Back to the future

Although it might appear that our group is desperately lost in cyberspace: we are heavily thinking about analogue services which can be improved together with the digital ones. Overall improvement is the goal.

Our ideas are revolving around face-to-face service as well as personal visits and phone banking. Further there should be found ways to create a more inviting atmosphere in the branches itself. 24/7 service will be thoroughly discussed and might be implemented by mobile banking as well as video counters in the branches to ensure face-to-face advice all day and all night.

Aktia has yet done successful improvements with some impressively good ideas. We are already on the road, but now heading to the autobahn in order to take over the other cars on their way to the customer…

Be ready for more Royal Mess!

Matthäus

Inspiration Time

When you are working the whole day you have to find different ways to fresh up our mind and get some new ideas you haven´t initially thought about.

As we discussed possible solutions and got stuck at some point, the group just decided: Why always only look for a solution, shouldn´t we simply analyse the tools we have at hand and afterwards check for the problems we can solve with them?

Done!

Stay tuned to our blog and Twitter to get the latest updates about our working process. Some inspirational thoughts on website design will be posted soon...


Matthäus

Yes we mean you!

Dear reader,

what are your thoughts on the future of banking?

Do you think that face to face bank encounters and branches will totally disappear?

In which direction will the business evolve?

What might be the future trends in your opinion?


Share your thoughts with us! The team is excited to get some new insights and inspiration from your viewpoints :-)


Matthäus for Team Royal Mess

Future Trends

Branches

Dissenting with many forecasts, there will still be branches, because people want to see who copes with their money, it is a matter of trust. But the branches will change.

New fresh bank counter design will provide an open and trustful image of future banks. Generally the branches will look more inviting and more open to the customers. There will most probably be fewer branches and smaller ones with less staff. New technology will be provided inside. It might be possible 24/7 to get face to face assistance via monitor and teleconference. Many services can be done by the customer himself within the branch on special counters.

Further also smaller developments have to be stressed, like new design for ATMs which increases privacy.

Do-it-yourself

It is estimated, that the customer can do 90% of banking services on his own. So why not encourage the customer to do so and through this make banking faster as well as save costs?

Future branches might therefore rather resemble check-in counters at airports, where the customers can do their banking business on their own. There will only be a few people assisting these actions in case of questions or insecurities.

The most opportunities for do-it-yourself banking most probably offers online banking. It is accessible every day and during all times of the day. Further you can reach it from your home via computer or mobile phone app. These online services will be further redesigned to make it even easier in the future to do your business from the place you are at the moment. Along with online and do-it-yourself services comes mobile banking and customization.

Mobile banking

Mobile banking via the internet is definitely still a trend and a growing market. It allows the customer to transfer money from every place he is. It paves the way to 24/7 omniscient service, which also means 24/7 possibility to make business and spend money, possibly increasing spending.

Furthermore mobilization also concerns the field of assistance. The customer will connect his device to the bank and get assistance via teleconference or video conference directly on his mobile device or PC. This advantage makes assistance faster, accessible from everywhere and every time. No longer the customer has to go to the branch and queue or make an appointment if a problem appears, he gets help instantly.

Customization

A trend for the future is surely also customization. User interface will be tailored to the customer´s needs in order to make access faster, easier and more efficient. This might also reach new customer strata who are not using online services by today. The advantages of the digital age, offering much data to analyze your customer gives the company many opportunities to customize services, offers and profiles.

There will be new ways to perform research on customization. Demographics will no longer play such an important role, the trend will shift to psychographics. Nowadays many offers are tailored to life-stage banking but more efficient might be lifestyle banking guided by the customers´ attitude, values and beliefs.

Cooperation turns to co-creation

Cooperation is still essential in the future. But even more crucial is creating new services and offers. In an interconnected world this will more often only be possible in cooperation. Banks, retailers, technologists and telecommunication providers will cooperate to co-create new trends. A focus should be especially put on the cooperation between banks and telecommunication providers. Banks have the knowledge, experience and licenses for the money business while the telecommunication branch provides leading-edge possibilities to reach customers as well as an overall network and infrastructure to offer services everywhere.

Cooperation can also be regarded under the fact that people no longer strive for owning things as long as they can still use them. Car-sharing schemes or internet services like Spotify are an indicator for this trend. This might inspire some new co-creations.

Digitalization

Digitalization can be as well a blessing as a curse. Firstly it opens up new opportunities to offer services to customers and make banking mobile and therefore everywhere accessible. Secondly it provides the opportunity to gather more information in an easier way, which allows the company to tailor its services and marketing better to the demands of the specific customer.

