“A h(API) surge: It’s the millennials MOAT”

Difference-in-differences

Jogging our memory to school days, we are all aware of the ‘difference in differences’ Causal 101 approach used predominantly in econometrics and qualitative research.

This article is aimed at addressing the pre/post effect of being a ‘co-creator’ and not just a ‘consumer’ in the age of open banking.

From consumption economy to co-creation economy through APIs

More often, we as customers are offered a series of completed products that manufacturers or service providers think we might need and use.

But history has it that, what excites us as manufacturers often doesn’t convert into mass adoption and there are quite a few examples for the same. Visit the Google Cemetery here

Co-creators First. Consumers Next

As we move forward in this digital era, with APIs the consumption of digital services is edging more towards “CO-CREATION first” and “CONSUMPTION next” which redefines the role that customers play.

FIs as Relationship Binders

If you think about it, banks operate as a ‘relationship binder’ between two parties across their entire financial lives.

‘Millennials’ are the first mobile native generation to have used it for research, experiment and conversion. Traditional approach to acquire and engage these set of customers have been tried and tested with minimal uplift.

The only way to reach these set of customers is that the banks start trusting them and provide them with the tools to co-create and dismantle through APIs.

Simplified understanding of financial products

Financial products being high touch in nature is one of the reason why customers resort to friends, family etc. when it comes to choosing and managing investment products.

Breathtakingly Broad and Microscopically Niche Product Offerings

With significant progress in areas of AI and open banking we are looking at a not too distant future of having breathtakingly broad and microscopically niche product offerings through and for “co-inventors” aka “consumers”.

Revisiting First Principles of Banking

The opportunity lies in revisiting the first principles,

1. Time has value and inflation adversely affects value
2. Risk is unavoidable and requires compensation.
3. Information is the basis for decision making
4. Markets set prices and allocate resources
5. Stability

Through the lens of open banking, the burden of controlling consumers’ finances is removed through product differentiation, visceral interactions, contextual awareness and creation of new markets through APIs.

A not so ‘tense’ Future

Soon, we hope consumers will be able to perform dynamic banking as well as non-banking from multiple service providers of choice or manufacture their own investment products as co-creators and offer it for the FIs to attest and promote.

The key to a not so ‘tense’ future lies wherein both customers and banks are being able to trust each other and banks step-up their role as ‘relationship binders’ with ‘co-creators’ first and ‘consumers’ next approach.

Dilip Krishnan

#TheDigitalAmaze

Twitter : @krishdilip

More on https://medium.com/@krishdilip

http://www.dilipkrishnan.com/blog.html

Time, Transparency and Trust.

“A touch of certainty in the age of Liquid Modernity”

Most common corporate buzzwords these days are re-invent, re-engineer, recycle, innovate, disrupt etc. to name a few.

If we observe closely, words and personal change are a part of ‘Liquid Modernity‘ psychological culture prevailing in this 21st century. But if we ask ourselves, can we ‘configure’ our lives basis only on change? The answer is no.

The idea of change needs to be coupled with that of stability and sustainability in order to be configurable in our daily lives.

Democritus of Abdera

A quick wiki search will help you to understand that ‘Democritus of Abdera’ is primarily remembered for his formulation of an ‘atomic theory’ of the universe as early as 8th century B.C.

The concept of ‘configuration’ can be found in our everyday lives from time immemorial (eg. Atoms, use of modular concepts in the automobile industry, configure your smartphone, laptop, e-commerce, FinTech etc.)

These modules become configurable and usable only if they are ‘stable’ and ‘sustainable’ through systematization, policies and procedures.

‘Transmogrify’ payments through Open Banking

A few days ago, I curiously participated in a twitter chat on #WPR18 (World Payments Report 2018) organised by @WFSULLIVAN3 and folks from @Capgemini @BNPParibas with an expert panel @BrettKing @BrianRoemmele @Leimer @PaymentGal @Rshevlin.

The format was more in the lines of question and answers (restricted to the 280 character limitation by @Twitter) and I was glad to see participatory, invigorating comments, stats which shows a bright outlook on the future of payments and banking as shared by fellow industry partners and thought leaders.

