Iron Maiden, Trust Communities, and Disruptive Behavior
Just another day in the life... Dinner in Mexico City and who do we see? The rock group Iron Maiden shows up at the hotel where we are eating and we get filmed as part of the entourage. Wonder if we will be able to sell it to HBO? Better bet is a YouTube appearance I suppose. And that brings me to Web 2-enabled disruptive consumer behavior.
Interesting discussion at breakfast. Who do banks compete with at a consumer level? In this age of social networking, the answer is not readily apparent. Here are a few things to think about.
Traditional competition: Other Banks and FS Providers
Banks fought for a slice of the consumer pie (deposits, loans, other services) via better branch placement, ATM locations, convenience, superior product pricing, etc. Do consumers still shop that way? I suppose... but ask your teenager (a.k.a. next generation of financial services consumer) how they decide what and where to buy.
The missed wave: Non Bank Financial Players
No, I'm not talking about the credit card companies (but ignore this scenario at your peril). I'm talking about that dreaded six letter company, PayPal, now owned by that happy and highly profitable four letter company, eBay. The banks had their chance to own PayPal and they took a pass. Now what happens to the remittance business? It goes to the low cost provider of a "trusted" payments service. Case in point: two weeks ago I had a chance to go skiing outside Zurich, but my credit card would not work so I asked a friend to pay for my lift ticket. I reimbursed him in Euros (he lives in Germany) for the Swiss Franc-based lift ticket via my credit card-linked US dollar PayPal account. No muss, no fuss. Think about that Mr. Banker... By the way, lift tickets in Switzerland are much cheaper than in the US.
The next wave: Telco's
What's the most ubiquitous consumer device? Yup, the cell phone. And who manages your cell phone account - the carriers. With the advent of Near Field Communications and related wireless technologies, why not be able to use your phone for Over The Air (OTA) provisioning of an e-wallet? It's happening in Asia and parts of Europe today and will be coming soon to the rest of the world. By the way, with the billing sophistication of the telco's, I am more than confident that they'll figure out how to manage the netting process that banks use today, say in the RTGS process. The settlement mechanism for wireless roaming looks interestingly like the netting process banks employ.
The X (or Y) factor wave: New Media Companies
Yup, it's the nightmare scenario. I know why Google and Yahoo (and Microsoft) have been in the search business. I just wasn't sure about the longer range plan. Ask a question, get an answer. Ask questions and get the right (or a desirable) answer often enough and you tend to build up trust with the provider of that answer. All those questions mean consumer eyeballs which translates to a trusted community. Community equals a market segment (or many of them) with highly targeted and specific buyer profiles, a marketer's dream. Google bids for wireless spectrum. GooglePay is launched. The Android phone appears. Okay, too far fetched? Try this scenario instead.
Proximity marketing (SMS message to your mobile device while you're walking through the airport, sponsored by Google) leads to personalized product promotion (24 hour travel insurance underwritten by Google-vetted insurance carrier) with real time pricing ($1 policy for traveling anywhere in the US) completed via mobile micropayments utility (charged to your cell phone account, just like the SMS message, and settled via GooglePay). Monetization of trusted community is now complete. There's a bank in there somewhere, but I'm just not sure they are getting their fair share... Or perhaps this one is too far fetched as well?
Hey Iron Maiden guys, when will you be streaming your music over the web and allowing me to listen via my home wireless music system or other wireless consumer device, and paying for it via my mobile e-wallet? So there you have it: the convergence of finance, telcos, and new media via Web 2-enabled disruptive consumer behavior. Now off to see if we made it onto YouTube yet.
Posted at
03:27PM Feb 28, 2008
by lscott97 in Sun |
Great thoughts Larry. And great tie-in at the end with Maiden(one of my fave bands from the 80s). The point you brought up with paying over the phone for flight insurance is spot on.. I'd buy it every time.
Perhaps the banks will have another chance when we start beta testing the new neural implant technology.
Banking by Brain? ;-)
Posted by Tommy M on February 28, 2008 at 04:22 PM EST #