internet ‘people’ into their ‘corporate’ people, so 2007 is still too early. Thought for 2007 – “Blogs have to reflect the business model”. First look at your structure. Sticking with the positive examples, I believe Bank of America have the structure right.
  3. Credit Unions will lead the way in use of blogs and community spirited internet activities. They will continue to lead the way in customer loyalty. They have a natural advantage being local, and community minded from the outset, but they have something deeper that perhaps results from the non profit motive, that means customers believe CU’s care. Internet and Credit Unions match. On a similar note, I see an opportunity for the smaller small/mid size Banks in the US. They have some of the same attributes as Credit Unions, and can lever that, instead of worrying about the large Bank of Wells Chase’s. Bank exception: Wells Fargo – they get it.
  4. online banking generally will undergo a state of crisis. First we will have the next “phishing”, possibly “man in the middle attacks”. But at a deeper level, Senior Executives will ask why all customers have not been “migrated” (internal bank jargon for the uninitiated). This will result in dysfunctional Bank behaviour. [Note those customers have not “migrated” because Banks (largely) haven’t moved beyond transaction automation]. Bank exceptions: more this time – Wells Fargo, Bank of America, ScotiaBank, and TD Canada Trust.
  5. Quietly, web 2.0 offerrings will start to chip away at the traditional banking business model by levering social internet to eliminate costly bank processes. Social lending, brokerage models, account acquisition models.
  6. Tied to 5. Open Finance will resurge and expect some big Bank(s) to sell other Banks products and services on a commission basis. This is an opportunity for 3. above. No prediction here – I would just be guessing who might do this.
  7. Online account opening will be table stakes, and generally associated with high interest rates to prime acquisition. 2007 will see a plethora of new brands out in front of the mother Bank brands. (2008 will see entrenchment though)
  8. Certain Banks will stand out from the competition amongst customers by
    1. offerring online product comparisons with other Banks
    2. online planning tools as Wells have already done.
    3. online financial planning
    4. cross channel integration: branch employees connected directly to online banking customers
    5. call centres for some, will encompass the entire Bank; some employees just happen to be centralised.

That’s enough for now. Each of these could be a post by themselves, and likely will be.

Your thoughts for 2007? – comments encouraged!

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Written by Colin Henderson

December 21, 2006 at 22:46

Javelin Strategy and Research » Online Trading: Banks or Brokerage?

I am looking forward to seeing the results of this survey.  Since 1996 and the beginning of online banking & brokerage, I have believed they ought not to be separate.   

While bundling stock trading activities with personal finances may be generally viewed as more convenient than using online brokerage services, Javelin Strategy’s comprehensive, ongoing survey regarding online banking and stock trading revealed rather interesting responses to this issue.

Source: Javelin Strategy and Research ยป Online Trading: Banks or Brokerage?

I see three levels of customer requirement:

  1. bill payment, online trading, customer service, basic advice
  2. financial planning, and direct link to a planner, investment advisor
  3. full service brokerage, private banking

When viewed this way, the need to operate as two separate applications, both of which ignore private banking makes no sense from a customer perspective.


Written by Colin Henderson

November 10, 2006 at 22:32

Blog Business Summit | Search & the future of media;Battele – (Why not a Bank based on Search?)

 We keep hearing this that search is growing in terms of how people navigate the internet.

  • Command line is how we navigated the 1970’s. The Find command is how we navigated the 1980’s. Now search is the way that we navigate Web 2.0. The command line is natural language. We are starting to use computers the way we talk to other people.
  • If search is an interface, then it’s our navigational device. It’s our steering wheel.

Source: Blog Business Summit

I find this fascinating.  I get the logic, that search is akin to asking a question, and that’s what we do naturally in day to day life so why not online.  I get that.

But are we ready for a bank site that uses Google Suggest for its primary navigation?  Why not – if search is the natural way to find stuff, why put customers to all the bother of searching your navigation? 

Why not have a home page with only a search box, that offers suggestions, as done by Google Suggest.


Written by Colin Henderson

October 30, 2006 at 01:10

Forrester Research: Creating Good Online Content Experiences | Usability Beats Unique Content, Hands Down

As recently as 5 years ago, it was not unusual for site redesigns to begin or at least share 50/50 with the product group, whose content, and customer experiences dominated the project.

Today its not unusual to do a site redesign without product involvement beyond validation of rewritten and re-purposed content contained within a  navigation, and presentation focussed on a customer segments needs and expectations.

Here Charlene at Forrester summarises her new report on that topic.

What do users want from their content sites? Unique content does matter, but the basics – such as clear navigation, easy-to-use search, and ads that don’t interfere – matter more. Personalization has its role for a certain group of people but often suffers from abandonment.

To figure out the right mix of features, and to prioritize design and development efforts, content sites should aggressively employ

  • personas,
  • site reviews, and
  • design standards,

to ensure that they provide their most valuable users with a good experience.

Source: Forrester Research: Creating Good Online Content Experiences


Written by Colin Henderson

October 29, 2006 at 18:40

Open Finance v2.0

I think this is a key point that James makes here.

BankerVision: The long tail of banking

I can’t help wondering if the long tail opportunity for banks is rather more substantial than manufacturing product for niche customer segments.

8 +/- years ago someone at Forrester coined the phrase “Open Finance” to denote the idea of selling others’ products. The idea was that distribution through internet was so disruptive, that unless you could offer various alernatives to customers, your offer would be immediately discounted. This also intrduced the separation of distribution from product.

The Net creates a new financial services environment that Forrester calls Open Finance. In Open Finance, consumers enjoy best-of-breed financial services combined with rich advice and the easy electronic movement of money.

I think that Open Finance is coming to pass now. Products such as mortgages particularly are so commoditised, margins have gone, and that there is little loyalty associated with the product. The loyalty tends to lie with the service, speed, convenience etc, and those attributes are all distribution related, not product related.

Written by Colin Henderson

August 10, 2006 at 17:31

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