Category: Banking

Burdened by ideas

*SOUND THE NAVEL GAZING ALARM* While writing my last post on PFMs I was struck by how certain ideas and themes recur in my writing and thinking. I am starting to get the feeling I am burdened by these ideas. My brilliance is being hampered by these synapse occupying visions of majesty so much so that my humility has been diminished. Self mockery aside the real reason they are a burden is due to the lack of progress I have made with turning them from ideas stuck in my head to anything resembling reality. I wrote about the problem with ideas stuck in my head last year and one of the ideas I will talk about in this post is one of the ones I refferred to. In that post I said I wanted to protect the idea:

[I] feel a need to evangelise this idea and to ensure it is not crushed by the design by committee types or overlooked as just a feature that can be dropped.

It of course got killed. For this and other reasons I have decided it is time for me to publish these oh so burdensome ideas. Be rid of these foul demons in the vain hope that someone agrees they are good ideas and has some sort of vision of how to make them reality. These ideas are of various ages and I think this list is probably in oldest first order.

 

Identity – Clearly this is a huge topic and I am interested in all facets of identity but the bothersome idea I have harboured for several years is why can’t I logon to my bank website? Yes I can log on to Internet Banking but that is different. For most banks the website is a completely different entity to its online banking portal. If I want to save a quote, view the terms of my insurance policy and potentially view my balances I should not need full strength security and validation. All quite subjective with regards to how secure different types of interaction should be but access to some forms of interactions need to be simpler (it could be argued that it’s the customers choice as to what level of security they desire). Also you have the whole personalisation angle (only show me adverts for relevant products, paint the site black if I am a certain grade of customer etc) to this but I am not so interested in that.

Some banks operate other logons on their websites or external parts of their site such as the logon for HSBC’s Advance offers  or the first direct lab. I suspect interactions here are not well linked to customer profiles or CRM systems because of these logon issues. They also require yet another user ID and password which everyone loves.

What about non-customers visiting a banks site? Why not have a level of registration/identity to allow people to research products, begin applications and then once they take out a product you can upgrade the logon to a level that allows more secure transactions? Don’t make me fully authenticate for everything and don’t leave tracking to cookies and chance for everything else.

Clearly identity is a much bigger thing but I don’t want to get into all that NSTIC / Digital Asset Grid type stuff just yet or even the connection of social network identities or the thought of Klout scores linked to product offerings (shudder). I just want basic federated logons for bank websites and any 3rd party sites the bank operates.

 

Notification Systems – I have written quite a detailed post on this idea a while back. The bottom line is that in banking today there are many types of events that occur but very few of those events are subject to any form of tailored notification to me as a customer especially if they are not financial transactions. If a specific transaction arrives in my account can I be notified via SMS? If my account balance drops below a certain limit can I get a DM on Twitter? If I miss a call from my RM can I be notified via email? If my mortgage application progresses to the next milestone can I get a message sent to my Internet Fridge? If someone tries to logon from a country or using a device that is not mine can you alert me via every channel available? (why don’t banks have an audit trail that the user can see showing their logon activity ala Gmail?) Today the notifications available to customers are fairly limited. Maybe some basic SMS or some notifications inside a mobile app. The tailoring of them is also limited. No creation of rules or choice of multiple notification channels.

Not only does this limit the amount of feedback loops a bank creates it means the banks miss an opportunity to engage with customers. This thing has happened with your product…you should take some action (and hopefully see this advert for new stuff).

Over and above this though is that these notifications and these events that have occurred are fuel for other services both inside and outside the bank. Imagine if your bank had systems that played together nicely in ways you could manage. Imagine if you had the equivalent of If This Then That for your bank(s). The events and notifications are ripe for bringing your bank activities into your digital world rather than keeping them all locked away in an internet banking portal.

 

Activity Streams – (This is kind of the one referred to earlier that got killed off) Basically these are a well known form of viewing data and capturing specific forms of interaction. The Facebook newsfeed is probably the most well known form of activity stream. A flowing river of events that have occurred in your network. Why isn’t your bank relationship represented like that? Today it is split by account, then drill down into a list of transactions. That view is of course important but it shows little of the actual interactions. Why not have an activity stream of all actions across all products and services? For example why not show entries such as;

    • You called today and we have done the following things
    • You left a comment on the first direct lab
    • You have won a prize for being our bestest customer
    • We have replied to your complaint about your prize (See our response)
    • We tried to cold call you but you ignored our call
    • You have been chosen for a fantastic new marketing promotion
    • etc

These would be interspersed with the far more frequent and familiar account transactions but it shows you everything that happens across your relationship with your bank. This representation may also change the way you present transactions as more data could be added such as geolocation, images of cheques, call recordings, 3rd party offers etc

Activity Streams are also a blossoming open standard.  You can post events in the activity stream format and then build a stream of those events across any service. If all banking relationship notifications/events mentioned in section two were formatted into activity streams it would allow those events to be brought together more simply in a single place, easing front end integration but also should you so desire allow you to share them outside your bank. This presentation by one of the contributors to the Activity Streams standard, Chris Messina of Google, explains them brilliantly. What if banks extended the standard from it’s current social network definition? A bank contributing to open standards? Crazy talk…

Again this idea is about linking things together. Bringing events from a multitude of systems into one stream. Also enabling the linkage of bank events into wider world of web services.

 

Open Data & Application Programming Interfaces –  This is my current brain occupier. The one thing I would like banks to embrace the most. I have written about these things many times both inside and outside of the organisation I work for but like Robin S said ‘words are so easy to say’.  I wrote about them here, here and here.  Basically what I want to see is banks surface APIs for core functions. An API for my transactions that I could plug into other services ala Freeagent, An API for payments so a developer could code an app to send money to people ala PayPal X Commerce etc. The very smart James Governor said a while back that he believed API creation and management will be a core skill of the successful enterprises of the future. He is right. We are starting to see a bit of a groundswell around financial services APIs, albeit mainly from new entrants. That will change soon hopefully as the banks wake up to the potential of bridging the gap between the bank network and the web.

Open Data is very similar in that instead of publishing services it is about publishing things that have happened. Banks should have some cracking data sets that could be shared for the benefit of others. Not least the hackers and tinkers and visualisers etc. If the World Bank can do it (and do it well) why can’t some of the other banks of the world do it?

 

Conclusion of sorts – The main themes here are related to some sort of connective tissue of banking and the web. You can tell I am not a TOGAF certified architect with those kinds of descriptions. I am always disappointed when something can’t be connected to something else for what ever crappy reason ‘It was too expensive to build it like that’ ‘IT Security wouldn’t let us’ ‘It was planned for phase 2’ ‘Open standards are a legal minefield so we write better ones’ ‘What the hell are you on about tubby?! Only activity stream you need is to go swimming’ etc

I understand these things are potentially major infrastructural changes and there is also an unhealthy dose of mindset changes required as well. Both these things notoriously complex, challenging and expensive. I have no mind for business models or numbers related to these kinds of things so could not put a price on such a thing.  I suspect they will cost a fortune to build but will they deliver the savings needed to justify them? Will they allow innovation and creativity to flourish in the way my Utopian visions say they will. Who knows? I believe they will but who will believe me without Return On Investment numbers and other dull figures of justification?

My failings (of which there are many) are that I don’t really know how to make things/make things happen (this could be a whole new navel gazing post). I know how to do whiny blog posts and sarcastic presentations and that ain’t working so well for these kinds of ideas (I am being  flippant but I really don’t know how to start these things). Obviously a problem shared is a problem halved so this is my attempt at that.

Be Gone. Maybe it is time to drown the puppy. Arrogantly accept the fact my ideas are clearly far too ahead of their time/not in anyway realistic. Move on. Seek out new ideas in new areas far away from these and rid myself of this (not very heavy) burden. This is the first step towards that…publish away my problems. I will of course be right back to them the moment anyone shows the merest flicker of interest because I suspect the only real way to rid myself of this burden is to see these things, or better solutions, implemented.

June 7, 2012 2 Comments

More Problems With PFM

This post originally appeared on Finextra. It is my first post there and is an attempt to put me and my half baked thoughts and ideas under a bit more scrutiny. I have reposted it here so I have a copy on my own personal blog. 

I love online Personal Financial Management tools. These web based services which allow people to visualize and manage their financial lives in one place, using pretty graphs to show where their money goes, set budgets and alerts, have shown how money should be viewed and interacted with in a richer way than most banks currently provide. The problem with them though is that getting data into them, certainly in the UK, is a real pain in the…

First a bit of background, Personal Financial Management tools need data to exist. There are a number of ways to get this data;

1. Users manually download data from their accounts to a file in a recognized financial data format e.g. Open Financial Exchange (OFX), and then upload to their online tool of choice.

2. The tool scrapes the data from the bank i.e. a script logs on for you and downloads the data, this involves handing over your password and logon and probably invalidates your account’s terms and conditions. If your bank uses a physical device to generate an access code as part of the logon then scraping will not work.

