Brett King

Archive for February, 2011|Monthly archive page

Mobile NFC payments – there’s an App for that…

In Customer Experience, Mobile Banking, Retail Banking on February 27, 2011 at 23:01

There’s a great deal of debate in the Financial Services community at the moment about the potential impact of NFC or Near-Field Communication technology within mobile phones and how it will effect the payments landscape. The financial services players are generally scratching their heads and although they admit that NFC phones like the iPhone 5, the Nexus S and others are interesting – they don’t see the need for rapid response. After all, the lack of POS (point-of-sale) infrastructure that supports NFC is in itself a reason why a sense of urgency is not necessary. There’s plenty of time to worry about that later. Right?

Wrong!

There’s an App for that…

In July of 2007 Apple launched the iPhone (what we call the iPhone 2G generally today). Since that time I’ve owned each successive generation of iPhone and I now also have an iPad. So what’s the big deal?

The most impressive thing about the iPhone is not necessarily multi-touch, retina display, ease of use, or core functionality, but is unquestionably the iTunes platform that brought us “Apps”. Prior to the launch of the iPhone, we’d never even heard of Apps, and yet today, just 4 years later, here are the stats on Apps:

  • 350,000 Apps for Apple and close to 200,000 for Android
  • 10Billion downloads for Apple, 2.5Billion for Android Marketplace
  • 15.1Bn in Apps Revenue expected for 2011
  • Daily downloads 22million per day – Apple
  • New app submissions/day – 587 (100 games/488 non-games)
  • No of Active publishers/developers – 72,000 on the US store
  • 160m iTunes account holders (that’s 160m credit cards on file)

So from it’s humble start iTunes was always more than just a place to come and download music or TV episodes, it became the core delivery platform for a whole new category of software and user experiences. At 10:26 AM GMT on Saturday, January 22, 2011, the 10 billionth app was downloaded from Apple App Store.

10 Billion Apps in 5 years is pretty impressive

Now, before iTunes, the iPhone and “Apps” there had still been software – both for PC screens and for phones. Prior to the so-called ‘JesusPhone’, there were Java “Apps”, games and so-forth you could buy and download for your phone, but these certainly didn’t become ubiquitous, primarily because the usability wasn’t good enough and there wasn’t a marketplace that distributed these Apps.

So here we are, just a few years later and there’s probably not a single person in the US, UK, Australia, Germany or France who doesn’t know what an “App” is. Worldwide mobile application store revenue is projected to triple to more than $15.1 billion this year and reach $58 billion in three years, according to Gartner Inc. That revenue was $0 in 2007.

And yet, there are bankers out there that still persist in the belief that mobile payments via your iPhone will take years to ‘take off’. In a debate on this via Twitter over the weekend one of the typical quotes was “I can see it, just not for some time…”

Why the App is a great paradigm for NFC

The dominant position from the card issuers and traditional too-big-to-fail banks is that there is already an existing point-of-sale infrastructure in place in the USA, for example, that will take years to replace with NFC or contactless capable terminals. This naturally limits the adoption of contactless payments technology because even though someone has a contactless credit card or a phone enabled with contactless technology, it still doesn’t mean that they can pay – if a merchant can’t accept their payment then it is essentially dead before it starts.

In our Twitter debate over the weekend Rich Clow (@richclow) from Citi came up with a strong analogy likening the existing POS infrastructure to the ‘rail network’ that opened up the frontier of the US in the 1800’s. Without the ‘rails’, without contactless point-of-sale terminals, how exactly will customers make payments using their NFC phones? What’s the good of having a locomotive unless you have rails you can put it on? It’s an excellent point.

Is the lack of 'rails'/POS infrastructure going to limit NFC payments adoption?

Except … prior to 2007 there were no rails for Apps. The App didn’t effectively exist, but that didn’t stop Apple from creating the rails and the locomotive as part of the iPhone ecosystem at the time of their launch. Right now today Apple and Google are working on alternative payment schemes that will circumvent the traditional visa/mastercard POS systems and networks to enable both P2P payments and commercial transactions with merchants and retailers via phones. There may be some hook into the traditional payment networks behind the scenes, but all you’ll need to pay is an NFC phone and wireless network access.

How quickly will payments from one phone to another become ubiquitous? Answer: How long did it take Apps to become ubiquitous?

Put it this way – those out there that think this will take another 3 to 5 years to honestly compete with plastic mag stripe or chip and pin POS terminals, need to change their terms of reference. Apple and Google won’t wait for the rails. They’re going to jump straight to supersonic transport and the banks will still be waiting around for the train to stop at their station. Meanwhile, we’ll be choosing new payment networks as the paradigm for the next generation of commerce interactions.

