Unfortunately I have to agree with what is said here. New customer value through new combinations of technology and services and embedding banking services into e-commerce is far too often low on the agenda. Same goes for simplifying offerings and communication.
This all is naturally rather boring compared to high profile risk taking in investment banking and so forth. Tax payers now have the right to ask for innovations in return for money spent on rescue operations.
31 Jul 2009 15:45 Read comment
Keith makes a good point in "Banks have for too long separated Sales & Marketing from Customer Service." I fully agree - and this is what has led to blind product pushing - seriously complicating things instead of dearly - both by customers and staff - needed simplification.
But then customer service yesterday is not the same as customer service today. Having had the experience of launching e-banking for private customers in -82 the counterarguments were often that it will take away personal service. For what? For paying bills over the counter, for checking balances over the phone, for cashing checks (eliminated with transparent pricing in -83) for withdrawing cash etc. Most of this "personal service" was a 30-45 second encounter.. But in the country side there was/is still a social dimension by swapping the latest on children and grandchildren.
When most over the counter and call center services were priced transparently most of this disappeared. Customers had of course paid for the service before - without knowing it (paralell case now: enterprises charging for sending paper invoices..). When the cost is shown - customers know how to behave in their very own interest. The cost of banking in Finland was cut in half - and most of the savings given back to customers in fierce price competition. Will consumer organization ever realize this opportunity to really serve cost cutting for customers?
Today it is a question of delivering good services over the Internet. And good services means that contact centres are not loaded down with routine tasks or people not understanding the offerings (simplification, simplification, simplification..). In stead of investing in handling the symptons (investing in outsourcing work that should be eliminated) it should by now be very clear that the disease needs full attention - investments in eliminating complexity and adding many logical and more holistic layers in - the by now dominating - e-banking channel.
Then as Keith says: "Sales and Service" are viewed as two sides of the same coin by customers."
15 Jul 2009 08:58 Read comment
Banks have themselves to blame for some of the complaints - having made "products" too complicated and having put sales targets ahead of real customer value.
But the problem with the above is that banks are hate objects in virtually any market situation - by media, by politicians (who follow media), by customers who do not get loans, by customers who did get loans, by customers who invested with the hope to get high yield without risk, by depositing customers who believe that the banks set the base rates so low, by customers who do not want to pay visibly for services, by consumer ombudsmen who resist transparent pricing etc etc
So the complaint stream reflects too much of the this sentiment and is difficult to be handled. Probably it is still best to make it public so that the man on the street can judge for himself if it is worth to spend his money for it. He pays every cent and penny for it himself - and this should in all circumstances be made very clear.
12 Jul 2009 07:12 Read comment
I have always thought that Ryan Air is doing the right thing - showing the cost and making the customer using it pay for it - not all customers - without knowing.
This also lowers costs for all as unnecessary baggage is not dragged onboard...
Why is this so difficult to see? Must take it to Facebook..
12 Jun 2009 13:33 Read comment
Marite: "Finland as the first country in the world to offer telephone banking (in 1982)? Like I said, telephone banking existed well before 1982 in other countries. But if it claims to be the first, well then so be it."
I:
1. I am not claiming that Finland was the first to launch telephone banking
2. e-banking for large enterprises was launced in 1979 (TELEUBF)
3. e-banking for SMEs and private customers was launched in 1982 with pushbutton telephones and overtaken by PC-banking in 1984 - using one-time code e-id
4. PC-banking was then moving over to Internet in mid90s - with same safe e-id.
Hope this clarifies - it is not the weather/darkness/polar bears - or us being so clever - just starting very early - it takes time to change behavior in the mass market.
05 May 2009 14:28 Read comment
Cedric,
This is an important discussion - I am sure you agree with me that we should give users choices, cut costs and speed up adoption of e-services. The public-private partnership model has worked really well in the Nordic-Baltic area - so why should it not work elsewhere?
I am sorry that I have not been clear enough on a few points - new try:
" What about the people who don't have a bank account? Should they be tax exempted?" Reuse of bank tool just one alternative - other tools are naturally welcome.
"Usually it's the governments role to take care of the society." Governments role is to superwise and procure services - not necessarily to produce all itself - nothing to be scared about.
"The primary role of a bank is simply to lend money." I disagree - banks have many other tasks - and new ones in the networked economy. Banks have since ancient times been a trust provider and guaranteed identity of trading partners - so this is not anything new.
" We should not centralize all the services in a single place and make fraudsters' job so easy." Banking has to be secure in all circumstances.
"Not really. Not even in Finland:" We offer alternatives - the state issued e-id has not been used - citizens prefer their familiar bank-id"
"But not secure because banks are not security experts." Most banks do this very well - and those who need to improve must do it - forced to do it by supervision if not otherwise - banking cannot be unsecure. "It has been proven by all the data breaches lately. " Really? And state issued e-id would not have similar challenges?
"But the next step is also to let banks issue passports, birth certificates..." I do not see any logic in the state not doing this primary identity.
"Besides, the first thing a reasonnable public service would do is to consult and subcontract specialists." This is the public-private partnership we have in the Nordics - reusing strong e-banking tools and supervised procedures.
" but so far you have not convinced me that banks would be a good substitute for the governments." - I am not saying substitute - just one alternative - there can be other supervised private players also - and the state can issue e-id if necessary.
"Actually it's even in line with what's happening in the USA right now" When it comes to third generation e-banking and payments I think we are ahead of the US - I do admire them for much - but they are not always right in banking supervision as we have seen..