3. You are lucky and live in a country where banks provide some sort of automated feed directly to your PFM from the bank, such as Germany. No need to handover your full logon details to Internet banking just authorization for a data feed. Your postman does not need a key to your house to deliver a letter.

Clearly option 3 is the most convenient from a user point of view and is also much more secure than option 2.

In the UK none of the high street banks currently provide automated feeds from their personal current accounts. Nationwide used to have an OFX server running but I believe it was switched off a few years ago. Because of this lack of automated data feeds the UK PFM market is pretty stagnant. Kublax closed down a few years ago. Wesabe partnered with the Telegraph but to no avail as they also closed their doors soon after. Mint have threatened to launch in the UK many times but I have still not seen a date. There are some still running of course, Love Money, Money Dashboard and Money Toolkit being fine examples of the genre but I have a feeling their usage remains niche due to the issues with getting data into them as highlighted above.

On the business side of things the situation is a little better with automated feeds for HSBC (my employer) working with Xero and Barclays recently announced an automated service with Freeagent. The problem is that these are both bespoke implementations, much like the automated feeds from banks in other countries which vary by instituion. In Germany they are lucky enough to have the FinTS/HBCI system which is an attempt at a standard protocol and delivery mechanism but from my conversations with people in Germany it is a little elderly and not implemented consistently across banks. I think it is pretty safe to state that for the majority of the financial services world no standard exists today for the automatic feeding of any transactional data to the web. This means for the majority of users we are left with the hardly enticing choice of either manual and onerous data uploading or very risky data scraping options. 

Isn’t this a problem for the banks to fix?

Yes it probably is but I don’t believe there is much chance of use seeing all the banks in the world coming together in the next few years to agree a standard form of automated data exchange with web services, to be primarily used by PFMs who they see as competitors. The fact that the banks would benefit from these standards themselves as it means they could pull in competitor data into their own online banking services but I think the number of perceived issues prevent this from becoming reality. Reasons such as fear of the data feed being a security risk that would attract crackers from far and wide, the thought of transaction data being plugged into places that could lead to non-regulated financial advice being or more accurately the handing over of valuable customer data for others to mine. There are many implications to opening up a customer controlled data feed from banks.

As customers demand more from their online financial interfaces the desire to connect their tools of choice with their financial data is increasing. The banks that are smart enough to realize this is an enticing interface for some customers will perhaps offer some feeds but will they get behind an open standard that all banks and web services can use and integrate with? I can’t see it happening anytime soon due to the complexity of the banking industry let alone the perceived threat to competition from new entrants.

What about the Government? There is a chance in the UK that Government proposals may speed up the provision of standard automated feeds in the form of the MiData project, which aims to free customer usage data from various industries and return it to people for them to use as an aid to get better offers for products and services. I am a fan of the MiData project and what it is trying to achieve but Governments like Banks are not renowned for their speed to market.

This is why I think the future lays in the hands of the PFM providers and other financial services startups. They have built their tools on the open standards and open source code that the pioneers of the open web have built. Can they give something back to the web community and build some open standard financial data services? Build services that link to other services, for example could I use Mint and integrate it with FreeAgent?

Today we have a wealth of PFMs that have solutions for getting data in but they are not so great at sharing that data outwards, like the banks, so they are effectively just creating a single layer on top of the banks when I think they should be joining together to create an ecosystem, an ecosystem that the banks would find it increasingly difficult to ignore.

We see more and more new PFM tools enter the market every year and I think we are reaching peak PFM. An ever prettier array of pie charts, graphs and budget calculators offering similar functionality but all bound by the issues of getting data inside them and no real integration between them.

What I would like PFMs and other financial startups to focus on is a wider ecosystem otherwise they are just making new silos; we have more than enough of those in the banking world. Today Yodlee is the major player in this space due to the fact they have integration and data feeds from the largest number of banks. If a standard for data distribution were put in place then no one player would have the upper hand, be that a bank or an aggregator. Is it not in the interest of the wider PFM market to come up with open standards?

Where are the open standards in banking?

There does seem to be a lack of open standards in banking that can be used by the wider world. There are standard formats for financial transaction data, such as OFX mentioned above; the issue is that there are no standards for moving that data between banks and the web. The OFX consortium did provide a client server method for the transfer of data but the world has moved on and newer methods are required. Whatever happened to OFX? Could someone resurrect this?

The web for me is better when we have smaller things loosely coupled and backed up with a lovely dollop of open standards. Where are the open source initiatives around financial APIs?

The big players in the PFM market are readying their app stores and development platforms. Yodlee’s platform announcement was reporteed recently on Finextra, and Mint are also planning to make their APIs (Application Programming Interfaces) public soon. This is a great thing as it will allow for ecosystems to flourish. My only concern is that we are potentially building powerful single players. Will these new APIs be compatible with each other? Will data be in the same format? I hope they will.

Old world or new world?

PFM tools have shown the traditional financial industry how to display information about money on the web. They have given people more insight and control over their money. I think it is in their hands to show how data about money can be part of the wider web and not just locked in silos. I think they can show the way with standardized automated feeds that can fuel a wider ecosystem that will benefit people further in how they interact with money.

The banks can and should play a part in this. They clearly hold the keys to the data and may be reluctant to let go but I think it is in their interest to do so for the benefit of their customers as well as themselves. Making themselves a key part of this new ecosystem not only shows they are willing to open up it also shows they understand the web.

So, who will fix the problem with PFM?

May 8, 2012 Add Comment

Banking in the ‘Glocal’ world

This awkwardly titled post is thusly titled because it is the name of an event that Betony Taylor, my esteemed colleague from the UK media relations team, and I were invited to speak at recently. The event took place in Zurich at the Swiss Stock Exchange and was hosted by Capco and the Swiss Finance Institute.

The venue for the day

The term Glocal (a portmanteux of Global and Local) is not just some awful marketing creation but is actually the basis of some detailed geographic research. The event was looking at the challenges being faced by banks due to the increasingly global nature of their customers through travel, the virtual erasure of borders through the use of the web and the realtime access demands due to the rise of mobile technologies.

The day started with a keynote from Peter Stringham of Young & Rubicam, and as it turned out he was also ex HSBC. His firm had undertaken a large piece of research into trust in industries. As you might expect the traditional retail and service industries had seen a huge decrease in consumer trust and the web based companies were seeing a great increase in trust. Peter’s research pointed to the fact that people just did not believe the messages coming out of those so called old world industries. I would like to see the research to dig into it a bit deeper but I have a feeling that people trust the big web companies more because what they do just works. They keep it simple.

The Occupy movement has been a big wake up for the financial industry. It is not just the normal protestors. Peter showed an image of a child protester to make the point that this will affect generations and how they think about banking. Recovering that trust could take generations. This lack of trust makes people want to disntermediate the system.

Occupy Bacon

An Occupy site just yards from the event

One example given was payments startup Dwolla. They want to do payments without touching the traditional bank network as much as possible. If banks continue to fight and defend against the Internet as people will try and disintermediate the bank network.

Peter also discussed the lack of cross border identity, even between so called global institutions. He mentioned Amex being particularly painful to deal with when he moved from Canada to the US. They explained that he was a customer of Amex Canada. He felt it was strange how they don’t brand like that. He moved to the US and had sold a house for ‘several million dollars’ yet had no credit rating in the US (at this point I of course had very little sympathy for him but I agree there is a problem). These problems are caused by regulations and a lack of really understanding the customer need. The companies that can best unsnarl the regulation will be the ones that win. Consumers don’t care about regulation, they care about being able to do what they need to get done. A great start to a day I was worried would be way over my head. It allayed my fears, albeit briefly.

The first panel focused on reputation management and followed on nicely from Peter’s talk. The general attitude seemed to be that the banks had taken their eye off the ball and the blind pursuit of money had cost them dear. They knew they had to engage at a more human level to regain what they had lost.

The second and third panels were way over my head the second panel was also way over my personal wealth. They looked at the future of cross border private banking and the regulatory environment and its effect on the Eurozone crisis. I will be honest, I did not understand a lot of what was said for about 90 minutes. I have looked back at the presentations and discussions and I am still none the wiser.

What those panels did however do is remind me of the scale, importance and complexity of the financial system. I tend to forget how big banking really is and there is nothing like a session on macro prudential regulation in relation to cross border private banking to make you think your obsession with this piddling little social media stuff might just be the banking equivalent of a child’s toy.

Are the banks stuck between a rock and a...

The panel Betony and I were involved in covered social media and new technologies (quelle surprise) It was preceded by a talk from Dan Marovitz of Buzzimi and once of Deutsche Bank. Entitled, Banking in the Digital Slipstream, it looked at how our actions on the web are ever increasing and as such so is the footprint of what we leave behind. This data is the new gold. Banks sit on an interesting set of this data that none of these web companies have access too yet. Are banks making the best use of it?

