Why Financial Institutions Need Automated Deployment

heartbleed-new-backgroundIt’s a thing of mine… peo­ple talk about prod­ucts and their features/functionality and expect peo­ple to be able to relate those fea­tures to what mat­ters to them.

Let’s use Heart­bleed as an oppor­tu­nity to under­stand a real-world appli­ca­tion of CA LISA Release Automa­tion and how it would help finan­cial insti­tu­tions be more com­pli­ant with their reg­u­la­tory envi­ron­ment. As a bonus, we’ll see how auto­mated deploy­ment can make finan­cial insti­tu­tions’ mobile appli­ca­tions more secure in the future. [Read more…]

The Bank’s True Competition Isn’t Other Banks

WalmartFirst Star­bucks offers dig­i­tal pay­ments, now Wal­mart is offer­ing low-cost money transfers.

Banks aren’t only com­pet­ing with Sil­i­con Val­ley, they’re com­pet­ing with smart com­pa­nies who see a tremen­dous opportunity.

Why is it so hard for big banks to inno­vate their way out of this chaos?

Don’t you think banks should do pay­ments or money trans­fers bet­ter than some­one who’s never done it before?

If the banks are not care­ful, they’re going to be cut out of the value chain com­pletely (though every so slowly):

  1. Trans­fer­wise is 3 years old and has sent over £1B. “We dis­cov­ered that to get rid of these charges we sim­ply needed to skip the banks altogether .”
  2. If the mobile phone is the new bank branch, why wouldn’t the tel­cos own your bank­ing? Espe­cially if pay­ments are made via SMS.
  3. UK News­pa­per launches wealth man­age­ment ser­vices. Piv­ot­ing on trust: When it comes to money, trust is cru­cial and The Times and Sun­day Times have been the papers of record for the lat­est money, invest­ment and busi­ness news and advice for more than two hun­dred years…”

Unfor­tu­nately for banks, it’s not just about com­pe­ti­tion. It’s also about a chang­ing cus­tomer & mar­ket pro­file:

Mil­len­ni­als don’t have the same bar­ri­ers to switch­ing banks as their pre­de­ces­sors & they view safety as the oppo­site of inno­va­tion. Mean­ing, they’re not even going to think of the banks when they explore inno­v­a­tive alter­na­tives to tra­di­tional bank­ing products.

Mobile Banking vs Mobile Personal Finance

Bank Branch of the FutureFor the last few days, I’ve been wondering…

Why are there are never any mobile bank­ing apps on any lists of top per­sonal finance apps?

Here are a cou­ple of lists in no par­tic­u­lar order:

  1. Dig­i­tal Trends
  2. PC Mag

Prob­a­bly because banks think of them­selves as bank­ing com­pa­nies, not per­sonal finance ones. It’s unfor­tu­nate, because there’s so much value in help­ing peo­ple with their finances, rather than sim­ply giv­ing them a place to do their banking.

Speak­ing of places to bank…

Bank branches are a drain on banks and seem to be dis­ap­pear­ing. There’s a Dil­bert in there some­where, with pointy hair man­agers doing some mean­ing­less ROI and try­ing to fig­ure out how to jet­ti­son all the real-estate rather than fig­ure out how to cre­atively use branches to cre­ate a bar­rier to entry for com­pe­ti­tion and a source of dif­fer­en­ti­ated value (think Apple vs Dell, should you really care to have a tech­ni­cal comparison).

In an inter­est­ing arti­cle on the future of bank branches, we see this gem of research:

Focus groups showed Chase “Over­whelm­ingly, cus­tomers headed to branches for advice rather than to sim­ply go to the tellers.”

I inter­pret that insight as look­ing for advice in-comparison-to per­form­ing a transaction.

Trans­ac­tions are to bank­ing, as advice is to per­sonal finance.

Banks are com­pletely miss­ing the point when it comes to mobile. Peo­ple don’t only want bet­ter trans­ac­tion capa­bil­i­ties (trans­ac­tions are table stakes). They want bet­ter advice.

In fact, per­sonal finan­cial advice is where there’s a ton of inno­va­tion hap­pen­ing.

And, it’s prob­a­bly not just per­sonal finance advice, but bet­ter advice on how to take advan­tage of their bank’s ser­vices. I find all the ser­vices banks offer con­fus­ing, and I’m quite good at this stuff.

Cross Sell­ing vs Self-selecting Into an Ecosystem

The other thing about ask­ing banks for help that needs to change, if I ask the bank itself for advice I feel like they’re just try­ing to sell me more products.

