The worst kept secret in the financial services sector is how much Google wants to get into banking. Of course, it’s a bit of an old secret too. Google is technically already in banking. They own half of Lending Club, a P2P consumer lender. The reason bankers are scared of Google getting into banking outright is that Google is so much better at data analysis than any bank. Their ability to collect everyday pieces of data and turn them into revenue is still amazing – even by today’s standards. But, as I point out in my book, Seven Billion Banks, in order to compete in the future, Google will have to go mobile with their banking services. Right now, Google’s Android devices (can) use a combination of GPS, IP addresses from wireless networks nearby, and the nearby mobile network to help them pinpoint your location. So they have the basics of a location-based platform for banking. But what’s missing? I think 3 things they will have to nail perfectly in order to be a formidable banking foe. 1. Get the Location Right Google does a pretty good job of knowing where you are. But they’re not perfect. If the IP address of a wifi network is incorrectly linked to a geographic location, Google will “find” you in the wrong place. Sometimes, several states away. If you’re on or near a plane or cruise ship, forget it. They will place you somewhere across the globe. The theory should be that there is enough information for Google to get this right, but as of today, they don’t. If you’re on a...
If any technology deserves the award for “most missing its potential”, it’s Personal Financial Management (PFM) software. Many analysts and consultants have talked about the abysmally low adoption rates for PFM (here, here, and here.) Research by Javelin points us in the direction as to why there’s a problem. We’re not giving consumers what they want. Consumers tell us that they want all their account information in one place – even from other banks. They also want alerts and help with shopping and card reward usage. Basically, they want help making decisions. That’s why PFM fails today. It provides lots of information, but no help making decisions. Mark Schwanhausser, director of multichannel financial services at Javelin Strategy & Research puts it this way: PFM will appeal to a mass audience of online and smartphone-toting consumers seeking help with immediate, on-the-go, everyday financial tasks and decision-making. It is only a matter of time before PFM will be virtually ubiquitous, offered not only by FIs but also by billers, mobile carriers, insurers, retailers – anywhere consumers make financial decisions. The PFM of the future Mr. Schwanhausser describes here is what I called Decision-Oriented PFM. I describe it in my book, Seven Billion Banks. Very few PFM tools are integrated into the mobile experience. Instead they sit on the desktop version of the online banking application – when they’re available at all. The concept that consumers want alerts to help with decision making is consistent with the mobile strategy I laid out in an earlier article. Those push alerts are extremely critical not just for adoption, but for the actual value created...
In early 2014, Chris Skinner introduced the concept of the “intellisensing bank.” He talked about the bank that interacts with you 24/7, but only if you want it to. Of course, in order to interact with you everywhere you go, it needs to go with you everywhere. Hence, the mobile banking app. But how many mobile banking applications are smart enough to be intellisensing? Mobile banking applications need to have three major features: pull, push, and orchestration. Measure yours against the three and see how you do. Pull Pull is the easy one, and probably the one your mobile banking application has down. If I request interaction with the bank, I get it. But it’s more than just providing information. In order to be an intellisensing application, it needs to provide me that information in context – the way I need it now. For example, if a customer is out shopping and has just had their debit card decline and accesses their mobile banking application, what do you think he wants to know or wants to do? See and transfer balances, of course. So that feature should be the first thing they see. No sense in providing the same menu all the time and add three more clicks to the process. They say data does not always mean information. Well, information does not always mean helpful either. Unless that information can lead to a decision or action which adds value for the customer, then it’s useless. Push Push is one that mobile application are just starting to figure out. Providing time-sensitive alerts are critical to filling out the banking experience....
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