The panel discussion that followed covered these topics with a particular focus on transparency. How could the banks deal with the demands of social media and its incessant march against secrets. The consensus seemed that they had to adjust. My own point of view being that no longer can they hide behind complex business models and terms and conditions. I mentioned BankSimple CEO, Josh Reich, and his thought that banks make money by keeping their customers confused. I don’t believe they do that wilfully but I think that banks forget how complex banking is as they live in this bubble where they understand the terminology and the ins and outs. Amusingly no one in the room (except the panel members) had even heard of BankSimple so maybe I live in my own bubble as well.

On the wider topic of social media. I wanted to make clear that it is just a brand name. Just like web 2.0 before it and social business that follows it. It is just the evolving web, the twenty something year old all conquering web. We need to embrace it because it is starting to reach its true potential.  Earlier in the day social media had a few mentions and there was some confusion with it being about popularity and celebrity. Peter Andre was mentioned as doing well in social media but banks will not. Rubbish. The question was asked earlier in the day of how many companies are on twitter. This is the wrong question, how many of your named people are allowed on twitter to represent your brand. It is not about pumping out news on your brand in a broadcast manner it is about being a human being and adding some value.

I would love to see HSBC economists on twitter but there is so much regulation around them that they can’t say anything. They probably can’t even tweet about having a ham sandwich for lunch because that might impact the wheat and pork belly futures markets.

The panel moderator, Nick Levy of Capco, threw in his next question about dumb pipes, as in are the banks destined to become just a layer of infrastructure. I have written about this topic recently and the experience on the panel made me finish that long held post. In short I think yes they will but this is not a bad thing.

The view from the panel...enthralled suit based audience

Throughout the day I kept thinking about the levels of complexity on banking and how the evolving web’s great power had been to simplify processes and business models which has led to the rise of these new trusted companies, while banking and its many regulatory bodies and the governments of the world continue to add layer upon layer of rules and restrictions. I kept thinking about Clay Shirky’s piece on the collapse of complex business models. It is a fairly obvious yet pessimistic correlation to make. Yet the big trusted web companies are now starting to face the same problems, as Google’s recent privacy policy issues show. As the web giants encroach further on the ‘real’ world then rules and regulation are sure to follow. Will the new trusted companies be the ones that can innovate around regulation? Or the ones that unsnarl it and challenge the so called dark matter? Will the digital footprint be increasingly understood by consumers and will they realise the power it wields and demand that they have sight and control over it?

I don’t think the digital pieces of infrastructure required to really replace any meaningful parts of the banking system exist today. Digital identity and the elements of trust, systems that can eradicate the ability to hide money in dodgy offshore havens or through complex derivatives built on top of mythical AAA rated bonds. Transparency, trust and simplicity are the things required for banking in a Glocal world but they are very, very difficult to create. Ultimately a lot of these discussions around new technologies and trends and how you need to behave come down to good old fashioned trust. The day had come full circle.

All the presentations from the day (apart from Peter’s keynote frustratingly) are available here. There are some videos presentations and panels, although thankfully not the one I was on. Thanks to Capco and the SFI for inviting Bee and I to speak. It was a complex thought provoking day that reminded me exactly how big banking is and how it maybe needs to learn how to be small again.

April 18, 2012 Add Comment

Please stop calling them dumb pipes

Lots of people recently seem to be warning about banks becoming dumb pipes. They say banks are destined to just become the wires. The hearts and minds of customers will be won by the masters of the web. The Googles and Amazons and Apples and Paypals of the web 2.0 world. I agree they probably will but is it really a problem?

Those web 2.0 darlings are not going to make themselves into bank. The majority of them are just interested in the transaction data they don’t want the hassle of running a bank. Basel 3, MiFID and other impenetrable forms of regulation might not be too appealing.

Some may say (not me of course as I work for one) Banks have proved they don’t really get this web thing and especially not this web 2.0 thing with its rounded corners and nice fonts and helpful intuitive interfaces. Why not let the experts have a go at that bit while banks stick to what they are good at.

The banks operate a huge complex global network that moves trillions of dollars per day, usually without much issue. Complex fraud and anti-tax evasion systems operate silently. Audit requirements, data protection standards and a myriad of regulations make this system the powerful beast it is and also a potentially irreplaceable one.

No one in Silicon Valley or any other entrepreneur saturated dreamland is going to want to recreate the whole bank system (I have visions of mad stock sale billionaires from Facebook sitting in their volcano housed lairs thinking ‘we should do that’). That bank system may be a bit long in the tooth and may need some updates here and there but could we give it a chance to catch up by laying down some of these so called dumb pipes and bringing it closer to that other huge complex global network called the Internet? If we give a few more people access to the system in a web friendly way will it be of benefit to all? Will people realise the power of this network and what it allows us to do today?

Liz Lumley wrote a great post about SXSWi and how all the cool companies trying to disrupt banking are massively reliant on that network. ‘What struck me was the juxtaposition of the bravado coupled with the fairly shocking display of ignorance on how international banking and payments happen.’  These pipes are never going to be simple or dumb.

That being said I am interested in the most simple of these dumb pipes. I want an automated data feed from a current account. Every time a new transaction occurs I want a data feed I can subscribe to, just like RSS, to update. That feels very simple and you could say dumb but to make that happen is going to take some damn smart coding and some bravery.

The big problem is authentication. How do I prove I am who I say am? How do I prove that I am allowed to subscribe to that data feed? How does that authentication model satisfy banks security and fraud departments? How does it satisfy the regulators?  What would happen if someone had access to all the data behind that API? What if the Daily Mail had access?

The most simple implementation of the so called dumb pipe was planted in my head by Dave Birch. He posted the following tweet.

Setup a private twitter account. Plug it into your bank account (this dumb pipe of course has OAuth/XAuth like qualities). Follow it to catch your transactions as they happen. Now a bank would never build this. No revenue at all. It only presents risk but a customer has asked for it (albeit a quite forward thinking one who would be a guinea pig to embed payments chip into his body) but a customer need is a customer need and we know they are always right.

A few examples i have seen during my time at HSBC where customers are trying to circumvent this lack of a subscription data feed. Designer Aral Balkan was none too happy that he could only manually access transaction data from two months in the past. So he built a tool (in under 4 days) to scrape the data and save it in a format for him to upload to Freeagent. Another person, a smart gentleman going by the name Jay Fresh, went a step further. He reverse engineered online banking to produce a command line interface. I spoke with him and asked him why, his reply was that he had simply wanted to build his own iPhone app. I can understand his frustrations. Should customers have to work so hard to do this? Should they have to risk their own logon data and potentially break terms and conditions to try and get to the data? Banks spend pots of cash each year trying to figure out what customers want, why not give them the tools to build what they want. A so called dumb pipe would be a very powerful tool in the right hands.

Mr Bank 2.0 (soon to be 2.1 and available in all good book stores), Brett King, also wrote a great post on this topic (and has been talking about it for years) arguing that if the banks do become merely an infrastructure layer then they will miss out on the value built on top of it and that we may need fewer banks/infrastructure providers. I agree they might and there could be less banks but do we need that infrastructure layer to be created to allow new value chains (ugh) and innovations to truly flourish? Where would we be if we still had a fragmented electricity system? Or you could only call someone on the same telephone network as you? We need to create these commodotised infrastructural layers and allow them to weave into the wider world (web?). The innovation S-Curves of many technologies have shown this pattern. Banks may resist as the wireless telcos are doing now, except for the smart ones such as Telefonica, but I believe there is an inevitability and the banks that embrace this will be the ones that exist…but I digress.

So what would a banks dumb pipe look like? What are the technologies required to keep this mother of all honey pots safe and secure so it does not spring a sticky leak. What would be needed to build the simple sounding dumb pipe detailed above? Yes there is inherent risk on freeing customer transaction data but I think the potential benefits outweigh the risks (I may be alone on this). We are starting to see some things in the French banking market that might answer these questions SDK’s have recently been released by Crédit Agricole and this week has also seen the launch of an API by Banque AXA. The future looks French.

I look forward to the arrival of the dumb pipe. It will bring together the banking system and the web. I have high hopes for this dumb pipe. People need to realise that the pipe is not so dumb.

March 21, 2012 14 Comments

BarCampBank London 5

The 6th of February was the date for the 5th BarCampBank London. Held at the same loation as last years, Nesta, it brought together around a hundred or so financial service innovation types to discuss the hot topics of the moment. Last year there had been a focus on alternative currencies and economies this year they were largely absent from the sessions (the ones I attended anyway). NFC was also another big topic last year but this year it felt like the disillusionment was setting in.

I was kindly asked by conference organiser Dave Birch to help group the themes from the post it note avalanche at the start of the BarCamp. It allowed me to be biased and shape a session on one of my current pet topics, APIs/Open Data, although to be honest I did not have to be that biased as it was a topic a lot of other people wanted to discuss.

