Category: business

The future of retail banking

Here is a short deck of slides I made to describe a possible future for retail banking. Saying “future” is a bit of a stretch, as most of these services are available today. They just do not work together seamlessly, and are available in the US only.

The future of retail banking:

  • My bank statements will look like a twitter timeline, an interface that works both on mobiles and desktop computers.
  • I can add metadata to each transaction, upload pictures or files, the name of the other part of the transaction is clickable and I can see a history of my relationship with them.
  • I can share my accounts entirely or only selected transactions by circles, and decide what is available to whom.
  • I can connect a third party system to visualize my assets. I can filter and analyze my expenses for all my accounts in one place, including online assets like Facebook credits or miles.
  • I can see my cashflow updated in real time, taking into account recurring expenses or upcoming incomes like salaries.
  • Algorithms help me make decisions on assets allocation, and reach savings goals.
  • I can interact with my account manager or family members directly inside the application, exchanging messages and files securely.
  • My credit rating takes into account my online reputation (ebay seller ratings, peerindex ranking, etc) and I can get immediate quotes on services like insurance or credit.
  • I can connect to third party services to accept payments in local or foreign currencies.
  • I can follow what other people are trading, and let others manage my portfolio by copying their trades.
  • The data I generate is analyzed to create recommendations and insights. I get custom offers based on my past purchases directly in my ebanking.
  • I can interact with my bank using any medium I want.
  • I can use alternative and local currencies to transact on my accounts.

 

Disclaimer: some of these startups received investment from Anthemis, a company I work for as a venture partner.

How much more money could Google be making?

Via the excellent The Browser, an article from Economist.com wondering “how to quantify the gains that the internet has brought to consumers“. The article tries to measure the unmeasurable, putting a price on the leisure time spent on the internet, or on the savings consumers make by having access to immediate information.

One thing I found particularly interesting was a McKinsey study that “asked 3360 consumers in six countries what they would pay for 16 internet services that are now largely financed by ads.”

And the answer is? “On average, households would pay $50 a month each for services they now get free.” If this is true, we are talking a LOT of money left on the table by Google, Facebook, etc.

These companies are not stupid. They have good reasons not to charge users:

  • Ads can only be displayed to users not paying for the service
  • Profiling of users through data mining is worth a lot of money (if you need proof of this, click here to read how Facebook likes reveal your gender, race, sexual orientation, etc). Data can be sold, ads efficiency can be improved.
  • Free services don’t require bulletproof user support, and therefore cost less money to maintain.
  • Most services are available free from multiple companies, if one starts to charge users will flee to the others
  • By charging users, you turn off a lot of people and reach is vastly diminished

But the landscape is changing. Let’s revisit the above in 2013:

  • Several services now have a premium offering, where you pay not to see ads. These coexist well with free offerings.
  • Data mining can be made on both free and paying users. Google has a critical mass of users, so even with a decrease in quantity, their mining will still be relevant.
  • Services like Google search or Gmail are technologically mature enough that they would require little to no user support.
  • With users building a long history with web services (I have ten years worth of archive in my Gmail), and Google search still way ahead of its competitors in terms of relevance, switching is not really an option.
  • Users are slowly but surely getting used to pay, for media (NYT, FT), small services (Harvest, Evernote), apps, music.

Considering the above, I wouldn’t be surprised if in the mid term some free web services start to charge their users. And I don’t expect users to necessarily be outraged about that. Seriously, I would find it normal to pay for Google. I’m ready for it. I just would like to know a bit ahead of time if they have such a plan, to buy a few stocks ;)

How R&D can become a profit center

News today is that Ikea “has teamed up with Marriott International to develop a chain of hotels in the same affordable, compact, and stylish vein as the furniture store”. Also happening in Europe, Ford is announcing a car sharing service in Germany.

Increasingly, interactions between brands and clients are not limited to the controlled atmosphere of stores. They happen in many other places, via friends, at work, through countless channels. It becomes strategic for companies to get involved in this “outside world”, and influence those experience clients and prospects will get with the products.

There is also a lot of value in seeing products in situation, gathering feedback on current and future usages in the process. Just like some CEOs like to take customer service calls every once in a while, the hotels will make the boundaries that separate product makers and product users disappear.


Fans have already explored a new business for IKEA: clothing!

What we have here is a mix of lab (co-creation, feedback on products), showcase, and service. It is like R&D mixed with marketing mixed with a business that generates money.

And this is where it becomes interesting. Are we witnessing the birth of R&D 2.0, which instead of being a cost center generates money? Are services the missing piece, the one that makes co-creation profitable? It looks like it, and this is a very key development, one that could completely change the way research and development is approached by companies around the world.

This is a forward thinking move by Ikea and Ford, one that will surely be replicated in the near future. Now the challenge is to make sure clients don’t notice the fact that the average IKEA’s bed planned obsolescence is kicking in after only a few years…

gapingvoid

The business of office art

Hugh Macleod is one of the world’s best cartoonist (a good example above), and instead of exercising his craft for a newspaper, he is tracing his own road, from creating global microbrands to blogging to his newest venture into office art.

