Future Bank Summit 2014

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Invited speaker at Future Bank Summit. Spoke on 'breaking open the bank' through co-creation. http://www.futurebank.ie/ #futurebank

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Future Bank Summit 2014

  1. 1. Copyright © Liam Ó Móráin 2014 Breaking Open the Bank Liam Ó Móráin
  2. 2. Copyright © Liam Ó Móráin 2014 Top 50 Global Brands Source & Copyright © Interbarnd 2014. (23) (32) (33) (44) (48)
  3. 3. Copyright © Liam Ó Móráin 2014 Loyalty & Passion Things that serve a purpose Things that people love Emotional connections make great brands. The relationship is often irrational!
  4. 4. Copyright © Liam Ó Móráin 2014 Loyalty & Passion Emotional connections make great brands. The relationship is often irrational! Things that serve a purpose Things that people love
  5. 5. Copyright © Liam Ó Móráin 2014 Apple realized if it created everything itself it would greatly constrain the number and range of apps. Apple has become a platform where 3rd parties can create products and services known as ‘apps’. Apple maintains the standards for publishing the apps and pays the developers. Apple is the distribution channel in this co-created ecosystem. Downloads to date $ paid to developers to date $ app revenue in 2013 15,000,000,000 60,000,000,000 Loyalty & Passion 10,000,000,000 iTunes accounts and credit card numbers800,000,000
  6. 6. Copyright © Liam Ó Móráin 2014 mobile monthly active users downloads to date60,000,000,000 1,000,000,000 $ revenue/user/year in US & Canada5.18 Co-created Ecosystems average number of apps installed each day20,000,000 mins average time spend on Facebook per visit18 $ revenue in 20131,300,000,000 apps available1,200,000,000
  7. 7. Copyright © Liam Ó Móráin 2014 Co-created Ecosystems
  8. 8. Copyright © Liam Ó Móráin 2014 An APP A piece of software performing a single task or small set of tasks which is very different from the more traditional big enterprise apps banks have built and deployed. Co-created Ecosystems The co-creators The creations
  9. 9. Copyright © Liam Ó Móráin 2014 Source NUI Galway & Gigaom Research 2014.Co-created Ecosystems….
  10. 10. Copyright © Liam Ó Móráin 2014 Co-created Ecosystems…. What are the challenges facing banks today that suggest the current business model is under threat and that co-creation is a viable option? How can banks draw inspiration from companies like Apple, Google, and Facebook and offer products and services created by others that customers want? Should banks copy Apple, Google, and Facebook and develop their own co-created ecosystems?
  11. 11. Copyright © Liam Ó Móráin 2014 Challenges facing (retail) banks! While numerous, focus today is on: The distribution model i.e. branch network Physically constraint and very costly Customers have an incredible digital retail experience in most places except in retail banking (think Apple!) Competitors are eating away at the fringes: Wonga, Stripe, DWOLLA, Square, Ripple, Currency Fair, Tesco
  12. 12. Copyright © Liam Ó Móráin 2014 Challenges facing (retail) banks! Branch network: Swallows nearly 50% of bank operational costs Is not open 24/7 Legacy locations may not be fit-for-purpose Product & Services: banks and in particular banking processes make it hard for customers to love them! Technology & Operations: Held together with band aids Smothered with compliance and fear of screwing up! Legacy systems may not be fit-for-purpose.
  13. 13. Copyright © Liam Ó Móráin 2014 Opportunity for (retail) banks! Branch network: Varied layouts and types of branches Some full service; some very basic; some in between Digital and Physical blend seamlessly Perception of scale and ability to meet customer needs any where, any time Product & Services designed to meet varied and tailored needs of customers often created by others. Technology & Operations: Operational excellence e.g. STP Exceptions are rare! FOCUS TODAY
  14. 14. Copyright © Liam Ó Móráin 2014 Co-created Ecosystems… Offers huge customer base Core business is a platform through which all activity flows Powerful network effect Manages revenue collection and distribution Major data and customer analytics Why 3rd Party Developers Love these ecosystems?
  15. 15. Copyright © Liam Ó Móráin 2014 Great customer base – low churn Incredible depth of data on customers Co-created Ecosystems… Why 3rd Party Developers would love to work with banks? What 3rd Party Developers need? A Platform Access to the bank’s DATA VAULT! Combine with other data sources to create services of value. Break Open The Bank!