 

‘What does a bank API look like?’ was the question used to frame the discussion. I was asked to lead the talk which was a tad daunting with some of the experts in the room thankfully I don’t think I made too much of an idiot of myself. The first job was to explain what an API was to the mixed knowledge group. An API is an Application Programming Interface and as the name implies it allows programs and services to connect and interact with it to control the business process it sits on top of. My primary focus is around creating APIs to deliver access to a customer’s transaction data so if they so desire they could use a third party PFM, like Mint.

But what is the business benefit of an API? Why would a bank open up its data to 3rd parties when they can keep all that good stuff for themselves? Well the discussion coverd this quite a bit and the conclusion was that the biggest benefit is around internal development. The API should be used to build your own tools. If banks had APIs then building tablet, mobile or Internet Fridge banking apps would be a piece of cake.

Obviously the immediate concern when anyone mentions an API plugged into the financial transaction data of customers is what about the hackers?! Yes an API to financial data would be quite the honey pot but surely these issues can be overcome. If PayPal (the developer arm is now known as  X Commerce) can provide API access to some of its services then why can’t other banks?

In Germany they have had APIs of a sort for quite some time in the form of the FinTS set of services. We were lucky enough to have several people from Germany in the group and they said that while FinTS was useful the way it had been implemented by the banks varied wildly between institutions. Open standards are desperately needed.

We were lucky enough to be joined by Simon Redfern from the Open Bank Project. An organisation looking to build a layer for the banks to plug into and then provide some standard data feeds in JSON with some RESTful APIs to hook into. Unsurprisingly they have not signed up any banks to take this on just yet but on paper this looks like just the kind of thing needed.

We discussed what the role of Swift was in all this. The Society for Worldwide Interbank Financial Telecommunication is a global messaging network which deals with payment instructions. They would not really have access to the customer level data I am interested in but it would certainly be interesting to plug an API into this world.

Another angle was the Government. In the UK we have the MiData project kicking off at the moment. With the vision of handing customer data back to the customers. Some banks are signed up to this but as yet the detail around how data will be provided is not that well detailed and I think data extracts maybe preferred over API type access.

This is a really interesting topic that I think will be a major focus for the banking industry over the next 18-24 months.

 

Second session I attended was entitled ‘Does social media change everything or nothing in financial services’ I am not sure about the title of this thing (maybe replace social media with ‘ever evolving web’) but I like the sentiment.

I think the obvious thoughts are the likes of Google and Facebook will sweep aside the banking industry as we know it. I really don’t agree with that. Those companies have no interest in being banks. They might want some of that sweet, sweet financial data to better tune their marketing efforts but they don’t want the hassle of Basel 3 compliance etc.

That being said you cannot ignore the effect the web continues to have on society and banking is certainly not exempt from that. The two networks need to get closer and I believe the two can coexist. The banking one may look a bit long in the tooth comparatively but it is pretty good a transferring trillions of dollars per day without much issue (the small matter of global economics withstanding).

 

My third choice of the day was ‘Can you imagine a world with no POS terminals or plastic payment cards’. Like the previous session the big assumption is that mobile devices will change the way we pay to such an extent these mechanisms of trade will be consigned to the dustbin. Square might be the FS darling in the US at the moment but wide scale merchant usage at a corporate level will not be possible with such a system (the mag stripe alone makes it unusable outside the US). The discussion focussed around what the big players in this market actually do and why displacing them will be very hard.

The key element being the payment schemes and the functionality contained within them e.g. chargebacks, where customers of Visa could demand a refund from them if the goods the customer purchased from a third party were substandard. Are the new players going to be able to build these huge complex processes? The feeling from some part of the group was that this was maybe a bridge too far. This means the big players will probably stay as the big players…also Visa have a pretty big stake in Square anyway.

 

A slightly bizarre end to the day in the form of something that I had found difficult in the last session i.e. imagining a future without something so fundamental to pretty much everything we do today ‘What would be the plot of a movie about the future of the financial system?’.

Now obviously the premise was quickly established that the financial system as we knew it had completely failed (crippling virus or AI reached such a level of sentience that the HFT algorithms ran riot and heavily funded biotech which lead to the creation of an army of financially trading cyborgs that also had a physical presence so they could take over the world or a more plausible continuation of the real world events going on now). Either way the way things work today cease to be. Trying to think through what would happen if you no longer had any access to money. No way to buy. No reason to work. Hording would begin. Looting would break out. Society would surely break down. This would be a pretty depressing dystopian future so we had to try and inject some happy/hippy transitions.

Obviously barter systems would flourish (They have seen a resurgence in Greece recently) and the world would find new means of trade and currency and the things would be right again (as the rebel survivors successfully defeat the evil cyborgs) and no one would ever be short sighted or greedy again. There was a slight twist in the end in the form of a very clichéd cut to an underground bunker with a lone evil banking cyborg that had escaped the cull. Can’t see it getting made any time soon with a plot like that, I also suspect securing funding would be very difficult.

 

I personally got more out of this year’s event over last years. Not sure if that was to do with the more relevant/interesting topics or just feeling more comfortable with the format/audience/my willingness to shoot my mouth off. There was still a lack of (UK) bankers at the event which was a bit of a shame…that being said who wants a load of bankers at an innovation event anyway?

Nice work once again by Mr Birch and his associated organisers. Finovate Europe which was held the day after has meant some of Europe’s smartest in the industry come together in London for a few days. Organising events at either side of it is a no brainer. Same again next year please maybe with a few more events added on to make a week of it.

February 14, 2012 4 Comments

How do financial services fit into the robot readable world?

As our world is increasingly layered with QR Codes, RFID tags and all manner of sensors designed to be read, interacted with and updated by other machines I wondered what role banks and the equipment they have deployed in society play in all this. This post was inspired by Matt Jones’ excellent post which brought together his, and others, work on The Robot Readable World. The other piece that ties into this is the 8,000 word delight that is Street as Platform by Dan Hill. If you have not already read these pieces then I urge you to stop reading this drivel and go and read those first. Go down the rabbit hole and then come back to this in a few hours or days when you have emerged and if you so desire.

The two articles I mentioned are important pieces in defining how this robot readable world will look, feel & operate. Matt quotes himself from a previous talk to describe how this robot readable world will come into being.

“What if, instead of designing computers and robots that relate to what we can see, we meet them half-way – covering our environment with markers, codes and RFIDs, making a robot-readable world”

The first line of street as a platform sets the scene perfectly

‘The way the street feels may soon be defined by what cannot be seen with the naked eye’

Dan Hill paints a, in his own words banal, picture of a busy cross roads, the surrounding environment and how the silent systematic interactions monitor and affect the daily lives of the streets users. One of the reasons for this banality (although I have to argue it is far from banal) is that it features technology available and in use at the time it was written, 2008. Three years later and these technologies have still not permeated our streets to any great degree but it feels like we are on the cusp of that changing. As we edge ever closer to blanket wifi coverage, universal smartphone ownership, ever cheaper sensors and tags, this ubiquitous sensor laden network feels very close. It has to be asked how will this affect the design of our urban landscape to become both robot and human friendly.

‘What’s evolving to become ‘attractive’ and meaningful to both robot and human eyes?‘

One thing that did occur to me while reading these pieces was that words like bank and pay feature only a handful of times. I have a (biased) feeling the financial interactions and related data will play a huge part in this evolution of our urban environment. Whether that is for the better or worse will be interesting to see.

From a banking point of view it is difficult to see past the fact that the future of financial interaction will be heavily linked to mobile devices. The physical representations of money that we know today, the plastic debit/credit card, the paper cheque book, the steel and plastic ATM will all be replaced eventually by mobile connected devices of varying forms. The physical will be replaced by the digital but will that revolution happen before the rise of the robots?  Will the addition of robot readable elements to those physical tools of finance be rendered pointless? Or will the physical elements exist long enough to be worth changing (I mean we can’t get rid of cheques by 2018 in the UK so it is safe to assume they will be around for some time yet). Also is the mobile the ultimate robot? These are my initial thoughts on this and they are primarily concerned with the bread and butter personal finance elements although there are some dalliances into the world of commercial business and investment banking.

So here is my banal picture of a similar section of a city to the one mentioned by Dan in the not too distant future.

A teenage girl is shopping with her friends. She tries on an outfit and takes a photo. The phone calculates the value by reading the RFID tags in the garments. She does not have enough money in her prepaid mobile wallet. She sends a photo to her Dad with her best sad puppy dog look and asks for a bit of extra cash. He sends the money and because he is a premium customer at his bank he can send a 25% discount to his daughter for the next time she shops there. When she purchases the item because her wallet is linked to an adult the store knows her father. They can see is a well known author with a healthy audience on line so they offer to discount the outfit by 10% if she tweets about it on purchase. In the vain hope of a retweet from her father. She does tweet about it and uploads it to WIWT.