Most art is simply decorative. It sits passively on walls. In contrast, gapingvoid  art actively changes office environments. It amplifies and broadcasts beliefs, and transmits a dynamic worldview. As a result, Gapingvoid art is hung on the walls
of hundreds of companies large and small

Here is a great example of someone following his passion, attracting lots of attention through an undeniable talent, and slowly but surely building a successful business model out of that (passion + attention). Hugh is going where his constant conversations take him, he follows the community he has patiently built for the past 10 years and listens to their needs. This might very well be the business model of the 2.0 era, one that can make sense of any situation as long as there is talent and perseverance. I see more and more people that are ultra specialized, hyper focused, and patient, who end up making money from what they love the most. This is great news for many. As Hugh would put it, “Rock on”!

Disclaimer: Hugh is a friend and was a speaker at Lift06 (video)

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Hacking Finance

One of the organizations I joined this year is Anthemis Group where I am now a venture partner, to help Sean Park and his team accomplish an ambitious goal: build a financial services group for the 21st century. Structured around two service companies (Anthemis Edge and FT advisors) and an investment arm, Anthemis is growing into an ecosystem gathering entrepreneurs and doers who are reinventing fields like payments, banking, risk management or financial inclusion. Check the video below for more on Anthemis, and join the reinvention!

A marketplace for weddings

Intriguing business model of the day: Bridal brokerage “purchases cancelled weddings and resells them to new couples”.

Over 250,000 weddings are called off every year. We purchase cancelled weddings and resell them to new couples.

Sellers recover deposits and upfront costs hassle-free.
Venues and providers enjoy uninterrupted business as usual.
Buyers find beautiful, pre-planned weddings at a fraction of the time.

www.bridalbrokerage.com

Social technologies demand a cultural transformation

One final post on the Unlocking value and productivity through social technologies report by the McKinsey Global Institute. This one will be very useful for anyone engaged in deploying social technologies – internal or external – in a corporate context.

First, MGI summarizes the different ways social technologies can add value across enterprises. Co-creation, analytics, marketing, sales, CRM, you find it all in one slide:

Then there is the cultural aspect that every social intrapreneur will face in a large company. If the above graph represents the “possibilities”, the one below shows the “hurdles”.

Report homepage | Executive summary | Full report

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Can remote work close the gender gap?

There is a sometimes too long but still interesting article on The Atlantic, detailing the obstacles that women face to “have it all”, i. e. combine family life and career. The 1200 comments the story has show how sensitive of an issue this is, the author explaining that the feminist credo women were raised with has come to simply “airbrush reality”.

One of the problems the author mentions is the dictature of presence, and how being physically at the office is a major challenge as school and work times are still not matching. In Switzerland for example, younger kids will typically be at school between 8 and 11:30, then from 13:30 to… 15:30. Good luck with having a fulltime job!

The article then makes a case for remote work, and explains some of the hurdles faced by those who want to work from home, most notably the mentalities as teleconferencing is “likely to engender guilt among those calling in, and possibly resentment among those in the room”. As usual technologies enable new possibilities that human norms have a hard time adapting to.

I found this passage particularly interesting, as it explains some of the things we gain from working remotely, namely “distance” and “quiet”:

One real-world example comes from the British Foreign and Commonwealth Office, a place most people are more likely to associate with distinguished gentlemen in pinstripes than with progressive thinking about work-family balance. Like so many other places, however, the FCO worries about losing talented members of two-career couples around the world, particularly women. So it recently changed its basic policy from a default rule that jobs have to be done on-site to one that assumes that some jobs might be done remotely, and invites workers to make the case for remote work. Kara Owen, a career foreign-service officer who was the FCO’s diversity director [...] writes, “I have found the distance and quiet to be a real advantage in a strategic role, providing I have put in the investment up front to develop very strong personal relationships with the game changers.”

Link

This is an interesting perspective, as making better decisions and having time to think are possibly the two most important factors for a manager. Here we see another recurring conclusion that the observer of society I am comes to again and again: that technological and non-technological solutions do not compete but complement each other. You can work remotely if you “develop very strong personal relationships” while face to face. The solution is not to either work on site or work remotely, but a smart combination of both.

How employee productivity declines as companies get bigger

As an old Mashable post resurfaced on my Faceboook, showing the net profit per employee for the largest tech companies, I searched a bit on the question of employee productivity vs company size. I found this on cybaea, an article studying this precise point for UK companies quoted on the FTSE. The findings are quite striking:

We have previously found that when you treble the number of workers, you halve their individual productivity which is mildly scary. [...]

The power law still broadly holds. In a large company, the productivity of the individual employee is only ¼ of the productivity in a company with one-tenth of the number of workers.

Link

And here is the graph: