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Archive for the ‘Crazy world of banking’ Category

Latest trend in authentication works with a heartbeat

Wednesday, March 18th, 2015

Well publicized, recent security breaches at giant retailers (Home Depot) and financial institutions (JP Morgan Chase and the European Central Bank (ECB)), have caused waves of panic about the security and privacy of sensitive (financial) data. As this threat seems to be ever expanding and detection of security attacks gets more and more problematic, the Canadian startup Bionym has developed a biometric alternative to passwords, PINs, or other time-consuming security details. The Nymi wristband leaves other biometric authentication methods like Apple Pay’s touch ID fingerprint technology for contactless payment behind. It could be used for numerous applications like unlocking devices, remembering passwords, authorizing transactions, or controlling connected devices. The bracelet has an integrated electrocardiogram (ECG) sensor that enables measuring a user’s heartbeats (the electrical activity one’s heart generates), which is unique to every person. Nymi uses the heartbeat signature to authenticate and confirm the user’s identity. There are three levels of security involved: the heart ID, the armband itself and an authorized authentication device like a smartphone (via Bluetooth and a matching app for Windows, Mac, iOS and Android). The user must wear the bracelet on the wrist and touch its top sensor with the opposite hand for it to work.

UK’s Halifax bank’s decision to test Bionym’s technology to allow its clients to make online banking operations in an easy and secure manner is an exemplary initiative. It shows that biometric identification is the future for online banking security. Over the next three years, we expect many innovations in this space – just like Nymi.


The changing role of wealth advisors

Friday, January 16th, 2015

Remember Inspector Gadget, the detective who solves cases with the help of high-tech devices? Totally futuristic in early 80s, the concept is easily applicable to today’s financial advisors. While particularly the advisory services for the mass-affluent experience a severe threat from the booming robo-advisor industry, we forecast a pressing need for HNW clients’ advisors to redefine their role, too.

In Private Banking, advisors or relationship managers as they are called there, will not disappear as the main interface to the high-net-worth client. Digital innovations like robo-advisory tools, mobile apps, video conferencing, or social media dashboards will support and improve the advisor’s work. Just like her cartoon sibling, the new advisor is combining her human benefits (the emotional intelligence) with the technological benefits (the data, analytical and visualizing part). The new advisor will be – like Inspector Gadget - inspired by Cyborgs, bringing together the best of human capabilities and machine intelligence.

The new advisor offers to her clients support and coaching across all channels in real time in an increasing personalized way. Big data tools help her to identify relevant information to recommend the right products at the right time. Social media compliance tools deliver the compliant framework for advanced client communication, and sophisticated video conferencing tools allow for flexible advice anywhere and anytime. Thanks to dedicated mobile apps, client meetings improve in terms of quality, engagement and efficiency.

Watch out for our upcoming report on digital interfaces for financial advisors this spring!


Top-10 Tech Trends in Wealth Management for 2015

Tuesday, December 23rd, 2014

2014 - what a year! Digitization has only started to disrupt the financial industry through innovations like robo-advisors. Mobile apps for various financial areas have really taken off in 2014: wealth management, financial advisors, and fund management, are catching up fast on the mobile battle field. And social media is quickly becoming the most important customer support channel for banks.

But digital change in the wealth management industry is not slowing down. Here are our top-10 trends for 2015:

10.) Personalized marketing based on big data: Social content mining tools deliver a clear client profile, making it easy and convenient to address wealthy clients’ dedicated needs.

9.) Margins under pressure: Wealth managers must be prepared for an increasing pressure on their margins due to the emergence of automated investment/advisory services and the emergence of commission free brokerage.

8.) Messaging becomes ever more important: Particularly the high-net-worth clients expect to be able to reach their advisors anytime and everywhere they are. Instant messaging services, video chat, social media, and co-browsing are gaining momentum.

7.) Advisors become client communication managers: Thanks to client portals and social media dashboards, financial advisors are now able to manage and monitor their client communication through one single tool, thereby increasing efficiency and productivity.

6.) Security remains crucial: Comprehensive security and privacy protection stay on top of wealthy clients’ wish list with regard to banks’ and wealth managers’ digital offerings.

5.) Advisors become coaches: Through content collaboration tools, financial advisors are able to add value to their clients as real sources of expertise and deliver high quality educational material.

4.) Social finance as a new definition of charity: Banks are increasingly recognizing the benefits – social as well as financial – of social finance as opposed to donating to charities by highlighting the investment character of social finance projects.

3.) Social media become most important channel for customer support: Mainly Twitter and Facebook serve increasingly as a public interface to deliver support to clients – first in the mass affluent and retail segments but later also for the HNWI.

2.) Mobile touch-points will start to see, feel, and navigate for the client: As more and more sensors are added to mobile phones plus new devices are getting ready for apps like smart watches or glasses, mobile apps will use contextual data to deliver value to the client.

1.) Automated investment advice is becoming part of traditional wealth managers: Robo advisor start-ups have made a splash in 2014. But 2015 will be the year of established wealth management firms implementing automated investment advice as part of their own business model.

The whole MyPrivateBanking team wishes our clients and readers wonderful holidays and a happy, successful new year 2015!


Why falling stocks might make your ears ring

Thursday, December 4th, 2014

The question is not if there will be wearable banking but rather when it will arrive in the mass market. While wearable activity trackers already observe every step of an increasing number of people, the use of wearable mobile devices (other than smart phones or tablets) for financial matters is still in its early stages. But there are a few financial services apps already out there for Google Glass and smart watches. Just check here, here and here. These are the early movers but there is no doubt that others will follow soon.

It’s not clear yet which apps and which devices will ultimately be successful: It could be devices like Google Glass, smart watches, or even bracelets for taking the role of contactless payment tools. Even more far-fetched ideas might ultimately come to the market. Why not a partnership between a big fashion house and a stock broker. Earrings, which discretely start to vibrate when stocks fall below a certain level certainly could find their buyers. Therefore, continuous research among its client base, rapid prototyping and closely watching its competition should be on every bank’s critical path to their next breakthrough mobile app.


Social networks offering payment solution: What will banks do?

Wednesday, November 19th, 2014

News about the release of Snapcash surely came as no surprise to us at Myprivatebanking Research. The integration of social media and payment systems is successfully growing and clearly challenging traditional payment players like banks, credit card providers, and older online providers like PayPal. Whereas rumors have made rounds for the last months about Facebook’s plans for a mobile payments system using its Facebook Messenger iPhone app, another popular social messenger provider has stolen the thunder: Snapcash, the product of the recent collaboration between Snapchat and Square Cash (a mobile payments company headed by Twitter co-founder Jack Dorsey), is the latest mobile payment option that allows users to send money to friends via the app by simply typing dollar amounts into new “Snapcash” messages. For now, Snapcash is available to Snapchatters in the United States who have a debit card and are 18 or older.

Trying to keep up the pace with consumers’ increasing demand for highly innovative and convenient products, successful offers like Snapcash or Applepay challenge the banking industry to come up with similar or better solutions. It is true that banks must deal with stricter regulatory guidelines but they should also be aware that consumers have more choices than ever and won’t wait for banks to catch up. But banks – across the globe – seem not to have a strategic response. Will they get frozen out of the online payments markets like music labels have failed to conquer the online music business and traditional book stores never were able to challenge Amazon in online book selling?

Very few banks have already invested in convenient mobile payment solutions aimed at improving the customer experience. Barclays’ Pingit app is one exception. Users can send and receive money via the app without sharing bank account details and even send gifts to friends. But Barclays is the exception and not the rule in the banking industry. Will they finally give up this market to the tech players?