A young couple push a pram along the street. They have recently set up a saving goal for a a family car. This has triggered an intention to buy and they have expressed a preference of a 5 door smallish MPV, 2 years old max. A Renault Scenic matching the description cruises by. The car has been registered for sale and emits a signal captured by the fathers phone. An entry is quietly logged. Insurance costs are calculated. A loan is validated. Vehicle history is fully checked. The car passes with flying colours and leaves the couple with a simple decision to go and see the car. They do and they buy with the help of the pre-approved loan and a tap of two phones. The digital display tax disc is automatically updated also.

A professional photographer is leading a photo walk and is giving paid lessons to a couple of pupils. The payment was in the form of skills exchange and a 3 hour photo lesson to a plumber and tiler means he is getting his bathroom work done pretty cheaply. As he snaps photos they are uploaded to Flickr and licensed to Getty Images. Someone purchases an image while he is on the walk and his money is immediately paid. A reassuring beep in his pocket notifies him of this as he captures another shot of the street. The value of his portfolio increases this allows his time exchange rate to increase as well.

Four friends are having a spot of lunch. The bill arrives and they split the payment using three forms of payment, mobile, credit card and payment chip. The waiter has chosen to be tipped in a virtual currency. It might look something like this. These series of transactions fire off all manner or data streams. As the bill has been paid it means the table is about to become free and the online booking system is updated.

One of the bill payers has chosen to round up all transactions. As the bill is paid she is notified on her phone and given the option to add it to her savings or to donate it to her preferred local cause, Sheffield Childrens Hospital.  She chooses to donate to the hospital and her tax calculations are updated accordingly. She has also triggered an invite to the hospital ball at Xmas. The giant donations display board on the front of the hospital captures the amount and updates its total in an eye catching animation. A new dialysis machine is automatically ordered.

A runner glides by pedestrians. His route is being tracked by Nike+. His health status is being tracked also. His VO2 Max levels are good. The run is making up for last nights beer and curry which were captured via his bio plaster. The run and health data are shared with his health insurance provider and his premiums are reduced. A driver swerves in front of the runner and parks badly taking up two spaces. His car payment device is charged twice and he receives a notification that his inconsiderate driving and parking could result in a fine in the future. His car insurance provider is also notified. His premiums won’t be reduced.

Above the parking space a couple are browsing a gallery. The artist exhibiting has works for sale and is seeking donations for his kickstarter fund. Gaze tracking cameras are fitted above all the art works. As the couple stop at a piece it calculates the time they spent admiring the work, their age and their desire levels for the piece. An ego dashboard viewed by the artist updates to reflect another visitor and admirer.  The couple move to another piece. The interactive node pulses and begs them to tap their phone.  They interact with the work using NFC. An option to donate is embedded with the information, as is an option to buy. They are torn between which piece to buy. They choose to buy the first one they saw. Their desire for the other piece was recorded and a savings goal suggestion has been passed to their account. As they leave the gallery the framing store across the road has digital signage that shows the work they just bought in a selection of their frames. The value of the piece is added to his art collection. It’s value on the traded arts index is calculated.

A small group of students fresh from a (half) day of lectures head into a bar, the fourth bar they have visited today. They order drinks and as one student goes to pay with his phone it begins to vibrate as the amount it needs to pay breaks his weekly expenditure budget for alcohol. He begins to sober up a little as he realises this budget was agreed with his father after last terms financial issues. His friend offers to pay instead, saving an awkward notification being sent to his father.

One of their drinking companions places a few bets on the days sporting events. His penchant for risky long shots and complex triples and accumulators helps to build a detailed risk profile with his betting company of choice. He has chosen to share that risk profile with his investment management software to model his micro investments based on that same risk profile. His investment record is slightly better than his betting history.

A new clothing store has opened. A man searches for a birthday gift for his ethically minded friend. He scans the store and checks its trading policies and is able to interrogate full iXBRL statements showing where every penny of their organisation goes. The phone classes the company as green and this gives him the green light to buy. As he browses the store his phone is scanned to reveal his identity. His credit rating is excellent, as is his Peer Index score. The dynamic price tags alter accordingly as he views various items.  He purchases a nice dress and the digital gift receipt contains the sourcing details of all materials, distance they have traveled and details of the factory where the item was made. Somewhere in Africa another version of the dress is shipped to someone even more deserving because of this purchase.

A man needs cash to pay his builder. He has scanned for the nearest ATM with available cash and is walking towards it. He joins the queue. The ATM senses the queue size and limits its features based on this. It will only dispense cash, no statements or receipts are available temporarily. Finally the man gets to the front of the queue he taps his phone and his usual amount is presented. He clicks one button and leaves. The cash is printed with unique barcodes that are linked to the person withdrawing the cash. The cash is very difficult for the builder to actually spend anonymously as every note is tracked in now and ID is required to complete cash transactions so this simple tax evasion has been eradicated.

Down a side street two men shake on a deal. One of the men makes a signal and a small boy deposits something in a crack in a wall across the street. The other man heads over and takes the parcel. He walks a short distance then passes his phone by the portable HiSecurityBitCoin Deposit Port and anonymously pays the drug dealer.

A young entrepreneur passes a homeless person. His begging card features a URL. The link is browsed by the young man and it takes him to a Kiva investment page. He can make a microloan to the man for a share in his future earnings from his amusing begging card meme business. He contributes £30. He heads towards his bank branch. He enters and his phone is scanned as is his palm vein pattern as he places his hand on the door. The video booth door opens and he steps inside. His information has connected him to an appropriate advisor based on his relationship with the organisation. They discuss an upgrade to his personal trading robot.

And there ends the banality…well not quite.

What do we mean by robots? For me the use of the term robot conjures up images of the classic 6ft tall metal creatures from countless classic sci-fi films and books. I think in this context the robots refers to any machine which has sensors built in and can capture something about the world it inhabits. This could be a simple pressure pad driven traffic light, the sensor laden gadget we carry everywhere, the smart phone, and hopefully some moving & talking versions of what we actually know as a robot.  Connectivity to the web will of course be key. The other element of this is data. As linked data stores grow and evolve so will the power of the robots. The speed at which they can interrogate relevant and related data sources will be the key factor in how powerful the robots become. The real key is the capture of events. Sensors of varying size, scale and capability. Picking up information about the simple things like transactions, location and movement. It is how these things are pieced together and fed into algorithms to signify an event. I gazed at an item in a store for 3 seconds. My heart beat rose slightly. I had viewed a similar item online last week. A clear intent to purchase? or save? or invest?

How might this existing financial service layer be altered to help the robots see it? The most obvious part of the cities and towns that are the automated mechanical face of banks are the ATMs. These 60s creations seem ripe for a higher level of awareness about their status, the identity of their users and the ability to talk with other devices. As we move to tapping the NFC equipped mobile against the ATM to withdraw cash (assuming mobile payments have not become so much easier than actually using cash) then it becomes easier for the ATM to sense who is around the machine. Could it calculate queuing levels and notify outwards accordingly. Feed to your car navigation to say the ATM you are heading for is busy and is currently holding only 5% of it’s cash capacity. The car suggests an alternative which is reporting as being queue free. If cash use does become increasingly rare then what could these 24 hour windows to the bank network become? Thankfully someone else has thought about that.

Cash. What of money itself? Should the physical tokens of exchange be readable by the robots? The Dutch Mint recently launched a series of coins featuring QR Codes, A few entries to the 2009 dollar redesign competition featured bar codes. If coins and notes could be scanned as they were used by tills, vending machines etc could we paint a picture of the movement of cash? See how the physical cash moves about inside a community? And around the wider world? This has been attempted with today’s money for the Where’s George project. This tracking data actually showed how diseases spread.

Cheques. Today the mobile is capable of seeing and reading a cheque. Capturing the details and sending them through the air to be processed as if they were captured at the branch and shipped to the clearing centres. My first job in banking was the implementation of cheque imaging at several of these clearing centres around the UK.

The clearing centres back then were large industrial units housing 40 foot long sorting machines with names like NDP1825s (Network Document Processors, the number representing the theoretical rate of throughput of cheques per minute), capable of taking several images of cheques while also reading the MICR ink to capture the institution and account details. Huge mechanical and noisy beasts. Sucking in and firing out vouchers from a hopper to numbered pockets further down the length of the machine. A small stack of storage servers allowed these photos to be stored and hundreds of workstations allowed captured images to be processed by humans reading the amounts and text scrawled on cheques then inputting the values. These inputs were all ultimately feeding files on a data centre housed bank strength mainframe. This was my first real interaction with the robots of banking *dewy eyed nostalgia ends here*

Later projects added new hardware and software to read the human entered amounts on the paper cheques and thus reduce human processing requirements further. Now we have the capability to take a photo and the cheque is paid (gross oversimplification).

