Who’s Brett King? From his site:
A regular speaker at the top global conferences for financial services, King is an acknowledged expert on wealth management, customer experience and retail channel distribution strategy. He publishes regularly in his role as industry advisor on Huffington Post (Business News), Internet Evolution and his own personal blog at www.Banking4Tomorrow.com.
Technological innovations are introduced and accepted with increasing speed. While it took television 22 years to reach mass adaptation, it took the PC 14, Internet 7 and Facebook 2 years. With current mobile developments (iPhone, Android), it’s clear that the direction of all these innovations is to give people access to information and services at all times and places.
Result is that the use of technology changes the behavior of people as customers. We have seen this in many areas; we order products like books and tickets online. We expect excellent service, and if we don’t get it, we let the world know through blogs and twitter.
Financial Services, and especially banking, is not keeping up with the changing demands of customers. The only reason they get away with that is that the barriers to entry the banking market are very high. This is about to change, as customers become less reluctant to change bank, and new companies like Google, Facebook and Amazon develop the resources and the incentive to enter the market.
I had these two ideas I thought I’d write separate posts about:
1. You need to own the transaction platform
2. Why transaction-oriented online banking is stupid
Those two statements seem slightly incompatible but I don’t think they are.
As for the first one, with ‘you’ I mean the bank, or any institution that aspires to be like a bank. I wrote about Google Bank but apparently iBank will soon be here too.
Why do you need to own the transaction platform? What is that anyway?
In an article on HBR yesterday, the question was asked: “Do we really need banks?”
I never gave this much thought, but most people in emerging economies, and even many people in developed ones, are ‘unbanked’ – they do not have a bank account.
For banks it is too costly to reach out to all these people and turn them into customers. But recently an alternative is becoming more and more popular; a money transfer service provided by mobile phone network operators.
For example, in 2007 Safaricom launched “M-PESA” in Kenya.
What if Google were to start a bank?
This is not a new idea; first references that I could find were from late 2006, when at a conference in October finance professionals considered it a threat:
Another mention in 2007:
And then in 2008 a dutch reporter published the fact that Google has had a banking license in the Netherlands since 2007:
Recently Brett King brought it up again in Would Google make a better bank?