However, digitalization and major shifts triggered by it in the market of financial services also changes the environment. New competitors in this field might appear, like for example Google. The company recently started the Google Wallet service and payment services are one of the three top priorities for Google in the future. There are already real life examples how digitalization can change whole markets and the structure in it. Apple is nowadays the world´s largest music retailer with its iTunes online store, totally disrupting the market with its initial actors.

Digitalization also means "Bye Bye" paper, which has the advantage that many tons of it will be saved, decreasing costs and having a positive effect on the environment.

Sources

- http://www.ideo.com/work/redefining-self-service-banking-for-bbva/

- http://www.everestgrp.com/2011-07-banks-of-the-future-bank-big-on-technology-the-changing-applications-landscape-in-the-global-banking-industry-sherpas-in-blue-shirts-5797.html

- http://www.bankrate.com/finance/banking/tech-trends-future-of-banking.aspx#slide=6

- http://www.infosys.com/building-tomorrows-enterprise/trends/Pages/banking-trends-cards-2013.aspx

- http://thinque.com.au/blog/future-banking-top-3-disruptive-trends-banking.php

- http://www.banking2020.com/wp-content/uploads/2011/04/Intuit-Corp_Banking2020_FINAL.pdf

- http://www.cisco.com/web/about/ac79/docs/fs/Future-of-Retail-Banking_5-Year-Vision.pdf

Matthäus

Is NFC technology the payment system of the future?

Touch-less and cable-less data exchange can be definitely identified as one of today´s most emerging trends. Ranging from the commonly used wireless data communication, internet through WiFi and mobile phone networks, over identification cards to enter buildings or the bus up to cable-less charging of the new Nokia Lumia phones. And the trend might also be used in the banking sector by implanting the NFC technology for fast payment of small amounts.

Fields of application

Most commonly NFC technology is already used in identification cards, for example giving access to local transportation networks like busses and metros or allowing persons to enter buildings. Further Stickers with NFC are put on packages in order to locate them faster in storages or integrated into labels as anti-theft measures.

A very interesting application is the usage for fast payment with credit cards already implemented in some countries, mainly North America, Austria and recently Germany . This service is called PayWave by Visa or Paypass when provided by MasterCard.

Further phone manufacturers are starting to provide phones with already integrated NFC chips or add special NFC stickers to be put on the back of your phone in order to use new payment services like Google Wallet.

Advantages

So what are the advantages of this technology?

Basically it is a very fast and not complex way to pay small amounts of money. However, it also increases daily security, as you are not obliged to carry that much money with you in everyday life as most payments can be done by your NFC smartphone, making it less attractive for thieves to rob people.

Risks

Every new technology has also some risks, especially in the electronic sector and when it comes to money.

Critics revolve around the safety of data on the card. Experts argue that the cards can be read out through the pocket within a range of 10 centimeters, making it easy for thieves to get credit card data, particularly in crowds or public transportation. Additionally the authorization processes on the terminals might increase the traceability of the persons, further leading to a glass customer.

If someone loses his card, fraud is made even easier, as for these small payments with the NFC technology no signature or pin code is checked. The thief is able to buy things until the card or phone is blocked. Although only small amounts can be paid in this way, still a striking financial damage may be done to the customer

Eventually some companies doubt, that NFC technology is the payment scheme of future. It is still bound to check-out terminals, which might create queues. Service providers like PayPal strive for more mobile payment systems, making it for example possible to pay things from every point inside the shop just by scanning the barcode with your smartphone.

Crucial questions will be: how long will this technology for mobile payment take to be implemented? Does this make NFC technology only a bridge technology, not worth to make large investments into it?

Outlook

The NFC technology will definitely enter the market. It might be successful in a world continuously yearning for faster utilities. Whether it will finally make a fortune can be observed in the following years. The break even point might be reached already.

Sources

- http://www.schickler.de/expertise/studien/Dokumente/Schickler_Kompakt_MobilePayment-2013.pdf

- webpages of companies involved in this business

Matthäus

Face to Face vs. Internet - Will Online Banking completely substitute Face to face service?

More and more banking services are offered online nowadays. Companies transform their business into more online banking as this saves costs and gives the customers as well as the bank itself the opportunity to do business 24/7.

Face to face means trust and trust is especially crucial when it comes to money. Hence still many people prefer to do important business on the bank counters and not online. Particularly the current generation 50+ still does not trust the services offered on the internet. Furthermore they worship the opportunity to get assistance and advices.