Snap a cheque

Potential changes to these banking products and services feel doable but I am not sure they ever will be due to boring things like business cases. Also the fact that, as I mentioned before, the mobile will replace so many elements of the relationship we have with cash and cheques. This will be made possible by the fact mobiles will become debit/credit cards with P2P payment technology as well as being able to act as point of sale terminals. This change to how the mobile device is viewed and used going forwards is clearly massive. With that in mind in here a few financial interactions that I see being affected by this robot view of the world sooner rather than later.

The debit/credit card of the future will no longer be a one way communication device. It will still be read by the same terminals and ATMs but it will become a two way communication device. Today’s contactless cards employ basic connectivity using RFID and this could allow it to react to the signals it receives. Could the card glow red or green as you bring it close to a payment terminal? The changes required to the cards themselves make this change cool but prohibitive.

With mobiles this is much simpler. It will have location technology built in so knows when it is about to purchase. Feedback from the screen or from other haptic interfaces could discreetly let you know you can’t afford it. NFC will allow the transfer of payment, loyalty interactions, digital receipts and the like in a single touch. Extra data from your handheld robot can be appended to the transaction such as geographic location or when bio sensors emerge maybe your tiredness levels (I was not thinking straight when I bought these skinny jeans).

Mortgages.  The buying and selling of a house is one of the most complex financial interaction most of us will undertake in our lives. How could the robots make that easier? How do the robots see houses? As you drive round your desired area to move to looking for houses for sale. Can you scan houses? GPS mixed with recognised 3D map of the house retrieved from the land registry data store. See how much they are on sale for, historical sale prices, see the value of other houses in the street, see how much you could bid up to based on your mortgage agreement in principal, past survey results and have any of the neighbours been featured in the Sheffield Star court report. Commonwealth Bank of Australia produced a slick video last year showing their vision of how robots might see houses (about 1 minute in) Commonwealth Bank – Vision for 2013.

Humans > Androids I think like so many other industries the real changes will occur as the human move closer to the network and they become robot readable. The obvious robot readable element of humans is biometrics. Lauded for years they have not made any meaningful advances in the financial world. I use a finger print scanner to gain access to my son’s nursery. Nothing like this exists at my bank. Clearly it seems certain mobile phone companies think biometrics might make a come back. The image below shows Apples recent patent submission for biometric reader built in as you swipe to unlock your phone (620 on the diagram).  They have also registered patents for facial recognition and even heartbeat signatures.

iPhone Swipe My Finger

I have spoken lightheartedly/with borderline vulgarity about the ability for NFC enabled bio sensors to be attached to humans. This is an interesting step for the world of finance. Imagine if you agreed to have those sensors hooked to life insurance policies. Allowing you to stick to your word that you do only drink 20 units a week. Who would ever agree? The organisation would have such granular data they would catch you out for something but the agreement would need to be transparent enough to deal with this. The data could also act as ultimate feedback mechanism fodder ‘Loyal consumer. You seem to be travelling 100 miles an hour, have 0.65 milligrams of alcohol in your blood and have been awake for 17 hours. If you do not take immediate action your premium will adjusted accordingly’. Of course the algorithm for calculating your insurance risk would then have to be as transparent as your bodily data. Financial companies are not so well known for sharing equally.

Some people think bio sensors will never catch on but as we spend more and more time with a phone seemingly grafted to our hand the closer technology becomes to being part of our body then the more accessible by robots we become.

Will robots and sensors not actually see us in some sort of pixellated/kinect captured/glitched/3D represenation but in fact by scanning the robotic element we carry, the biometric information we offer and therefore see us as a series of 1s and 0s fed directly from our phone. Giving direct access to the currency/celebrity/societal value of that person without the need for anonymous scanning. Depressing thought.

Sharing data about you with the robots. What about financial elements of you that you may wish to share with the robots? Walk into a clothing emporium and the price tags alter based on your credit rating/premium customer level/stupid social media scores fed from your connected device. Suggestions for matching items are highlighted via glowing shelf tags fed by the clothing purchase data over the last 3 months.

It can’t all be about mobile and NFC because by it’s nature, the clue is in the name Near Field Communication, needs to be near to create a link. RFID broadcast may be more relevant to some parts of this future world unless the physical tap is required to switch it on when you walk into a shop or a railway station. If I choose to broadcast personal information what would that be? My mobile device says I am Aden, age 35-44, Aries. I will tell you this much about me. If you want more then a physical interaction is required for the service/robot to get access to it.

Privacy & Fears. All this automatic scanning and interactions happening on your behalf without you knowing are a privacy nightmare set in a minefield. What on earth the interface for controlling this would look like is beyond me. Personal control will be very important if this is to ever get close to taking off. The other element is identity. Sharing an identity of whatever sort with something seemingly inhuman will not only require a robust framework the likes of which we are no where near it will also take a great deal of trust.

Will we see a day where people are prevented from entering stores unless they are connected to the network. No connection means you can’t see the persons credit available. If you can’t afford to buy, why should you clutter up the store. This could in theory eradicate shop lifting. There might be one or two issues of ethics/morality but let’s not dwell on that too much as this post is already far too long.

Of course no discussion about the robot readable world of finance is complete without mention of security risks. Future Daily Mail headlines will probably scream things  ‘Waves of unstoppable Eastern European Flying Robots steal cash from the sky’ as the more readable and scannable financial information becomes the riskier things become. We will probably see a healthy trade in RFID/Robot unreadable wallets. These are of course valid concerns and security with financial segvices is always paramount but there needs to be a balance to allow innovation to flourish. It is also important that whenever you are scanned or creating data that this is accessible to you. You can see how the web of data is affected by your actions and the actions that have been taken because of that. Relaying it back might be more scary than doing it privately but doing it sneakily is wrong on a different level. The security risks are clearly huge but someone else can write 4,000 words on those.

In conclusion, my thoughts on this subject feel very much robot world 1.0. I feel constrained by the desire to robotise the physical financial interactions and services of the present while in the knowledge that the evolution of mobile and its affect on the physical manifestations of finance will in all probability reduce them significantly if not kill them completely. The evolution of the web today, often categorised as social and mobile, will change our concepts of currency and banks to such a degree that it is impossible (for someone of limited intelligence like me) to really see where this is heading.

The impact of someone carrying a device with them capable of both giving and receiving money changes things so greatly on its own. How this plays out over the next 5 years will shape the financial landscape for decades. The ubiquity of NFC/RFID in mobile handsets should be with us by around 2015 and that will mark a real turning point in the physical to digital connectivity of the planet and will mean the robots will truly be able to get involved.

The other thing I can’t predict is the closeness of that mobile device to humans. If those connections become tighter than merely having it to hand at all times but actual physical links between the network, numerate data sources and living tissue then anything stated above will be just a fraction of what becomes possible.

I have shied away from the High Frequency Trading robots that may have a an even bigger impact on the financial systems of the world than they have already. This is mainly due to my lack of understanding and a desire to finish the post sometime this year as it is an even deeper rabbit hole.

I think what ever happens the robots will want to see the financial world but it depends how many financial institutions decide they want the robots to see it. I hope that it will be a great number of institutions as this will allow us to enter a future that actually feels like he future we were promised. These are my initial thoughts on how the world of finance fits into the robot readable world.

October 25, 2011 4 Comments

SIBOS / Innotribe

I have been in Toronto since Saturday night and I will be here until Friday all for a little event called SIBOS. For those outside the banking (or maybe more accurately payments) industry it is quite simply the biggest banking conference in the world. This years sprawling venue is the Metro Toronto Convention Centre in Toronto. It is huge. The south side of the centre is mostly underground so there are no windows. As if to hide the goings on from the world outside. The bottom floor is made up of glossy trade stands from most of the major banks of the world and quite a few tech vendors as well. There are dozens of conference rooms and meeting spaces as well as the massive plenary room which must seat a few thousand. It is a dizzying scale and I am lead to believe there are over 7000 attendees (apparently there were 8000 in Amsterdam last year).

The venue is so large that it is split by the railway tracks to Union Station. That split could also be a lazy metaphor for the conference. I am not here for the giant tradeshow / business festival of Sibos but the more intimate and future thinking track known as Innotribe.

Innotribe has brought together some of the worlds greatest thinkers and doers on some topics that I, and the team I work with, are very interested in. After two days we have covered in some depth: How social and the associated technologies are changing business, digital identity and it’s many facets and BIG DATA looking at how the cost of CPU and storage means we can capture and aggregate more than ever, can we see new patterns or business models in this ocean of 0’s and 1’s.

The format of the first two days has been speakers imparting their knowledge and insights, followed by deep dive sessions on the topics where it gets a bit more interactive and hands on through a series of exercises. The line up of speakers has been excellent. From players in the new world of banking and finance like Howard Lindzon the CEO of StockTwits to geek gods such as Doc Searles one of the authors of The Cluetrain Manifesto and the driving force behind, the much cooler than it sounds,  Vendor Relationship Management (VRM). The people in the Innotribe space are a real who’s who of the social / tech / banking 2.0 world.

