Late November saw the announcement of a new platform launch, The Digital Banking Club. The keynote address from Magnus Lindkvist was billed as a speech which would challenge our way of thinking about the future… and it did. Billy Bambrough reports on the launch of The Digital Banking Club and Intelligent Environments’ new product, Interact
The Digital Banking Club, to launch in January 2013 and registrations for which are now open, will help people within the financial services industry keep up-to-date with the fast moving world of digital banking, where every week there is a new innovation which promises to change the way we bank. In his keynote speech Magnus Lindkvist explained what we can be doing to stay at the forefront of the digital banking revolution.
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Lindkvist – a self proclaimed trendspotter – captivated an audience who were unprepared for the meta-physical and philosophical journey he was to take them on. Lindkvist opened his talk by explaining that the problem we have in business when trying to stay ahead of the curve is that we cannot understand the world by current hype and headlines. Distance creates clarity, he told us.
"The problem is with timespan. We are human centric when it comes to time. Our way of measuring time is out of sync with many things, such as climate change, because things are a slow gradual shift and for us they become very difficult to see, they become invisible."
The challenge, he explained, is that we have to make long term decisions even though we do not know what the world will look like in the long term. In the past you could make long term decisions and be relatively confident that the world will stay the same. Today things change very quickly and making long term decisions is hard.
The answer to this is to understand where the future comes from, but, no one could have predicted the success of the Rovio mobile game Angry Birds.
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By GlobalDataLindkvist warned, "We will be taken by surprise by the green pigs of the future."
According to Lindkvist there is something we can do to avoid being taken by surprise; there is a choice to be made for the future: do we want to compete or create.
If we compete, it means listening to customers and giving them what they want. A lot of people are trying to do this and most companies are so busy being competitive that they do not survive. What was important in the last cycle of innovation will be not important in the next.
When you try and create, people will not like you for it, because if you succeed then a lot of people will have to play catch up and learn the new rules of the game.
"Some ideas", said Lindkvist, "seem crazy when they are new. People will dislike an idea when it is new as it is trying to upset the status quo. They think they know everything and if the idea was good then it would have been done already."
But we cannot know how humans will change. Karl Popper said we can’t know what we will know in the future because if we knew that we would know it already.
"I meet", said Lindkvist, "a lot of senior executives and I ask them what they think the future holds for their company. Here is what they say:
"Something, something…social media, Facebook Twitter, something, something Generation XYZ, something, something, emerging markets, Asia, something, something sustainability and financial services, something, something, Compliance.
"It sounds more like last weeks headlines in The Economist. People are reshuffling headlines instead of exploring where the future really begins."
These people are competing, not trying to create, not trying to be the next big thing.
Lindkvist closed his keynote by offering three important things a company should do if it wants to at the forefront of the next cycle of innovation:
1. Experiment. True innovation requires risk;
2. Recycle Failure. The first attempts to use new ideas usually fail at first but succeed years later, and
3. Patience and Persistence. No new idea will work straight away. You will have to spend time convincing people of its worth.
Lindkvist concluded: "Many small things fade, many small things remain small. If you are persistent then you might gain a few followers, people will doubt you, after awhile you might get a few more fans, the doubters will become involved, eventually everyone joins in."
Douglas Blakey, editor of RBI, warned the audience that there are tough times ahead for retail banking. The industry needs to make a change to its business model if the banks are to remain the global financial leaders.
"EU regulation is rising. Customer service expectations are rising. Everything is always the banks fault. Retail banking is facing its biggest challenge for a generation. The majority of banks recognise that their business model has to change.
"Digital is to play a crucial role if any bank is to achieve that challenge."
Blakey explained that he was not expecting the bank branch to die but it does have to change what it is offering. As more people want to use mobile banking, lenders have to make sure they are using their resources in the right area.
Blakey told the audience there was huge scope for the banks if they get this right. Despite everything that has happened, PPI miss-selling, LIBOR, bonuses, banks remain the most trusted provider of financial services.