Goodbye checks, goodbye plastic! If you’re a banker or card issuer, the sonic boom is coming your way…

The digital relationship revolution

In Customer Experience, Engagement Banking, Media, Social Networking on February 21, 2011 at 18:01

Everyday we’re making choices in the digital and physical worlds between one brand and another. Sometimes we choose a brand because they provide us with great service, but sometimes it’s simply because they provide adequate service and there isn’t really a better option. Mostly the choice of the interaction isn’t about great service at all; it’s about convenience. Generally speaking it’s not because of their products or their so-called services. It might be the way in which they connect me to certain products or services, but it isn’t generally what they produce.

Some days I’m incredulous at how some organizations manage to survive based on their apparent single-minded dedication to frustrating an efficient and productive service relationship. Other days, I’m amazed at myself for the ease with which I accept such maltreatment and why I don’t have the energy to turn around and leave. Often, it is because I don’t have a choice, there simply isn’t a better alternative. Sometimes it is because, defeated, I accept that my exiting investment in the relationship is sufficient a reason for why I should stay, knowing that I’m not going to generally fair much better elsewhere or I would need to incur costs to make a change.

Why most service businesses suck

Most service organizations might start off with good intentions, but over time they build processes that are designed to standardize or make the delivery of their services more efficient and cost effective. Somewhere in the process of defining the most efficient instance of a process, many organizations appear to forget why it is that they have a business in the first place, namely – the customers they serve.

The act of simply documenting a business process, scripting a flowchart or coding business objects, could in itself, be the very thing that destroys an organization’s ability to react to the needs of its customers. Granted, there must be order… but when the creation of order dehumanizes the participants, or kills off the ability to offer exceptional service, then in the end, the process itself is simply killing the opportunity. Over time, that process is burdened by more ‘rules’ or policies that not only disrupt service capability, but also reduce the cost effectiveness of the process too.

Sounds dramatic? Maybe I’ve been watching too many chick flicks lately. Maybe my inner self is crying out for something better. So here’s the thing…

Doesn’t the digital space itself do the very thing that I’m suggesting? Doesn’t an electronic interaction break the service opportunity into components of a database, an expert system, a user interface, a channel deployment, or a touch-point? So how is it that I, a glorious technophile and champion of all things digital, is suggesting that service requires humanization, heart and flexibility?

The digital connection

Well…it might just be feasible that what social media is really doing today is more than socializing the web. It might be possible that this drive towards great usability, human interaction design, multi-touch, augmented reality, geo-location and connectedness is actually creating a digital service platform that could revolutionize the ability of an organization to look after me as a customer.

Social media is about connections. I’m connected with my friends, my family, my business associates, my old school buddies, but I’m also potentially connected with those organizations I interact with day to day.

I’m using my “App” phone and my tablet to do my banking, check in on my flights, send messages to friends, play games (I call this downtime), watch a movie or read a book. My relationships in this space can be deep, emotional and powerful, such as when I see a picture of my kids on Facebook while I’m far away on a business trip. They can elicit a smile, such as when I see a funny status update, or even when I have a great, and really simple engagement with a service provider; like downloading a book on Kindle, starting to read it on my iPhone and the finding my place again later when I turn on my Galaxy Tab or iPad.

Building better relationships

The concept that you can’t build relationships in the digital space, that face-to-face or human interactions can consistently provide better service experiences, is simply an excuse not to expand your view of connections.

The digital landscape doesn’t destroy relationships, it doesn’t always replace physical either, but the multi-channel space can definitely enhance relationships between a brand and a customer.

Computers don't destroy relationships...people do

When I anticipate your needs before you do and I present you with a simple, targeted and compelling journey – that is great service. When I show you can trust me because I don’t inundate you with irrelevant marketing campaign messages to your phone or inbox, but when I have something to tell you it really hits the mark – that is building a relationship. When I don’t treat you like an idiot by trying to convince you will have a smile from ear to ear if you simply change banks, airlines, brand of shampoo or which mobile carrier you are using – I’m showing you I can be honest, rather than believing you are naïve.

The art of interactive relationships is about building great journeys in a world of transparency, a world of increasing demand for service and simplicity, and where you don’t get points for branding, you get points for the ability to connect and deliver.

We can talk about PFM, personalization, direct marketing, behavioral economics, usability, interaction design, and other such buzz words incessantly, but ask yourself this…

Are your customer facing processes defining your organization’s ability to have a relationship with the customer, or are your thinking of new ways to enable relationships with customers every day?

Don’t tell me I have to do it your way because that is your process. Don’t tell me you haven’t deployed an iPhone App or you aren’t on Social Media yet because you don’t know where the ROI is.

Meet me in the middle. Try to understand me, and try to deliver what I need, when and how I need it. If you do that honestly and transparently, I will trust you with my commerce.

If you don’t – your just another brand using just another channel to try to get my spend. That’s not a great start to a relationship.