How Spielberg’s AI is becoming real already

Friday, August 29th, 2014

What began as a lunatic idea years ago is entering our pockets today. Cyborgs, intelligent assistants, robots – they have many names but research labs and start-ups all over the world are working on the same idea: combining human and artificial components to end up with efficiency.

These days you cannot surf the internet without coming across several articles on artificial intelligence. This one really caught my attention as it reveals what is going on behind the doors of the labs of Viv, a start-up led by the inventors of Siri.

The crux on which they are currently working is the linking of multiple queries based on a cloud system working like a ‘global brain’. The objective of this kind of knowledge net is that the intelligent assistant should be able to actively learn from the incoming queries and even become able to predict what its user needs next.

Just try to imagine the impact this revolution will have on the finance industry – for instance, an investor could ask his smartphone “How can I build a portfolio with lowest possible fees limiting my expected maximum loss to 10% per year?” instead of meeting with his advisor. Along with an increasingly self-determined client, these changes draw a dire picture of the industry’s future and it will be up to the wealth managers and banks to find new ways for becoming indispensable.


3 Key-Take-Aways from the M-days in Frankfurt

Wednesday, May 14th, 2014

1. Innovative mobile payment solutions lack backing of strong trustworthy names. I just listened to an interesting panel discussion about mobile payments. There are now tons of interesting and great innovative solutions (examples are Apple’s iBeacon based and  NFC based solutions from various innovative start-ups like barcoo or netsize) but they are still lacking the backing of the big financial players. And this is the only way the consumer will accept new payment solutions. So start-ups - get the big banks and financial players involved!

2. Experience first: customers download apps for testing them - when they don’t fulfill customer’s expectations, the apps will be dropped. The implication here is simple: first, attract your clients by an excellent app description in the app store, screenshots and a strong marketing strategy and second, bind your customers through cool features, really helpful tools and a great user experience. This sounds simple - but many banks fail on it as our latest report testifies.

3. Mobile websites and responsive design gain momentum: the development of native apps is expensive and time-consuming. Testing is required as well as integrating feedback from the users. The advantages of responsive design are numerous. Besides enhancing SEO and ensuring a unified look and feel across multiple devices, there is no hurdle for potential customers to use the mobile websites of a bank since no apps need to be downloaded. It’s easy and flexible without requiring huge investments. Will browser based mobile solutions beat native apps in the short run? No, definitely not. Will it be a serious option in the longer run? Definitely yes, particularly for mobile solutions that do not require great design and all the bells & whistles of an expensive native app.


JP Morgan’s Dimon in Last Ditch Fight to Save Undeserved Bonus

Monday, September 12th, 2011

Jamie Dimon, the CEO of  JP Morgan Chase considers the Basel III accords as “anti-American”. He suggests that the US should pull out of these international agreements. Basel III requires bank to hold more equity. The biggest banks - like JP Morgan - would be required to hold 9.5% of their risk weighted assets as so-called core-tier-1-capital.

Felix Salmon gives a clear answer to Dimon. Nothing to be added…


Labor Unions and Wealth Managers Team Up

Thursday, January 20th, 2011

The German minister for consumer protection has announced to send under cover investigators to banks’  wealth advisors to check whether their advice is following the rules and to identify possible weak spots. This latest government measure to protect consumers comes after repeated reports of banks who are  often pushing products with heavy commissions (kick-backs) into the portfolios of their private clients.

All this has lead now to a coalition between wealth managers and the biggest German service employees union. According to reports by the SPIEGEL the union has already collected 60′000 signatures against the new measure to protect bank clients. The report is here (German only).

I think this is great: greedy bankers and leftist unions unite to keep exploiting the consumer. If only Karl Marx knew about this, he would roll over in his grave…


“It will never be about you and us…

Tuesday, August 24th, 2010

…It will always be about your money” . Private bank Hyposwiss is running an advertisement making fun of the UBS claim “You and Us” . Unfortunately, UBS has just changed the ad claim to “We Will Not Rest” making the Hyposwiss joke look a bit yesterday…