Is Banking A Commodity Or An Experience?

A commodity is a product or a service that no one cared enough about to market. Marketing creates value, by combining stories, design and care. The product or service is produced in a way that makes engaging with the item better. Commodities are in the eye of the producer. If you don’t want to sell something that’s judged merely on price, then don’t. International transfers were seen as a commodity service until TransferWise came in, so are deposit accounts (Fidor, N26, Atom), opening a bank account (Pockit), direct debits (GoCardless). There is no such thing as a commodity in banking anymore. Banking is an experience, not a service or a commodity.

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 Alex

Wouldn’t It Be Simpler Just To Launch A New Bank?
 By Chris Skinner

Should a bank just launch another bank, rather than trying to be digital and convert the existing bank. The expectation is that the new bank will eat the old bank, over time, until at some point in the future the old bank can be shut down. This is a strategy, but it is a flawed one. First, does the new bank have the commitment to eat the old bank, or is it just being launched to show that the bank can create a digital first proposition. Second, what is the commitment to the new banks’ success? Does it have the full support of the old bank’s executive team, in terms of budget, capital, resources and talent pool? Will the SVPs be happy to see their bonus destroyed and given to the newbie upstart?

When A Payment Is More Than A Transaction
 By Sofia At Lets Talk Payments

The role of electronic payments in 2016 goes far beyond basic transactions performed in vast networks to move funds from one person or entity to another. Just like banking is no longer somewhere you go but something you do, payments have turned into an experience rather than an action. Agile financial technology companies nowadays are able to turn bill payments (and other services) into a smooth and seamless, almost one-click process. As the UK government fairly noted, “good services are verbs, bad services are nouns.” As the British authority further elaborated, “To a user, a service is something that helps them to do something — like learn to drive, buy a house, or become a childminder. Notice these are all verbs.” Thinking of payments beyond transactions means understanding the value of transparent, seamless payments services.

Real-time Connections Between Regulators And Banks Is A Game-changer
 By Chris Skinner

Real-time reporting will soon be norm. But this is not even reporting; this is analysis by the regulator directly of the data of the banks. This is where the conversation got really interesting as we discussed the idea that, in the near future, banks won’t even have to think about what they have to tell the regulator; the regulator will just be taking it. At that point, regulatory reporting becomes just a hygiene factor underlying the markets. There is no conscious focus on reporting, as the regulator is keeping their hand on the pulse of the markets in real-time. At this point, we then move beyond reporting to regulatory intelligence. The idea of having machine learning data analytics applied to market data by banks and the regulator should start to show systemic exposures and weaknesses pre-emptively. Before any market structural issues occur, the markets will know it.

Wearables Could Help To Heal Health & Life Insurance
 By Daily FinTech

Buying Health & Life Insurance today is like filling in a form to tell Netflix what movies we say we like at that moment in time — versus what movies we actually watched recently. You fill in a snapshot report of your health, with blood samples and other tests run by a doctor and the premium is set. The fact that you later put on 40lbs and developed diabetes — or gave up smoking and alcohol and ran a marathon and reduced your blood pressure — impacts Insurance risk but is ignored by Insurance companies. Wearables could change all of that and revolutionize health and life insurance by a) personalizing insurance and risk and b) changing the delivery of healthcare. But first, there are three big hurdles to overcome.

5 things that made me smarter this week

Nike actually made those Back to the Future sneakers. Advances in batteries and motors made it possible for Nike to produce 89 pairs of the self-tying shoes.

African elephants walk on their tiptoes. The massive mammals put pressure on the outside toes of their front feet, and as little as possible on their heels.

Drunken birds dive-bombed a highway in Austria. The starlings had consumed too many fermented berries and ended up crashing into cars.

When you die, will you become an app? When a car ran her best friend down, a Russian AI specialist collected his digital traces and used them to build a bot that could talk to her, by text message, uncannily like he would have done.

Half of the mass of Eurasia and India has disappeared. Scientists thought continental crust couldn’t be swallowed by the Earth’s mantle, until it apparently happened.


Originally published at FinTech Summary.

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