Category Archives: Personal Finance

Impact of free data on bank’s model (Part 2)

What is the impact?

Banks have seen a decrease of their customers’ engagement. The role of bank branches has diminished with the introduction of intelligent ATMs and Internet portals. And while they have increased their positioning in terms of mobile and internet banking, cross selling may become more difficult in this new environment.

With the increasing use of services such as Mint.com, banks will also see a decrease in interactions between their customers and their Internet and mobile platforms. Why use several Web sites when you can see all of your assets on a single graph and track down in details all your banking fees? When it even warns you of credit card payments to be made? For example, Mint.com tells you every time your bank takes fees on your account. Where they once were lost in statements in the past, they are now clearly brought to your attention.

Additionally, banks will face tougher competition through the comparison engines offered by these new platforms. Why consider an offer by your main bank when the “Ways to Save” page on Mint shows you offers from 10 banks (and calculates the costs and saving involved)? Customers might lose their connection with their banks and switch between products more easily because they will be empowered to compare them based on their needs. On one side, it could reduce the costs for of customer care for banks, as they would need to invest less money per customers on their Web sites, call centers and branches. For some population of users, clear gain will be made. But banks will also face tougher competition on pricing and find cross selling much more difficult to perform. Client loyalty will also be negatively affected.

Continue reading Impact of free data on bank’s model (Part 2)

Impact of free data on bank’s model (Part 1)

Banks should look at all what’s happening to mainstream media to see their future

Information is now a product of mass consumption

Whether it is considered a good thing or not, it is a fact that the media industry is undergoing one of the most important transformation since its creation. New technologies and their associated behavioral changes have completely changed the way media and information are consumed. One of the key changes is that content has been freed from its media support. Through RSS, Twitter or blogs, an article can now be found and read outside of the newspaper format, as well as its affiliated Web format. New actors have found niches, either by aggregating the maximum number of news information (roughly the model followed by Web sites such as the Huffington Post), “curating” it (roughly the model followed by Web sites such as The Daily Beast) or letting users define their own sources (Google Reader for example). Users have found a new way to consume and compare information. Continue reading Impact of free data on bank’s model (Part 1)