Consumer Banking: The Native Phase

This morning I am talking to a group of consumer banking folks who have come together to talk about all things digital. The primary focus for them during the day will be on such things as “omni channel” marketing (which sounds a bit ominous) but my role will be to draw a broader picture of the future. I asked yesterday on Twitter what I should talk about and got lots of terrific replies — thanks!

Here is how I am planning to frame up my talk. Banking today still largely seems to be in the “replication” phase where you take what you did offline and move it online. The next phase will be the real “innovation” phase in which old structures get replace with new ones that are native to the Internet. Here are the main trends that I am planning on mentioning:

1. New payment mechanisms, such as Bitcoin and Dwolla that are aimed at driving the cost of payment close to zero and the speed close to realtime.

2. P2P lending and other crowdfunding mechanisms that are replacing traditional (leveraged) credit extension and capital raises (and will likely also impact insurance).

3. As a combination of #1 and #2 above, the unbundling of interchange fee structures which historically combine different elements

4. The emerging integration of mobile payments into specific apps (as opposed to the expected generic mobile payment).

5. Two factor authentication, probabilistic identity and machine learning as critical elements in any fraud strategy

Probably not exactly in this order and I may add something on the fly depending on audience reaction (including likely a reference to the problems ahead arising from the disappearance of work). This is a closed doors talk so I am afraid no video will be available afterwards.

Posted: 4th November 2013Comments
Tags:  banking innovation

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