NCR & Digital Insight – Trouble in Paradise?

NCR & Digital Insight – Trouble in Paradise?

Late last year, NCR announced the acquisition of Digital Insight (DI). It’s been quite the ride for DI as they are on their third owner in a very short period of time. Apparently the ride hasn’t been very smooth for DI bank customers – we have heard from a number of them regarding digital banking outages. The press has gotten wind of this as well – Fairwinds Credit Union customers cope with online-banking outages.  

Take a peek at the list of disruptions notices posted on the Fairwinds CU Facebook page.

Kudos to the CU and its President for being transparent and communicating with their customers.

What’s Next for Google Wallet?

What’s Next for Google Wallet?
Last week saw a number of important developments at Google Wallet. Let’s recap what we’ve learned:
  • Osama Bedier, the Head of Google Wallet, left the company.
  • Google Wallet scrapped its plans to introduce a physical card to support purchases at the physical POS.
  • Then, at Google I/O Developer conference, the company made a series of announcements about new features, such as:
    • Ability to send money to friends with Gmail and Google Wallet.
    • Instant Buy Android API designed for merchants and developers selling physical goods and services who are looking to simplify the checkout experience for their customers.
    • Storing of payment credentials in Chrome browser to speed up check out online.
    • Wallet Objects API to connect any loyalty programs, offers and more to Google Wallet.
So, what do we make of it all? Well, it seems that Google’s strategy for physical stores remains in limbo. When Google re-architected its wallet solution it solved some of the challenges, such as provisioning of payment credentials by moving them to the cloud. However, its continued reliance on NFC means that it remains difficult to scale rapidly. Google was widely expected to follow PayPal’s strategy of introducing a physical card for its account, but for whatever reasons that announcement never materialised. While Google is not pulling the plug on physical POS payments, it now appears to have re-directed its efforts to facilitating payments online, whether through desktops or mobile devices. Some observers likened its strategy as “death to PayPal by a thousand cuts.” But I think Google is taking on more than just PayPal. It seems to follow a “best of breed” approach by incorporate interesting ideas from various players:
  • With email payments, Google takes on PayPal, but also many other P2P players, from Popmoney to Dwolla.
  • Instant Buy Android API sounds remarkably similar to and other digital wallets designed to help customers fill out their payment and shipping details at a click of a button.
  • Leveraging the browser to facilitate check-out reminds me of what Dashlane is offering via its browser API.
  • And Wallet Object API is almost a direct take on Apple’s Passbook down to notifications using the location services.
Google started its payments journey in the online space (remember Google Checkout?), went after the physical POS with Google Wallet and is now coming back full circle to payments online. Google’s multiple assets, such as the Android platform, Gmail and others, combined with these new ideas certainly seem like the right ingredients to succeed. However, as every cook knows, ingredients alone are not a gurantee of success. And it will be merchants and consumers that will decide whether they like the taste of the latest offering from Google Wallet.

Mobility and the Channel Challenge

Mobility and the Channel Challenge
I’ve had several recent conversations about channels and mobility. The discussions often start from different points, but they all are trying to get at how to characterize and address the differences between online, smartphone and tablet. Like many knotty issues, it’s important to frame the question correctly. I’d like to frame this issue by asking, “Is the notion of channels still relevant to consumers?” My response is that not only is the traditional notion of a channel outdated, its continued use can be detrimental to banks. I’ll give you my bullets, and then elaborate a little more. • Mobile is part of the digital channel, which today consists of online, smart phone, text and tablet (and even some elements of ATM) • Devices are ways to access the digital channel; each has distinctive characteristics • Banks should formulate their digital channel strategy holistically; strategies and tactics with respect to one device will affect, and should inform, others Channels originally existed because they were distinct means of interacting with customers for different sorts of transactions. The original channel was the branch. Then came the call center, and ATMs, and then online. Each of these channels had a different group looking after it within a bank. And yes, they ultimately came together nominally under the head of retail banking, but banks were (and still are!) tremendously siloed organizations. That siloed organizational structure has persisted, even with the advent of online, mobile phone and tablet. In the worst case, different channel organizations can work at cross purposes due to their different success metrics (who wants to have their domain shrink, for example?). Consumers, on the other hand, don’t think in terms of channels. They simply think in terms of getting access to what they want, when they want, and how they want it, and generally as easily as possible. Conditioned by great digital experiences from retailers and other service / app providers, they wonder why banks can’t deliver equivalent services. Part of the reason is that the different product organizations in a bank don’t coordinate very well, and as each pursues its own agenda with different emphases, the customer is underserved. Banks are getting to the point where they truly think of the needs of the customer, rather than the needs of the bank, first. They need to think about the customer and her use cases (checking a balance while waiting for the bus is mobile phone; looking at a check image on the couch is tablet; serious bill pay is a PC online, for example). But there’s ultimately just one digital channel. There are different ways of accessing the digital channel, but they should all derive from the same source data, and they should all ultimately provide the same experience to consumers – not the literal experience, but one that’s comparable in terms of general navigation, look and feel, and vibe. And that’s where the art comes in – the experience is visceral, subjective, and unquantifiable — and the customer doesn’t care through which channel the bank deems the experience to have been delivered.

Reporting from the Celent’s Banking event in London

Reporting from the Celent’s Banking event in London
Celent Banking team has kicked off 2011 with a bang. In addition to the flury of new reports, we hosted an industry event in London. Management of multiple channels continues to be high on many of our clients’ agendas, and so we decided to focus on the multi-channel theme and called our event “Branch is Dead; Long Live the Branch.” Bart Narter, Celent’s Senior Vice President for Banking opened the event and introduced two distinguished guest speakers representing two sides of the argument. Batting for the “Branch is Dead” corner was Mr. Steve Townend, CEO and co-founder of MoBank, an independent mobile money management app in the UK. He asserted that “customers increasingly want and need to control their finances in ways that allows them to get on with their lives” and claimed that mobile is becoming an important financial management tool for many consumers. At the other side of the argument was Mr. Anthony Thomson, co-founder and chairman of Metro bank, the first UK high street bank to be launched since Queen Victoria ascended to the throne. Given the Metro bank’s core values of convenience, service, transparency and engagement, branches are very much a cornerstone of the bank’s value proposition. It was a hard act to follow for the two Celent’s Senior Analysts, but Bob Meara and I accepted the challenge. Bob painted the vision of the branch of the future, describing it as a “journey, not a destination”. While bank branch renewal programmes can take different shapes and forms, Bob is yet to find a bank that is happy to say “we are done”. And I began with the assertion that the UK banks can do more with their investment into the online channel and use the channel for more than basic customer self-service. I shared with the audience some of the lessons from the other markets, such as how banks are re-claiming the P2P payments. However, eWise payo, UK-focused Online Banking ePayments solution represents perhaps the biggest opportunity for the UK banks to leverage their investment into online banking and Faster Payments infrastructure. Now is the right time for the UK banks to make a decision whether they should adopt such a solution. Finally, the event concluded with a mobile banking and payments panel, featuring Celent analysts from around the world, including France, Japan, China, Korea and the US, which not only affirmed the rising importance of a mobile device in financial services, but also demonstrated the diversity of development patterns around the world. And that is the value that Celent brings to its clients – a global insight based on deep local expertise in multiple markets. If you attended the event, we hope you enjoyed the presentations and networking opportunities. If not, we missed you and hope to see you at our next event – don’t forget to check our website for the latest schedule.