If these banks want to copy Apple (as the arti­cle points out) they need to fig­ure out how to shift from cross-selling to a strat­egy of enabling peo­ple to ‘self-select into their ecosys­tem.’ (I can’t fig­ure out how to make that roll off the tongue any eas­ier, for­give me.) The end result is the same, but the approach is dif­fer­ent. With cross-selling, staff look to push prod­ucts on cus­tomers. With self-selecting, staff look to delight cus­tomers so that they choose to do more-and-more busi­ness with the bank.

The Pro­sumer

Finally, research shows that when peo­ple are really good at tak­ing advan­tage of their bank’s fea­tures they have a more pos­i­tive view of the brand. These peo­ple are often called prosumers.

Using branches to dis­pense advice & delight­ing cus­tomers instead of cross-selling them sound like two good ways to pro­duce more pro­sumers, which should, in turn, cre­ate a much more favor­able brand value proposition.

It’s Global

These changes are not lim­ited to the US by any mea­sure. In fact, inno­va­tion is hap­pen­ing in both Asia & Europe at a much quicker pace.

Funny thing is, UK banks weren’t sur­prised by the rapid shift to mobile trans­ac­tions.

Bring Your Own Software is a Misnomer

The con­sumer­iza­tion of IT is not just about bring­ing your own devices. I like to think it’s about a lot more — it’s about bring­ing your own expec­ta­tions on how to best use tech­nol­ogy to get your job done. In the future, that means that those so inclined will be able to write their own soft­ware to solve their own prob­lems at work, just like peo­ple today cre­ate Excel for­mula or Word templates.

As I briefed a writer about this idea for a paper I’m work­ing on I used the exam­ple of peo­ple not only want­ing to bring their iPhones to their banks to do their bank­ing, they’re going to want to bring their per­sonal finance soft­ware appli­ca­tion too. This is an exam­ple of using API’s to sep­a­rate out the user expe­ri­ence… cus­tomers are not tied to the bank’s nar­row def­i­n­i­tion of their bank­ing platform’s inter­face, they can cre­ate or use their own. What these cus­tomers want is pro­gram­matic access to their bank­ing infor­ma­tion and the ser­vices they use to take bet­ter advan­tage of what the bank has to offer.

A Busi­ness Ben­e­fit: Cre­at­ing More Prosumers

There’s good research that credit card pro­sumers, peo­ple who know how to make the most of their credit card ben­e­fits, are more loyal-to and have a higher satisfaction-with their banks.

It’s not just about the API tech­nol­ogy that gives peo­ple dig­i­tal access to their bank, it’s about cre­at­ing more pro­sumers to drive brand satisfaction.

Of course, bring­ing your own soft­ware is about more than just bank-consumer inter­ac­tions. It’s about bank-partner inter­ac­tions like we saw last week with Ama­zon & Sam­sung, and it’s about bank-employee inter­ac­tions so that com­pa­nies can do more with less.

Bring­ing Your Own Soft­ware is Bor­ing Unless the Soft­ware They Bring Con­nects to Enter­prise Data & Processes

After shar­ing this exam­ple with the writer, he for­warded me an arti­cle on the trend to “bring your own soft­ware” as a way to improve employee effi­ciency.

Frankly, I think this arti­cle com­pletely misses the point. It’s not about bring­ing your own soft­ware as much as it is con­nect­ing your own soft­ware into the “dig­i­tal assets” of the com­pany you work-for, partner-with, or are a customer-of.

The arti­cle talks about Asana as a great exam­ple of an inno­v­a­tive tool for reduc­ing email that employ­ees who are over­whelmed by email are choos­ing as a way to get out from under the email del­uge. Boring.

What if using secure API’s any employee that chose to could tie an Asana project plan into a project cost struc­ture to do their job bet­ter? That’s the real power of bring­ing your own software.

It’s about the data and the processes that make an orga­ni­za­tion tick, not the silly tools that we use to keep track of our to-do-list and how we work with oth­ers. When the soft­ware we bring can inter­act securely & eas­ily with the organization’s data and processes, then we’ll really be doing some­thing interesting.

Affordances Matter

I’ve been look­ing for this phrase for a long time:

It is func­tional, but it just doesn’t work.”

The phrase comes from an arti­cle titled “affor­dances mat­ter” and uses the iOS key­board shift key as a per­fect exam­ple. I’ve been writ­ing about this in a more round­about way in my series on “It’s Just Not Work­ing.”

Those of us who design tech­ni­cal solu­tions to real-world prob­lems need to make sure that they’re both func­tional and work — and they’re not always the same thing.

PS I sus­pect that Samsung’s fin­ger­print reader is going to be one of those things that are highly func­tional, but that time proves sim­ply doesn’t work.