Looking at technology specifically in financial services, there are many that are being cited as hot for 2011:
- More social media developments as firms like Foursquare, Groupon and Quora add functionalities not seen before;
- More bank mobile apps, with clever structures and device-specific security;
- The creation of new retail payments structures, as Apple and Google get into mobile payment wallets and PayPal and Facebook push credits to the extreme;
- The maturing usage of internet and mobile television, along with video communications for dialogue on the move;
- Cloud computing becoming acceptable as a service for financial applications;
- Major investments in creating agile infrastructures and platforms to respond to regulatory requirements.
First, the social media space will still be hot in 2011, particularly as location aware applications become more intelligent and integrate with the social media space.
Recommendation engines will start to link friends together based upon locations and preferences.
As you tell Foursquare your movements, it will tell you which cafes your friends like, what films they are seeing and where and more.
That’s not new, but the linkage seamlessly between Facebook, Twitter and these location aware services will be new.
For example, Quora aggregates not only who you like, but what you like and are interested in. As a result, you can not only follow people, as per the Twitter model, but you can follow topics as per the Twitter hashtag.
This means that if something is happening, such as the Wikileaks Bank of America story, you can have the news pushed to you in real-time as it happens via social media dialogue, rather than waiting for the news on traditional media.
For leading-edge financial firms, the use of proactive communication technologies that are location specific using social media behaviours will be a differentiating strategy in the retail space.
Second, mobile platforms generally will still be a big focal point for all bank access services, from retail through commercial to investment markets.
Retail will focus upon real-time apps for budgeting and loans, location specific alerts, secure access to billing and payments; commercial banking will start to roll-out treasury apps for tablet PCs and iPads; whilst investment banks will expand the deployment of iPads and tablet PCs for advisors and private wealth management services.
None of these developments are particularly departing from those we saw in 2010, except that the focal point will be increased security across mobile and tablet computing platforms.
Meanwhile, mobile for banking will not be the big change in 2011. It will be mobile and contactless payments.
This is our third development, as mobile payments will be disrupted in 2011 by Apple and Google.
The news that Apple are building NFC contactless payments and mobile wallets into the iPhone 5, to be released during the summer of 2011, has been a major revelation.
Now Google have announced that they are creating mobile payment wallets for Android, whilst other mobile carriers are getting into this space too.
Therefore the hot news for mobile in 2011 is not mobile apps, but mobile payments from non-bank payments processors.
In this context, it will be interesting to see how PayPal protect their turf, which is more than likely to be through leveraging their partnership with Facebook to increase PayPal’s dominance from the online to the mobile social space, although they better watch out as Facebook could easily disrupt that strategy.
All of this points to the fact that mobile internet is coming of age and this is no better demonstrated than through the use of higher broadband services on mobile and mobile tablet devices. For example, I watch TV regularly now whilst on the move on the iPad. From Sky Sports to BBC News, real-time streaming of TV is more than watchable on mobile devices and so the increasing integration of mobile internet with visual broadcast services will become interesting in 2011.
Chatting about the latest soap stars, Cheryl Cole’s dress or Khloe Kardashian’s hair with friends on Facebook and Twitter through the TV broadcast rather than around it via a separate device will be an interesting development and starts to move us towards that old idea of interactive TV payments.
This came up a while ago when Digital and Satellite TV broadcasting first cropped up, but now the concept of seeing Jennifer Aniston flash Adam Sandler’s name on a mobile phone at the People’s Choice Awards …
… and a special promotional offer comes up for the phone with payment taken via a contactless NFC chip built into your tablet PC as you happen to be watching the broadcast that way … is here.
Fifth, cloud computing has been discussed for a while now and will come of age in banking in 2011.
The Financial Services Club performed a survey related to cloud in summer 2009, and found that the issues of risk, operational failure, security and third party management meant that banks were averse for using such services for anything other than non-critical processes.
This year, cloud will definitely become mainstream.
This is down to a focus upon cost management and moving to operational rather than capital expenditure for services as required.
The importance of cloud came up in a recent survey in Bank Systems & Technology. The magazine asked 186 banking technology professionals why they cared about cloud computing and 73% said it was the ability to meet user demands quickly and achieve scale in the cloud.
In fact, the point is best illustrated by the comments of Michael Harte, CIO of Commonwealth Bank of Australia, who states that, thanks to cloud: “We will never buy another data center. We will never buy another rack or server or storage device or network device again. I will never let any organization that I work for get locked into proprietary hardware or software again. I'll never tell my teams in the business that it will be weeks to get them hardware provision. I'll never pay up front for any infrastructure and certainly would never pay for any, or rent any, infrastructure that I would never use.”
This is a critical point this year, and is even more critical as we look at my sixth and final area of focus: agility.
No bank can be constrained in their ability to respond to change in 2011 and any bank with systems constraints today will need to break out of those chains.
This is a major focal point as the uncertain regulatory agenda becomes even more fragmented and frictionful. As a result of this agenda, banks will be snowed under the weight of organisational, process and systems changes required to keep up and therefore business agility will continue to be the mantra.
More importantly systems agility, as critical changes are implemented in days rather than months, will be the main strategy.
Any bank that cannot create new applications for offering and delivering new services and experiences for their customers; dealing with their workflows and processes for their staff; reporting and profiling their operational management for their management; auditing and monitoring their processes for their regulators; and delivering all of this in real-time, will find that they do not have the systems excellence to keep up with the demands of 21st century banking.
And that, my friend, is the real challenge for 2011: how to be real-time nimble in a world of change.