Umair’s blog is one I just came across recently.  He is provocative, thoughtful, and insightful. This post is layered with insights, that will take me days to unravel, but Banks ought to take note of this quote “Goople findsvalue chains and industries in deep strategy decay …. “.  Banks are in strategy decay, so they are vulnerable.  It doesn’t have to be from Google, and thats not my point.  My point is that they are vulnerable to alternative strategies.  Edge Economy – Umair And that DNA opens new paths to strategy and advantage. Google finds value chains and industries in … Continue reading Google finds value chains and industries in deep strategy decay

In a piace entitled, ‘The Financial Sector returns to Earth’, The Economist manages to capture the current banking environment nicely.  From 1982 to 2000, a balanced portfolio of 60% stocks, 35% bonds and 5% cash delivered average real returns of 14.3%, according to BCA, compared with an average of 3.4% during the preceding 80 years. Fund-management groups and the trading desks of investment banks both benefited from this strong environment. While the article falls short of suggesting an all out crisis, it does suggest that things have changed from what we have seen over the last 25 years.  However, he … Continue reading Banking might just be going back to being boring

A thoughtful post on the nature of innovation, relative to globalisation, making the point that while the world appears global, the reality is quite local for effective innovation. The innovation levers technology and communication for the global aspects. One example is Zara. Based on NW Spain, they have developed a global strategy of successful stores, but the innovation is centred in Galicia. Irving Wladawsky-Berger On average, it takes nine months to develop a new fashion product and get it into stores. Zara is able to shrink that number to a remarkable four to five weeks. Consequently, it can assess in … Continue reading Innovation is local in a global context | case study – Zara

Just came across Umair’s blog today and wanted to reference it. He is beginning a discussion on corporate DNA and branding. Quite fascinating …. the decaying brands he isolates are Microsoft [tried to control the product standards], and Starbucks [tried to control the value chain]. Umair Haque Google and Myspace are perhaps the most obvious; Craigslist and Wikipedia the most radical; and Zara perhaps the least well understood. What all of these players have in common is that, as embryonic revolutionaries growing up in an era of turbulence, they’ve developed radically different DNA. So of course, I am thinking about … Continue reading Decaying brands, and implications for Banks

Tom Groenfeldt on techandfinance.com highlights four predictions in a recent Gartner report, that are quite provocative. Taken together, they suggest mammoth changes to Banks as we know them. Click through for Tom’s take on them. I expect I will do same later. techandfinance.com “By 2010, social-banking platforms will have captured 10% of the available market for retail lending and financial planning.” “By 2010, 10 percent of banks’ revenue from retail payments will be supported by competitors such as PayPal.” “By 2010, U.S. banks will start shutting down their full-service mobile-banking channels.” “By 2011, centralized retail core banking applications will cease … Continue reading Banking predictions portend big change – Gartner

Fascinating research and conclusions picked up by Paul at Finextra. The implication is the shift towards greater self service by people for financial services that previously would have required advisors or brokers. Winners are price comparison sites, and advice from friends and family. Finextra But if consumers aren’t turning to their bank for financial advice, where are they going? Online price comparison Websites are one obvious source of information. The other is friends and family. This change in consumer attitudes helps explain the success of a new generation of non-bank social platforms such as those operated by Zopa and Prosper, … Continue reading Consumers getting financial advice for themselves and from friends and family

Interesting review of the customer view while trying to use the Barclaycard OnePulse card.  Dave makes the point that the merchant benefits are clear, but the benefit to the consumer at the point of purchase is confusing, and in this case slower than cash. Digital Money Forum: Slow penetration When I waved my card at the reader, nothing happened. The woman serving me asked if I really wanted to use the “terminal”. I said yes. She said: “It will be an extra five pence”. Whether it’s the lack of suitable terminals for the kinds of merchants, miscommunication between acquirers and … Continue reading e-cash applications need better design for consumers to accept

Interesting take on mobile alerts. Uptake is relatively small at 24%, and of those almost all are via email. Mobile alerts are almost non-existent. The reason is that the alerts have not addressed what customers actually want, and they resist paying the mobile fees for alerts they don’t want. Time to rethink ‘mobile strategy’ and ‘account alert strategy’ for most Banks. Interest in Text Alerts Waning – 02.01.2008 – Bank Technology News Article What banks can do better at, says Forrester analyst Brad Strothkamp, is to give customers alerts to activities they can’t discover through other channels, such as such … Continue reading Account alerts are not addressing customer needs

Egg (CitiBank) credit card does a very poor job at cancelling 161K cards.  They provide the reason that peoples credit history has deteriorated, which sounds legitimate but from the litany of quotes on this BBC page, it sounds more like they cancelled people because they were paying off their balance in full, thus making them unprofitable.  However the opposite is true. If the example I note below is anything to go by, this is a major screw up. BBC NEWS | Business | Egg customer anger at credit move Egg says 161,000 cards belonging to people whose credit profiles have … Continue reading Egg customer anger at credit card cancellations

The EU is displaying innovation in many ways, and this one really struck me.  They are standardising credit across the EU, but the mention of this new instant loan via text intrigued me. Consumer loans market opens to competition The new legislation covers loans from €200 to €75 000. It does not cover mortgages and charge cards. The lower limit was set to cover quick loans made by mobile phone text messages. This practice, which means money can be transferred to the borrower within 15 minutes, is on the rise and is particularly popular in Sweden and Estonia. Continue reading Instant small loans via text message