Sunday, 22 June 2008

The Next Big Thing?

Over the last couple of weeks have been catching up on innovations and trends in mobile telephony, entertainment, gaming and a few others...

One gets the impression that we are perhaps noticing an "innovation deceleration" in the banking and financial services space!

With the introduction of and advances in
Internet banking, ATMs, mobile payments, electronic fund transfers, smart cards, real time gross settlement systems etc., in the recent decades, you may believe the above remark is over critical! innovation in the banking and financial services space is hindered by :

a. Legacy Systems : Infrastructure and standards developed decades back may not easily permit the introduction of new generation financial products and payment services. Large migration costs make the business case for large spread introduction of new services challenging if not impossible.

The introduction of EMV in the UK recently requiring retailers and financial institutions alike to incur millions of dollars in costs would be a recent example

b. Adddressing New Customer Segments : One of the key challenges faced in enhancing the spread and penetration of banking and financial services to the bottom of the pyramid includes the account management and transaction costs in existing systems made unviable for low ticket sizes. Grameen has developed a new system ground up, but action awaited from global vendors on this front

c. Regulators : The central banks and other regulatory bodies are faced with the onerous challenge of advancing the use and penetration of "non cash" based services with the overbearing need to protect customer interest and finances. This often leads to large time spans for the introduction of new regulations on subjects including mobile payments.
Reliance Industries can construct a petrochemical complex in 30 months!.... whereas governing bodies can take a similar period in publishing a draft paper

Moore's law does not obviously apply in this space, and nor should we expect it. But quite clearly a need and an opportunity for the grey cells to kick in and business leaders to converge on the above.

The Revolution card is a recent example which questions the way in which we do business and puts forth a new paradigm. The need for new open platforms and standards that can support interoperability and rapid introduction of new products and services is even greater.

Which leads me to the question of the hour...which is the next ala "iphone" or "facebook" waiting to happen in this space? Would welcome your views....

Friday, 20 June 2008

Operative Guidelines for Mobile Banking - Reserve Bank of India

This is a landmark event in India. The regulatory body has taken the first step in outlining guidelines for mobile banking in India. Targeted at banks and financial institutions that fall within its ambit, the draft document is simplistic at times, but does reinforce the intent.

The need and objectives are fairly obvious, and would have preferred some finer details. I'm perhaps left asking more questions than answers being questioned.

But, to be fair to them, this domain is a fairly complex confluence of multiple industries and technologies, and they would do well in defining the ground rules in what I call the "banking & finance" layer.

If you'd like to read the report click here

Wednesday, 11 June 2008

Carbon Redefined....

I had written a post recently on how banks can go Green. Subsequently came across a great site where you can estimate the carbon emissions in your daily life.
Interestingly Nectar has offered its infrastructure in a pilot project wherein customers' carbon credits would be deducted with every fuel purchase at British Petroleum. This of course is a pilot, but a critical step in enabling all of us to measure and and contribute back to the environment.

Given a few years of evolution, banks can perhaps permit individuals to trade in carbon credits once the metrics set in