Online Banking opens up many new opportunities to offer new services to customers. They now can check their business from home and do transactions all around the clock, not bound to any opening hours of bank counters. Further, the online banking desktop can and will be customized to the need of every single customer in the future, making this way of banking even easier and more efficient. Services on the internet save costs, as there are no longer needed branches in expensive downtown areas with employees to be paid, which of course can also be seen as an disadvantage when people lose their jobs.

What to do?

Both types of services can melt and adapt attributes from each other. Face to face marketing will still play a large role in the future, but has to be transformed. Future face to face assistance can also be done 24/7 in banks, for example through video counters connecting to a customer service center or advices through connection to the customer via webcam. Face to face marketing can also adapt lessons learned on the internet, like for example increasing customization of services. There have to be found ways to prepare bank workers for the next customer in order to offer him better service and help.

Concerning online banking there still have to be made developments in the user interface as well as to be found new measures to increase payment security. Other advantages of the well connected world can be used, like for example a shared desktop, where bank advisers can directly assist the customer, whether in the banks itself or on your own computer.

Matthäus

Future Vision, Strategy and Outlook

Aktias aim in the future will be to develop especially the customer-oriented banking and insurance- solutions and add value to the customers, owners and the local community. Their vision is to be the leading bank in helping customers improve and safeguard their finances. The core values include 5 main themes: responsibility, customer closeness, security, individual service and last but not least, active customer contact. They strive to be a modern, active and committed bank that takes good care of its customers.

In order to being able to integrate their subsidiaries under one brand, Aktia has made the decision to execute a centralised group model control. Thus their strengths in the future will include decision-making on local level. The main targets geographically is the bilingual coastal area as almost 50% of the customers are bilingual (Swedish-speaking Finns) as well as certain chosen cities (Helsinki and its region, Turku, Tampere, Oulu). They aim at achieving growth through cross-selling services and products to the customers of the group. Collaboration is an important part of the services Aktia offer; it is made with partners such as Veritas Pension Insurance and Folksam, which are the two most important of Aktias cooperation partners. Aktia wants to point out that their main competitive advantage is founded on the dialogue between customer and staff. This is possible due to the fact that Aktia is a small bank and wants to offer their customers a close, personal relationship to the bank and its staff.      

Aktia is striving to grow slightly more than the market in the times to come, especially in the fields of services to private customers and small companies. The plan of action includes, as mentioned before, becoming the Finnish champion of customer services in selected customer segments in 2015.

- Mikael L 

The Future of Banking Services

The Future of Banking Services

Edited by Jaakko Aspara, Risto Rajala and Virpi Kristiina Tuunainen

I read the book The Future of Banking Services for our book assignment. It is a rather comprehensive piece of literature that covers a lot of topics concerning the future of banking and which features the banking services will include in the times to come. It was published in 2012 by the Aalto University of Economics in Helsinki.

The book starts off with the chapter Special Report – The Future of Banking Services from the Consumer Perspective. It introduces a study of the possible roles of banking in our everyday life in the future. The editors made a study that was made among young people in several countries. One of the main observations made was that the young customers appreciate a good, trusty relationship with the bank and its personnel. They look for long-term relationships with banks and put a high value on trustworthy, expert personnel. Efficiency and creative solutions are also highly valued characteristics among banks and their personnel.
The study was made from the customers’ point of view, and the main goal was to investigate the attitude of young customers toward banking services. The editors also wanted to outline what the future of banking services could be like. The rest of the book is a report of how the results of the study practically could be implemented; personalization of services, building of long-term relationships and innovative banking solutions.

-Mikael L

To be a trend or not to be???

To reline the book report on trend forecasting it is crucial to illustrate what a trend actually is. Because fully understanding this issue is essential to rightly adapt the methods promoted by The Forecaster´s Handbook, I will use a whole post to do so.

So what is a trend?

Actually it has not to be physical or aesthetical. The change can also happen in the minds of human beings or simply through emotions. The people´s new ecological awareness of the recent years can for example be counted as a trend, too. A trend is an anomaly which is slightly becoming more common, more accepted among the people. Oppositely to a style, which only shows the difference to the status quo, the trend additionally illustrates the direction into the examined phenomenon might be moving. The word might in this sentence is crucial, because no one can forecast the future for sure. This compels every company and every strategist to develop different scenarios.

Scenario planning is stressed because it is essential to be prepared to react quickly to any changes happening in this fast changing times in a multi-connected globalized world. According to these scenarios there can be crafted action plans giving advice what to do and how to cope with the development if one of these scenarios suddenly occurs. The company with the most thorough, best refined and best reflected scenario plans will come out of this new development as the new strongest actor in the operating field. Like Shell did after the oil crisis in the 1970´s, as it was the only company prepared even for the unthinkable scenario of an oil boycott of the OPEC states.