  16. 16. Copyright © Liam Ó Móráin 2014 BROAD customer data Bank Credit Card 16 Day in the life of a customer What a Bank sees … Customer: Joe Bloggs • Withdrawal Grafton St. ATM • Transaction successful • Account: -€60 On the way to work, Joe calls his friend in Berlin. At work, he Googles to research impact of the Ukrainian crisis on the stock market. Joe wakes up in the morning. He checks the news on his iPad. At lunch, Joe goes to the ATM to withdraw money. He pays for a wedding anniversary gift for his wife with his credit card. Joe calls his Bank’s Relationship Manager, Shirley, to confirm the position of his stocks given situation in Ukraine. However Shirley was not available so he left her a voice mail. Going home, Joe uses Twitter, Facebook and LinkedIn account, and watches YouTube. 1 2 3 4 5 6 7 8 Joe gets home and he goes online on his iPad to read books and surf the net. Customer: Joe Bloggs • Credit card transaction successful • Merchant: Cartier • Credit account: -€2,500 • Bank’s RM Shirley receives phone message to call Joe Bloggs. Customers experience BANKS as a set of interactions through various mediums throughout their busy lives, not as a number of “channels”. On the other hand, a BANK sees the customer as a series of discrete transactions with little context. BANKS sees these as siloed transactions within different areas of the bank… How well do BANKS know their customers and understand their world? DEEP customer data Transactional Data Connecting the dots...crossing the data & digital divide… Back end systems
  17. 17. Copyright © Liam Ó Móráin 2014 ARMY OF 3rd PARTY DEVELOPERS will marry the two data sets and discover things of interest Source: Career Rocketeer DIGITAL FOOTPRINTAv Joe Footprint DEEP DATA BROAD DATA SM ART DATA & SERVICES Connecting the dots...crossing the data & digital divide… reaching customers BROAD customer data Google etc. great at mining! This is BIG DATA. Offers clues and insights DEEP customer data Transactional Data Business Intelligence Answers to known questions
  18. 18. Copyright © Liam Ó Móráin 2014 Connecting the dots...crossing the data & digital divide… reaching customers Customers post ideas on CA Store ‘Les Digiculteurs’ encouraged to contact customer Most apps have narrow but important function Process to manage apps and seepage of malicious code Breaking the Bank Open
  19. 19. Copyright © Liam Ó Móráin 2014 Connecting the dots...crossing the data & digital divide… reaching customers Open source API and APP store for banks Kinder Bank A PFM for children. Providing kids with categorised money trail of transaction history. Breaking the Bank Open
  20. 20. Copyright © Liam Ó Móráin 2014 Connecting the dots...crossing the data & digital divide… reaching customers Breaking the Bank Open
  21. 21. Copyright © Liam Ó Móráin 2014 Connecting the dots...crossing the data & digital divide… reaching customers Breaking the Bank Open
  22. 22. Copyright © Liam Ó Móráin 2014 Connecting the dots...crossing the data & digital divide… reaching customers
  23. 23. Copyright © Liam Ó Móráin 2014 Connecting the dots...crossing the data & digital divide… reaching customers
  24. 24. Copyright © Liam Ó Móráin 2014 Q1 Y1 Q2 Y1 Q3 Y1 Q4 Y1 Q1 Y2 Q2 Y2 Hackathon Dublin Open/Linked Data Census Data, Revenue Data Hackathon Stockholm Bank APP Store 1.0 Hackathon London Hackathon Berlin Hackathon San Francisco SDK & API Transactional Data Account ActivityBank APP Store 2.0 Customer Data Global App Developer Base Global Reach Global Customer Base Group-wide capability Bank APP Store 5.0 Economically Viable Ecosystem Breaking The Bank Open
  25. 25. Copyright © Liam Ó Móráin 2014 Business Rationale • A place to innovate and try new things • Free Apps (targeted advertising) • Paid Apps • Revenue to Bank & Developers • Positive reaction amongst key influencers in digital community • Target squarely at Digital natives and device savvy customers • Attracts non-customers • Garner digital insights • Understand better the digital footprint and digital life of customers Technology • Identify and make available customer data (anonymized) • Build SDK and development infrastructure • Expose relevant APIs: a/c balance, ID&V, SSO, a/c transfer • Protect customer and data privacy • Build securely • Build transparency, audit capability Breaking The Bank Open
  26. 26. Copyright © Liam Ó Móráin 2014 Legal • Legal entity 1˚ removed from parent bank! • Toe-in-the-water approach. Easy to pull and distance Parent Bank and brand • FSA/Central Bank and what is permissible. • Regulated entity? Operational Structure • Provide infrastructure to test, validate, and approve Apps • Management payment to developers • Manage advertisement network Breaking The Bank Open

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