Finally, I’d like to thank my sponsors for this blog – the US Bureau of Citizen and Immigration (sic) “Services”, TSA, HSBC, Qantas, American, British Airways and United Airlines, countless hotel chains, and customs officials of many countries for their inspiration…

When PFM is no longer enough…

In Customer Experience, Internet Banking, Offer Management, Retail Banking on February 8, 2011 at 13:13

At Finovate Europe last week we saw a lot of what I would generally classify as “me too” PFM efforts. While there were a few stand out examples, such as Meniga and Linxo, I don’t think these platforms are robust enough for where we are going. This says a lot I know, because most banks are still not at this basic stage of having PFM deployed and I’m already talking about what comes next, but if you’re a bank about to invest in PFM – then think about whether it goes far enough.

The fact that there is a lot of activity in the PFM space shows that the time is very quickly coming for some sort of customer relationship footprint aggregation/mobilization. But, it’s going to take more than a few fancy pie charts, a drag and drop goal function, and seeing your account usage on a timeline to pimp out my Internet banking.

The information deluge and filtering

One of the challenges I see moving forward is that a pie chart of your portfolio, or a pie chart of spend patterns, or a fancy presentation of your account statement is only going part of the way. Increasingly I need to be able to filter information quickly and understand the context and relevance of that information to me at a glance. While a pie chart is potentially an effective tool to show me some of that, and might even be central in some scenarios, there is a lot of other relevant information that might be prioritized.

Mint Screenshot

There's always a pie chart in there somewhere...

The following information, for example, is not going to be important everyday, but at certain times, it could be quite useful:

  1. You just got paid your salary
  2. Your mortgage account doesn’t have enough money in it for the next payment
  3. Your phone bill is due tomorrow but you haven’t set up a payment
  4. The $25k you have deposited in a savings account should be deployed in a CD or other instrument to be getting better interest
  5. Your wife just maxed out her credit card (ok, I’m told that she’s allowed to do that…)
  6. A retailer you visited 3 times in the last 3 weeks will give you a 15% discount if you use your bank visa card this month
  7. Houses in your neighborhood have just been revalued upwards
  8. Your anniversary is a week away, and here is a special offer for a romantic night away

Then there is statistical information that is useful:

  1. Spending habits that are good/bad
  2. Progress towards a goal
  3. More efficient use of your money
  4. Spending mix
  5. Portfolio rebalancing based on Risk Profile
  6. Available balance on your credit card
  7. Loan refinancing options

This is a lot of information to show on a pie chart or a single screen, so either the bank will cram this information into a ‘dashboard’, or just not show it at all. The capability to filter this information and give direct, relevant feedback to the customer is essentially missing in most banks today.

Seriously, the key to transforming the relationship of the client of today is firstly to demonstrate your value as a bank in the relationship, and second, to anticipate the client’s needs. At the moment, Internet Banking as a platform probably does neither of those well. PFM is a step in the right direction, but it has a way to go, purely because of the volume of information we’ll need processed and the need for relevance.

Digital Relationship as the new metric

Today I received an email from my relationship manager asking me if I would be happy to recommend her. It went something like this (sanitized to protect the bank):

You may have recently received a letter inviting you to ‘Share your Experience’, and I want to take this opportunity to further highlight the features and benefits of this programme. If you know someone, a friend, family member or colleague who would benefit from having a <bank> relationship, I would really appreciate your referral. By introducing someone to <bank>, you open the door for them to the same high level of attention, international services and financial opportunities that you currently enjoy as a <bank> client.
Email Note from my Relationship Manager

I actually have no problem recommending my RM (Relationship Manager) because she has done an excellent job. But there are a few issues I take with the above communication.

Firstly they sent me a letter…seriously?

Secondly, the assumption is that I perceive their service as they do, i.e. “the same high level of attention”, especially given the fact that their digital presence is significantly sub-par.

I’m logging in to Internet banking, and would be logging into mobile banking (if they had it), something like 5-10 times a week. The average customer is doing something similar each month. I visit their ATMs 2-3 times a week, and I visit their branch about twice a year, if I have no other choice.

So their best place to build a relationship with me is online, but they honestly don’t understand that based on their current platform. That relationship will be built through connecting with me through understanding me, and personalizing the dashboard that interfaces me to the bank.

Data visualization is a great start

Infographics are a great benchmark for customer data visualization

Unless you’ve been living under a digital rock these last couple of years, you may have noticed the very interesting trend to represent data and statistical information in a form called Infographics. These graphical representation of data are an excellent method of taking complex graphs, statistics, and information and filtering it for general consumption. Banks, and others, can learn a thing or two about filtering and data visualization from this trend.

Another great approach is that of the iPad app flipboard which aggregates streams of information in an easy to consume format. Could you provide a more interesting way to display account and credit card usage information, perhaps linked back to offers from specific retailers too?

The last step will be all about management. This is the ability to respond to a trigger, an event or a critical piece of information and proactively suggest a response to the customer that builds trust and the service relationship.

Get these right and you’ll have a relationship dashboard that connects you to the customer in a way that no bank does today…