Resuming the already posted point, that trend forecast is a multi-field science, Biologist Richard Dawkins compares trends to genes calling them memes. Genes assimilate themselves and change by going through bodies, memes assimilate themselves and change by going through brains. Genes as well as memes assimilate, learn and evolve to ensure survival, whether socially, intellectually, culturally or physically. They do so very time when people copy attributions of others which are successful and highly valued by the surrounding society.

Trends spread in a different speed due to different factors like the price of the product, whether it is actually an attitude in people´s minds or something physical and so on. But regarding the society, how do trends spread or as trend forecasters prefer to say: go viral?

Sociologist Everett M. Rogers developed the Diffusion of Innovation 40 years ago and it is still used in this field of science. The society is split up into five groups, namely the Innovators, who do not necessarily create the trend but are the first ones to discover it. Early Adopters, usually close friends of the Innovators and socially better connected, adapt the newly found trend as the first persons. These two heterophilous groups, encompassing people with the aim to be different, are very interesting for trend forecasters, because usually they are needed to gain the critical mass a trend needs to start spreading.

The Early Majority starts using the trend when it already spread but still is not known to everyone, while the Late Majority, a more skeptical part of the population, starts settling on the trend when it is really proved in the exercise through other groups. A trend adapted by the last and least changing stratum of society, the Laggards, indicates that the trend is already gone and rather common habit than new pattern, hence a good trend forecaster should have already scented the next trend.

  

Based on The Trend Forecaster´s Handbook by Martin Raymond

Matthäus

The Trend Forecaster´s Handbook

Trend forecast is important as Team Royal Mess has to deal with future banking in our group´s project with Aktia. This makes it necessary to gather for insights into techniques which help to perceive new trends. The Trend Forecaster´s Handbook by Martin Raymond should deliver these insights. Investment into new trends is risky and therefore has to be well reflected. Companies lost billions of Dollars in the fight for superstition in the market, for example between the VHS and Betamax in the 90´s or just a few years ago when the question appeared whether to endorse the Blu-Ray Disc or HD DVD.

This piece of literature sophistically provides much knowledge, many examples, case studies, stories from successful trend forecasters and how they work as well as a guideline for all phases of trend forecasting from detection to the actual product development.

Information is power - Multi-field research has to be done in trend forecasting ranging from neuro-psychology and complexity theory over behavioral economics up to network science as well as ethnography. You have to know your sector, your products, your company and brand as well as the target group very thoroughly.

Methods of trend detection

Martin Raymond provides many advices how to behave during the working process and what essential points should be regarded and covered. These methods will definitely be used by the project group in order to answer the crucial questions of a trend forecaster: "what", "why", "how", "where" and "when" does something happen.

This book thoughtfully lays down the different forms of intuition, well reflected by providing the advantages as well as the disadvantages. The author clearly states, that intuitive trend perception may be right and useful, but it is hard to be illustrated to a customer, who aims for a data-driven explanation about the whole working process. In order to solve this challenge this piece of literature promotes different cutting-edge methods to map your thoughts and to refine them, namely gut intuition, expert intuition and strategic intuition. Furthermore there is a red string through the whole book guiding you from the first perception up to the last step, the actual product development.

Cultural Brailing, kind of hyper-observation, is one of the methods to detect trends. It consists basically out of observation and asking the right questions about the perceived objects or habits. Since this should happen without prejudgment, suspension of logic is sometimes crucial. The human brain automatically associates new sights to known stuff, but this lets you create only the same stuff over and over again, but nothing new. Logic hinders creativity!

Many new thoughts are not logic but make sense later. The motto Think of the Unthinkable has led to many ideas which revolutionized the world. Open your mind!

Many brains have more power than one does. In order to work together to find a trend they have to be connected which happens via a network. The author examines the different types of networks, from the hierarchical over the collaborative to the distributive network, and shows the pros and cons of using them. Networks are everywhere today, yes you are already using a distributive network by reading this blog post!

App-lication

Now cutting down trend forecasting to the banking sector and Aktia, what are the crucial points in the future of banking? An issue to discuss will be definitely the developing story of the NFC technology. Further there has to be analyzed in which extend online banking will grow and additionally what role face-to-face service at the counter will play in the future. Finally and most importantly: what are the trends no one anticipates today?

Questions over questions which have to be thoroughly researched to draw scenarios and make conclusions out of them in order to respond quickly and effectively to future trends.

Fin.

Matthäus