The only slight downside for me are that the deep dive sessions following the talks have been a bit hit and miss. The Big Data session being a great example. Jeff Jonas ran an entertaining session on the group building jigsaw puzzles and what it shows about putting the pieces of data together. This was shortly followed by a pretty dull / vague session trying to represent swift economic growth data in some sort of context. Clearly I like jigsaw puzzles more than numbers and spreadsheets (roll on Playful 2011).

I would also like to see a bit more Q&A with the speakers and though I am not a massive fan of panel debates I am actually missing them at this event because I am keen to see some of these great minds go at it, so to speak. That being said the first two days have been fantastic and have been a bit of a whirlwind. I am trying to get my head around some of the more out there stuff eg Swift Digital Asset grid, more on that in another post, and meeting many, many interesting and frighteningly smart people all mixed in with some good old fashioned jet lag (I type this on my iPad at 4am).

On the first day I switched from the opening Innotribe sessions to the other side of the conference to see a plenary session for the SIBOS track. It was by the CEO of Gartner, Peter Sondegaard, and it was very jarring to see some of the things I had worked on over the last few years ‘Gartnerified’ and presented as confusing graph and visualisations of many arrows and sections that tried to point towards the future of money. It highlighted to me the difficulty in transitioning the thinking of the likes of Innotribe to the world of normal banking and I do wonder if by the time these things are Gartnerified it will be too late for the banks. Time will tell. Now this post is out of my head I hope I can get the hell back to sleep.

September 21, 2011 Add Comment

If This Then That

The very lovely service If This Then That came out of it’s long beta cycle recently. The service is beautiful and simple in both its design and more importantly its  implementation. As the name suggests it allows you to create actions that occur if something else happens. These are the steps involved.

Click me.

You can create tasks based on triggers from a number of channels. The channels are the usual suspects of the social web

Channels have a selection of pre baked in tasks. Choose one and continue.

Then repeat the cycle for the ‘that’ element of your task.

You then have some more advanced options for the output. Here I am capturing a Twitter Favourite which contains a link to pass the link into Instapaper for me to read later.

Once you have created your tasks you can share them as recipes for others to use.

I love the simplicity and power of this site and what really got me thinking is the lack of this simple rules based operation in the world of banking. Some basic rules might exist for banks around simple notifications such as If my account balance drops below a certain level then notify me. This notification will no doubt be limited to a very small number of channels.

What if banks implemented not only the wealth of triggers shown in ifttt but the linkage to the many services that you already use.  Of course this would need some rather innovative APIs for the banking world with the ability to link outside the organisation and interact with the social web. I can but dream.

September 13, 2011 1 Comment

What are the social objects of banking?

I am on a train, I am not a fan of trains. Many people think the same. This is a very basic example of a social object. A simple yet powerful concept that can bring two or more people together to share and discuss their thoughts and experiences.  To make connections with people we try and put some context around the person to enable the conversation to start and hopefully flow  ‘Where do you live? I know someone who lives there. What football team do you support? I prefer the other team in that city.’ These are social objects and they bring people together. The concept of the social object was brought to my attention a while ago by Hugh Macleod who produces social objects in the form of his artwork. He also writes about them and I urge you to check out his work.

You will no doubt have seen his work in countless social media presentations ‘If you talked to people the way advertising talks to them they would punch you in the face’ and his most famous piece is probably Blue Monster where he challenged Microsoft to ‘change the world or go home’. His work is designed to be used in presentations and Hugh encourages people to print out his work and display them in their work space. He has a name for these things ‘Cube Grenades‘ little messages designed to say something about your attitude to work, life what ever to maybe act as a conversation starter (or killer). If you are richer than I then you can even order a nice print of them or if you are really rich/less of skinflint than me you could even commission your own work from Hugh.  I myself have had a few (unpaid printouts) displayed on my desk to give me a smile/little bit of reassurance on those dark days.  These social objects got me thinking about what the social objects of banking are?

Banking as it stands is a fairly private and solitary experience. Your financial situation is discussed with your nearest and dearest and maybe some experts on financial issues e.g. branch staff, an IFA etc.  Data about your financial life seems to be as private for some as your health records. Should this be the case? For some it will always be the case for others I am not so sure. We may discuss at a high level some of our financial lives down at the pub or over dinner. We may get given a great stock tip from one of our savvy friends or an in the know cab driver. At first glance there may not be much else.

Without a doubt the biggest social object in the world of banking at the moment is banker bashing. The financial crisis and its ongoing ramifications have made banks and bankers figures of hate. From constant coverage in the media of the bonuses handed out to ‘Those bloody bankers’ to the protests against them by groups like UK Uncut. The world can come together and discuss how and why they hate banks very easily.  While a lot of the action around the financial crisis is justified and needed to ensure changes and cuts do not go too far it needs to be made clear that not every banker is the same! Certainly when I tell people what my bonus was this year they are somewhat confused when they realise it is barely enough to take my family on holiday and that I am not ordering a new Lamborghini and buying a holiday home in the south of France. Another concept of Hugh’s is the social marker a way of adding context to certain social objects. It could be thought of as a statement that defines in its purest terms what the object is about. The financial crisis has a very powerful social a social marker which frames the conversation by realting it very closely to a person. That person is Sir Fred Goodwin. Fred the Shred. He is the ultimate social marker in this regard but do some social markers add too much context to an argument or frame it in a closed way e.g. tar us poor bankers with the same brush?

The other classic social object for banking is charges. People love charges. Love them. OK maybe not. The sharing of charges made by banks is again something that is needed to ensure what the banks do remains fair. Some charges are justified some are not and are onerous. Sharing publicly more about these charges can help people see which organisations charge fairly and which do not. This maybe an area that banks are not keen to get involved with but the world is a place designed for sharing so they need to get used to it and behave accordingly. The bank that most openly shares their charges may well be seen as the most thoughtful and caring bank.

The sharing of financial data from financial systems is notoriously difficult for various reasons such as it is deemed to be risky (rightly so) and organisations might not be so keen to share it with other organisations. In my opinion at some point the ability to do so will become common place if not even a regulatory requirement, as it is in Germany.  If we can make sharing of this data safer for both the customer and the organisation then the creation of social objects around banking will become much more widespread. So here are a few real world examples I have found on my online travels.

Blippy, a social network built around sharing what you had bought, recently declared they were on life support and were close to pulling the plug.  Sharing what you have bought is a classic social object ‘Oooh I love it I must also buy one! Dear God you paid how much for that?!’. I personally think Blippy died not because people were not keen to share what they had bought but because there was no safe way to do it (I have spoken before about the anti-password problem in banking) and because no one wants a social network just to talk about that one thing but if you input ‘I just bought’ into Twitter search I bet you get a high number of results.

BillGuard is another startup looking to get people to share what they have bought but instead of to discuss the item this time they want people to crowdsource safe/bogus transaction. Post a worrying looking charge on your credit card and people in the community can confirm whether they have also had this charge and are worried or other people can confirm what it is.

Instead of focusing on what you have bought the opposite is also a perfect social object, what you are saving for. SmartyPig in the US have implemented this perfectly.  A quick search for #SmartyPigGoal on Twitter reveals what people are saving their hard earned cash for. A list of dreams, desires etc. etc. Saving for my dream wedding or 2013 Glastonbury tickets. If you so desire you can contribute to your friends savings goals to help them on their way of reaching their goal. Now if that is not a conversation starter I don’t know what is. Or how about eToro Open Book a community that shows what currencies people are buying and selling the act of trading becomes a social object.

What about those in financial difficulty? The natural reaction maybe shame at getting into such a state but by hiding this away it can only make things worse. A problem shared is a problem halved. Money Saving Expert have created a fertile safe haven for people to share their debt situations and get advice from a community of strangers to help them out. By building a community around the saving of money from vouchers for money off to detailed guides on how to batter down the cost of your mobile contract or car insurance, Martin Lewis and staff have created the biggest, and most viewed financial community in the UK. The website alone is the most viewed site in the UK about financial matters. The forum is second. Third is the Financial Times. His weekly deals email is subscribed to by over a million and a half people. It is full of social objects. it is itself a social object.

Another form of social object is the person to person loan. Kiva provides a platform for people to request funding for small businesses in remote places. The social object is the desire for someone half way round the world to start a business. The other side of that social object is the desire to help someone out. I think the successful social objects around banking need to engender that desire to help or offer advice based on your own experiences.

HSBC ran a huge global campaign back in 2007 called Your point of view. Adverts splashed across the worlds airports, global press etc. featuring a set of images and a caption that worked on both images. Perfect conversation/thought provoking fodder.  It was backed up by the usual microsite (now sadly closed) but did not really capitalise on the social objects it had created in the fact that they were not easily shared and there was no easy way to have a discussion around them. That being said the campaign managed to be excellently parodied as part of a spoof edition of the New York Times to commemorate the end of the Iraq War so it was obviously shareable enough.  The Financial Brand did a nice writeup on the your points of view campaign.

