This Week in Engagement Banking Backbase, along with several leading fintech voices (Bradley Leimer, Roger Peverelli, Chris Skinner, and more), launched BANKNXT to serve as a platform for discussion, and to fill the void that exists between the financial and tech worlds. This week also brings the release of The Future of Banking, Backbase’s latest white paper, which gives insight into how a bank can succeed in this new and ever-changing financial landscape. Finally, check out Square’s Jack Dorsey on The Charlie Rose Show discussing the company’s move beyond payments.
The Horseless Carriage
The way most financial services firms are exploring mobile, makes you think you’ve travelled back to 1995, to the early days of the internet. The first applications we saw back then on the internet were typical examples of what Marshall McLuhan called the “Horseless carriage syndrome”. The first car looked like a carriage without a horse. When we try to grasp a new medium, we always do so within the confines of a medium we already know. Financial institutions are still in this stage. They are currently replicating existing regular processes to the mobile channel; enabling customers to conduct their financial transactions, or filling out a claims form. Don’t get us wrong: we think this is good. But we feel – like everyone – that so much more is possible. We really need to think beyond the horseless carriage.
Why Would a Financial Services Firm Want to Use Pinterest?
“PINTEREST: Can financial services firms use this new platform effectively?” That was the subject line of an email in my inbox this morning. It came from Corporate Insight, a financial services consulting firm. The email went on to note that “Pinterest values imagery over text and incorporates many social aspects of Twitter and Facebook to connect users and spread content.” While admitting that “no financial services firm uses Pinterest today,” nevertheless Corporate Insight thinks that financial institutions should have a presence on Pinterest. At first I scoffed at this: a financial services firm on Pinterest!? But on reflection, we are in an online world that is increasingly visual. So why shouldn’t a financial services firm use one of the leading image-based social networks? Tumblr was probably the first social media service to exploit the Visual Web trend on a mass scale, but it’s been Pinterest that has captured the public imagination in 2012. Pinterest is a place to store and share images (and videos, although that is a much less used feature of the site).
Bloomberg Business News
Why Half the World Doesn’t Have Bank Accounts
In the U.S., bank accounts are nearly ubiquitous, with almost 90 percent of adults having formal accounts. But in poor countries, only a quarter of people report having have accounts. All told, more than 2.5 billion adults around the world—about half—are unbanked, according to a new World Bank data project funded by the Bill & Melinda Gates Foundation and based on Gallup polling in 148 countries. The World Bank launched the Global Financial Inclusion initiative, which it calls Global Findex for short, with both a database and a white paper on the new stats. A leading reason for the disparity between rich and poor countries is both dispiritedly intractable and painfully obvious: poverty itself. Two-thirds of people without accounts said they simply don’t have enough money to use a bank. The data, though, show some less daunting problems to tackle. People said financial institutions are too far away and too expensive to use. In some regions, including Latin America, people said the institutions required too much documentation. The white paper says fully 35 percent of the unbanked report barriers that are solvable.
Backbase White Paper
The Future of Banking
Banks are facing rapid change. Customer behavior, technology and competition are all in transition. The most challenging part? It’s all happening at the same time. Companies like Facebook have made the world social and given customers a voice. Only three years ago Apple launched the iPad, and created a whole new product class. Tablets and smart phones are taking the world by storm, soon eclipsing traditional PC sales. And in a move that no one could have predicted even five years ago, companies are branching out from their native industries to compete with traditional banks. These competitors are also composed of innovative entrants such as Simple, Movenbank, Google and PayPal – to name only a few. Whatever their origins, all of them show that a physical banking presence does not necessarily equal success. It also means that banks must act now to engage their customers, or risk losing them to those who will.
2020 Mobile Vision
Mobile has long been a talked about strategy for the financial industry. But finally it is moving beyond simple online banking tasks of just being able to check account balances or receive mobile account alerts to providing sticky applications that will change a consumer’s lifestyle. Cases in point are the Google Wallet and Pay by Square. I have both. They are both fabulous and easy to use. I wish more merchants would embrace NFC (Near Field Communications) technology so that I can ditch my “real” wallet. Based on the results of a recent survey conducted by Pew Internet & American Life Project, a lot of people share my sentiment. Nearly two out of three respondents to the survey (65%) told the Pew Internet & American Life Project that they think most people will have fully adopted the “mobile wallet” as their day-to-day means of paying by 2020.…By 2020, most people will have embraced and fully adopted the use of smart-device swiping for purchases they make, nearly eliminating the need for cash or credit cards. People will come to trust and rely on personal hardware and software for handling monetary transactions over the Internet and in stores. Cash and credit cards will have mostly disappeared from many of the transactions that occur in advanced countries. The mobile payments market gained a lot of traction last year thanks to Square and other mobile merchant acquirers like NA Bankcard giving a lower cost alternative for merchants to accept credit card payments. This is broadening consumer awareness about mobile apps and uses for their smart phones and tablets. All the activity around mobile and payments is really heating up with the big brands. Here’s a short summary list to catch you up to date.
See the Charlie Rose Show with Square’s Jack Dorsey talking about the company’s move beyond payments.
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