New entrants are coming in and they will get a large amount of publicity but they will not going to be taking a significant market share of transactions. This leaves the banks free to move into the digital banking sector, if they take advantage of the opportunity.
The Digital Banking Club is here to help them to do that. It will offer banks the opportunity to stay up-to-date with news and innovations in the financial services industry.
Blakey said: "We want The DB Club to be the first place to go for all information on things digital financial services focused. It will provide forums, face-to-face and digital for people with a common interest on all; things related to digital banking and mobile payments.
"We want members to chat to their peers, hear from industry experts at club meetings, learn, share lessons, experiment learn what the digital channel really can deliver."
Helen Clulow, head of innovation at Intelligent Environments (IE), spoke about what IE was doing as a company and what the company has achieved. Communication has been reinvented repeatedly over the last few decades and our money is being reinvented in the same way, Clulow told the audience.
Clulow described what she called the 6 Pillars of digital money.
"It’s not rocket science," said Clulow, "It forms everything we’ve done as a software company. It is behind our user experience, the code and our fundamental plan for our strategy.
1. Give me up to date information when I want it;
2. Help me move my money around, simply and easily;
3. Send me the offer if I want it at the right moment in time;
4. Let me communicate with you if I want to, when I want to;
5. Support me when I need help, and
6. Keep my information secure.
Clayton Locke, the CTO at IE, explained the technical aspects of Interact and highlighted how the offering stood out from its competitors.
"It’s a new eco-system driven by mobile but it still uses banking grade resilience and security. It is adapted to compete in a market where people are looking to find new ways to interact with their money."
The problem they had come up against was called configuration complexity.
This challenge, Locke explained, is caused by all the new and different platforms that exist out there. We have to ensure all of these platforms are compatible with our software. And if the problem isn’t solved properly in can become very costly. Furthermore, the platforms are changing almost daily, which requires the software to be able to change with it.
Locke said: "At IE we addressed configuration complexity in three ways:
1. We make sure that the User Interface is workable across all the devices in the environment and that it is configurable by our clients;
2. We handle the security. Security is front of mind for us, our clients and the people using the app, and
3. We simplify the integration between the front end and the back office systems."
IE looked at over 100 money apps and picked out the best functionality and built those into the templates in its software.
Locke added: "Our security model is an important differentiation of our product and we are continuously evolving our security model to make it the strongest in the industry."
David Webber, managing director at IE, summed up Interact by saying: "We have a single product with future proof architecture solving the configuration complexity problem and therefore allowing us to deliver the service across any channel you choose. The important thing is the research and the architecture that allows us to evolve Interact over time."
Intelligent Environments, working with its partners Experian, First Data, FIS, TSYS and Unisys, has been building digital money technology for over 15 years. IE’s clients include financial services organisations, retailers and telecom providers.
Intelligent Environments’ new product launch: INTERACT – Money management software for a connected money universe
Digital banking customers can access their money across all digital channels, and enjoy the same, seamless user experience. Interact can help customers to reduce costs, streamline operations and future-proof their business.
Interact enables customers to connect with their money on any device – iOS/Android smart phones and tablets, browsers, desktops, smart TVs and social networks.
This means that they can deliver all channel interactivity through a single platform, and manage customers through one dedicated management console – the Interact Hub.
It is an all channel money management designed with customers, and their brand, in mind.
As well as a valuable tool for customers, Interact has been designed to represent a key touch point for customers’ brand. That is why IE offers a suite of user interface designs that allow clients to configure the interface to meet their customers’ exact needs, and accommodate their own brand identity.
Interact is a single digital money platform to control costs and accommodate growth.
By removing the need for bespoke software systems, offering a single point solution and working with existing back office systems, Interact aims to reduce operational costs. Interact’s future-proof design will adapt to any operating system upgrades and new devices – meaning products, and eco system evolve seamlessly.
To register your interest for The Digital Banking Club, go to www.thedigitalbankingclub.com