Another example of things that organisations could make more of by making them social objects is the PDF report. Usually the byproduct of some glossy brochure/report that has been created with the primary function of being printed and sent to corporate or premium customers. Some of these are published online but just as PDFs and as such are not that shareable. A perfect example would be the recently published (and updated from 2009)  future of business report by my employers. You can find the document along with others on the HSBC Business Publications page. What more could this have been? What elements that make up this report could be social objects in their own right? What about the raw data could it be published and shared? And what about the interviews that made up this report? Surely the super cities definition and how they were chosen could be a great source of debate, I mean it does not have Sheffield down as a super city and as everyone knows this is incorrect. (Disclaimer: I may be a tad biased on the Sheffield front)

These are just a few examples of the kinds of social objects I have seen but I am interested in what social objects will continue to arise and what social objects people would like to see from banks? The advice given in Hugh’s piece is to be able to clearly define what your social object is. I am not really sure there is a definite social object for banking but looking at the verbs most readily associated with banking (spend, save, earn, invest, sell, advise, transact etc.) we can see where they might appear. So what do you see as the social objects in banking? Should there be more or should there be less? Should finance be a private thing best left to experts or something that should be shared and discussed on a global scale? Let’s see if this social object can lubricate some conversations.

July 5, 2011 5 Comments

The only Jobsworth worth listening to

Thursday the 5th of May saw a few folks from the organisation I work for head off to the Institure of Directors Hub near Liverpool Street to hear a Jobsworth speak at the Financial Services Club. Not just any old Jobsworth though, and not really a Jobsworth at all. The Jobsworth in question was actually JP Rangaswami, Chief Scientist at Salesforce and the man behind the Twitter account @Jobsworth. I had been looking forward to this event for a long time, in fact a very long time as it had been cancelled 3 times due to JP’s hectic travel schedule and this event was almost cancelled as well. Thankfully JP agreed to speak even though he was suffering from jet lag having just returned that day from San Francisco.

The evenings host, Chris Skinner, gave JP a warm introduction and provided an overview of his background (Used to be CIO at Dresdner bank, ex Chief Scientist at BT and now of Salesforce) and why he was here this evening (because he has been providing fantastic insight and thinking around innovation, collaboration and communication for the past 20-30 or so years and he has a few things to share…he has a lot to share actually and is a big advocate of sharing as much as possible).

He began with a rather stark statement ‘People have the lowest expectation of valuable output in innovation terms from the banking industry’. JP was very sympathetic to the bankers plight around innovation saying that the ‘conditions inside the financial industry are very adverse’. I found myself nodding along wistfully…

The cheery tone continued as he discussed Clay Shirky’s thinking around the collapse of civilised societies and the causes.

1. Act of God
2. Overfarm the envionment – Strip it of all the natural resources
3. Ecological balance – The failed introduction of a new species making another extinct.
4. Collapse due to the society becoming so complex it would no longer function. The one most likely to happen to banks? Surely not…they are such simple and straight forward organisations? 😉

A great quote from Clay’s piece rings a few alarm bells

‘Tainter’s thesis is that when society’s elite members add one layer of bureaucracy or demand one tribute too many, they end up extracting all the value from their environment it is possible to extract and then some.’

With the scene set somewhere between depressing and suicidal, if you work in a bank, it was on with the show. JP had three themes weaved into his talk that I think were roughly broken down as disruption, communication evolution and designing for the loss of control.

Incumbents vs Disruptors. We started with communications disruptions. When ISPs began causing AT&T a major problem in the United States was when they started charging $20 a month for access to the Internet. AT&T the dominant market player, the one with unrivalled scale, owner of the majority of the actual network infrastructure found their actual cost to provide internet access was $28 dollars and that was without any profit for them.

Clayton Christensen’s work on incumbents was mentioned, specifically his study on the the fixed disk drive market. A classic case of a technology that the incumbents wanted to make cheaper, better, faster. A technology the disruptors wanted to in some ways destroy.

Incumbents are at a disadvantage in as many ways as they are at an advantage. With AT&T is was the layers and layers of business process, infrastructure that had built up over time and meant they had no way of reducing the margins. With the disk industry it was clinging onto a dying technology or sacred tenet. Disruptors may have high innovation levels with low performance/takeup/scale. This must still be seen as a danger. Hanging on to dying business models is just dumb but how many organisations are smart enough to see they are dying let alone that they should not be so sacred and are willing to kill them off? To truly innovate you have to challenge those sacred things. In big organisations this is near to impossible (especially in banks) ‘You can innovate over there in that area we don’t care about’ was direction that JP had been given in the past.

The word Bankrupt literally means a failure of trust, at what point does the lack of progress or innovation start to effect how much customers trust you? He finished with some scant crumbs of comfort ‘I have a great deal of sympathy for the people in this room’.


Communication Evolution. JP began by rolling out the fact that social media messaging volumes overtook email in September 09 (not sure of the source? Or what denotes social media messaging but the point still works). His youngest child has owned a Blackberry for 2 years. She does not subscribe to any email provider on the device. The Blackberry that most bankers carry almost singularly for the purpose of corporate email is being used by different groups in a completely different way. For his daughter it was all about group broadcast and presence provided by the Blackberry Messenger Service.

Half way through next year sales of smartphones & tablets will outsell both desktop and laptop PCs combined. Facebook continues to grow at a never before seen rate and only a fool would think it will not overtake the population of China (1.3 Billion) by 2020. How long have smart phones been on sale vs PCs? These forms of communication are growing at a rapid rate they are changing how we communicate and the language we use. How long did it take to stop using ‘thee’ and ‘thou’ and revert to ‘you’? How long to switch from you to ‘U’?


The iPad is only 13 months old, iPhone 4 years (and I think the Nintendo DS should be included in this) and a ‘2-3 year old child now touches a TV screen, not to put their sticky paw prints on it but becuase they expect some feedback/interaction.’ The physical household is no longer 4 or 5 people gathered around a TV. It is more like 6-8 communities. The average household has 6 Tvs, 3 PCs and 4 smartphones…

As technology becomes more advanced and available to ever greater numbers of people it becomes a means of speeding up evolution. With the continued compression of analog tools into smaller digital form factors such as the iPhone with its ever growing Swiss army knife of sensors such as the compass and gyroscope. The fact these devices are getting ever cheaper helps to accelerate the growth of innovation due to the nature of a reduced cost of entry.

‘Technology allows you to have claws or armour before you have evolved to have them yourself.’

Designing for the loss of control. This was the topic I was most looking forward to. It ties in to a lot of things that I believe and as such I was keen to hear JP talk after reading many of his posts on the subject. Designing for the loss of control for many still working in an environment that is locked down to the nth degree via things like the corporate desktop which JP likened to being the equivalent of being stuck with a bakelite rotary dial phone. He continued ‘God help you if you have to deliver to/from a locked desktop’ at this point I think quite a few people in the room were fighting back tears and reaching for the sleeping pills.

JP had recently visited Salesforce new acquisition, Heroku. The office environment was not your traditional one. ‘There were no desks, how do you design for a workplace with no desks? or no fixed wires?’ Do these locked down restrictive environments of banks lead to locked down and restrictive solutions being developed inside them? ‘If you design things that work only in a narrow alleyway then customers won’t go there’ or they will hate you if you make them go there.

Inside the banking world there are so many conversations around innovation. Meeting after meeting on innovation. Outside the traditional banking world innovation is just happening as people are just building, building, building. They don’t have the layers of process and bureaucracy. They also don’t have the other intrusions that bankers face…

‘Have you thought of the compliance implications?’ ‘No I have not thought about them at all…what do you take me for?’ A familiar sounding story from JP’s time at Dresdner.

To truly innovate you need to challenge these rules, barriers and constraints because innovation happens outside them. You will fail but you need to store those failures and use again in the future.

‘That’s not the way it works at our bank’ ‘Well good luck to you and see you in 10 years when your bank fails.’

And that is my recollection (limited by my note taking) of the event but there was so much more (Google prediction API used to see which employees work best next to each other and the work of George Gilder to name a couple). If you get the chance to see JP speak then take it. That being said for all the wit and wisdom of JP the best quote of the night actually came from my colleague Darren after the event ‘One of the best talks I have ever heard and also one of the most depressing’ said because he agreed with pretty much everything JP said and he knew we were pretty much powerless to do very much about the things that needed to change. Mr Rangaswami was right to have sympathy for us.

Thanks very much to Chris Skinner and all at the Financial Services Club for putting on the event (if you are interested in banking events like this you should probably join the FS Club). You should of course subscribe to the feed from JP’s blog and read it as often as possible as it just might stop you being such a jobsworth.

May 19, 2011 Add Comment