04 May 2009 20:53 Read comment
Marite,
E-banking for large corporates was launched in 1979 in Finland and e-banking for SMEs and private customers in 1982. Multidevice with one-time code from the outset - pushbutton telephones quickly overtaken by PC-banking (1984). Most banking services where included already in the 80s. Mobile services in 1992. When internet arrived there where already 0,5 million PC-bank users - a fair share of the active population.
When you start early you have more time to learn from gradual progress.
Not really a question of wheather conditions - not differing from other Nordic countries. Some seem to believe that e-banking took off so early because people do not dare to go our because of the polar bears roaming in the streets....
04 May 2009 10:40 Read comment
Very briefly - I am not saying that banks should be the only service providers - or should do the passport or other primary identity tool. Only that it should be a choice also elsewhere than in the Nordic-Baltic area.
The state issued e-id was a very expensive flop in Finland - nobody used it. It is so seldom needed - and bank-id is so much more convenient and naturally has to be secure enough (27 years of experience - without problems).
Not to talk about saving tax payers' money...
Good debate - should illuminate issues - and hopefully avoid others doing same mistakes as we did.
25 Jun 2009 09:53 Read comment
Thank you for finding my blog interesting.
"However, there is one thing on which I disagree, Banks should definitely NOT be the electronic ID issuer." Banks are natural e-id issuers and reuse for 3rd party needs - including the public sector has been a fact for a long time in many countries (very much appreciated by citizens) - and will be in all if common sense rules.
"It goes against the neutrality principle." Why? It is a natural service for banks - guaranteeing identity has been there since banking started in Venice..
"Banks are fully capable of doing such a job, but it would not make sense for security reasons." Appears contradictive - capable but not secure?
"Whatever the business domain, one cannot be in charge of "doing" and "controlling". It's too many caps to wear for a single entity." I do not see the doing/controlling aspect here - bank e-id services are one alternative - and naturally need to be supervised - as any strong e-id issuing should be.
03 May 2009 17:41 Read comment
Marite:
Thanks for agreeing to main point: "The three neutralities mentioned are ideal given the competitive landscape that we are in."
"And these tools and technologies are hardly new." I agree.
"What would be novel is a very strong scheme to enable one e-id service work for different applications and purposes (i.e., secured email, secured online banking, secured payments, secured e-gov, etc.)." I disagree - the way e-id services have been developed in the Nordic-Baltic area have provided this since on a rising scale (for Finland's part since 1992). e-banking was launched in my bank in 1982 for consumers and the tool - 1-time code for login has been used since then. First 3rd party usage was launched in 1992 and the public sector started to use the service towards late 90s.
"There are reasons why, despite all these tools and technologies and even the definition of MORs ten years ago, card schemes and banks have still not been able to squash online payment fraud. Lack of consumer protection and lack of competition between card schemes and banks comes to mind." I disagree on most points - consumers are well protected in card schemes and banks certainly have competed in many areas. Card schemes have mostly been about branding - they have also competed - often to the dismay of merchants, issuers and acquirers when this has caused interoperability problems. Card payment fraud is a big cost for banks and I agree that more should be done to tie the payment to a strong e-id.
"- This assumes that everyone who wishes to have an electronic id has a bank account." I did not say that bank e-id would be the only alternative - only that it should be a natural alternative as it has been proven to be the citizen's absolute preference, saves money and speeds up adoption of new services. Those who for some reason still do not have a bank account are unlikely to need e-id - but can get alternative tools (and pay for such transparently)."
"- This also assumes that a person has only one bank account" This does not assume anything like that - a big part of the population have several accounts in different banks and even several e-banking services with strong and different e-id tools - you just use the one you prefer.
"- Tying-in my bank e-id to secure other applications will make it problematic for me to change my bank if I'm not happy with it?" You are not tying your bank e-id to any application and the technical interface is standardized - so changing bank is no problem - as is not changing service provider in the 4-corner model.
"- Tying-in my bank e-id to secure payments with cards issued by other banks would pose some conflicts?" Why? Open competition should be furthered and development towards federated e-id schemes should be promoted.
"- Tying-in my bank e-id to secure a p2p payment with a payment service provider that competes with the bank that issued my e-id would certainly pose a conflict." Why? In our cases banks have been quite prepared to let also up-to-ethical-standards service providers use their services - again furthering competion.
"An e-id is an asset that belongs to a consumer." Disagree - the habit to use something offered by somebody belongs to the consumer - and is an asset for society at large that should be leveraged.
"A consumer should have the ultimate choice of how he wants to use this e-id." Not only how - but naturally also which up-to-standards-tool.
The three neutralities mean that there will be choices - banks and others providing reuse of their strong tools, single-purpose "neutral" service providers, possibly even governments issuing tools (even if that has failed to take off in all cases I know about - well known and very expensive failure in Finland - please do not do the same mistakes we have done..).
E-identity is classified as a business in EU and any service should thus be transparently priced and compete on equal terms. In the Nordics it has been as natural to further public-private partnership in this field - and the private sector has well understood that proper supervision is needed. All involved have - after some debate and experimentation come to the conclusion that this works well - nobody has after 17 years of 3rd party e-id bank services really come across any downsides. The only thing that needs to be changed (under way) is the move to a proper 4-corner model.
03 May 2009 17:30 Read comment
Electronic invoicing
Whatever...
Transaction Banking
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