I am listing the questions posed by @WFSULLIVAN3 to further encourage discussion/collaboration in the comments section below,

Q1: How are emerging technologies transforming digital payments?

Q2: What is the impact of #BigTechs entering payments industry?

Q3: How is regulation impacting the enablement of new payments ecosystem?

Q4: Are traditional financial services firms subject to more regulation scrutiny than FinTechs and BigTechs?

Q5: How is open banking impacting the payments landscape for banks and incumbents?

Q6: How do you think incumbents have responded to the accelerated disruption in the payments industry?

Q7: What emerging technologies are pivotal for banks to orchestrate an innovation ecosystem?

Q8: What are the challenges hindering the accelerated development of payment ecosystems.

Q9: What value-added services do banks need to offer as a part of their ecosystems in collaboration with other industry stakeholders.

Q10: How should banks redefine their roles in the increasingly complex payments landscape.

Open Banking: Blurring the lines between traditional Banking Products

In today’s context, customers have started inviting FI’s to participate in their non-financial problems as they are demanding new ways to interact with money and that requires us to build intuitive experiences through right channels of interaction. While clients interact with money digitally, it could be intimidating which could be solved through ‘transparency’. This has visibly blurred the lines between traditional banking products or at least forced the FI’s to reimagine their offerings and leverage extended identity management.

‘Speed’ is of prime essence which can be achieved through technology but more importantly, it’s about how quickly and accurately we are able to help customers make ‘segmented’, split second, everyday decisions amongst the clutter of mature products and experiences.

‘Transparency’ augments customers’ choice by teaching them how to find a clear solution by engaging through channels of their preference.

A combination of Speed (time) and transparency helps to build trust collaboratively which could lead to more stable and sustainable ‘configurations’ achieved through systematisation, policies and procedures.

…Onwards to ‘Sustainable #OpenBanking’!

Dilip Krishnan

“…Collective intelligence of ‘Nothingness’!”

Phew..! What a week it has been.

One of the most powerful companies in the world has been brought down to its knees (quite literally) by losing market value close to $49.4billion ( let it sink in…$49.4Billion) in the past one week.

Come to think of it, has data privacy been a topic of contention always? A big YES.

Have we as consumers enjoyed the cheap thrills given by the tech giants via games / surveys? Yes again!

The big worry arises when our collective intelligence as mankind account to ‘nothingness‘ in our daily lives and also when we decide our future leaders.

Value of Human Experience and Up–keeping our minds‘ sovereignty:

In the tech ‘not so prominent’ era, we used to make our own decisions. Contrarily, in the tech (predominant) era, decisions are made for us through analytics. Your choices / decisions are restricted to algorithms, likes and shares of someone or a group of individuals.

Individuals’ decision making ability is a derivative of ones own experience gathered over a period of time and also a means to upkeep ones minds’ sovereignty.

eg. Google maps helps to navigate to any destination by a click of a button. In this process we’ve forgotten to find our own way through exploration and human interaction and we are not likely to go back taking that effort (processing information to make decisions).

A ‘VISIONLESS’ politics:

Am not trying to be cynical in here, but it’s important to record my observations in this article.

Politics is supposed to be and always has been a battleground of ‘Grand Visions‘ and the ‘future of humankind‘.

The ‘Grand Visions’ should and usually have been around making sense of technology to aid ‘industrial revolution’, ‘green revolution’, ‘healthcare development’ et al. Unfortunately our political system is not able to make sense of it, as technology is moving ‘too fast‘.

Instead of using the echo chambers created by tech giants to influence voter’s choice, politicians / to be future leaders should focus on making better sense of technology to create a better future and new opportunities through regulations and inclusive growth.

Clearly, the destructive potential of these echo chambers will eventually rob the voters’ mind of their sovereignty resulting in a weaker human race.

Power of ‘Myth’ aka ‘fake news’:

The rapid addition of people to the internet world (most of whom are impressionable) and are yet to develop the critical ability to distinguish between facts and lies. Add the influence of tools like whatsapp paves way to spread targeted propaganda’s like an untameable wildfire.

As the concept of ‘social myth’ rightly points out paraphrased by Mussolini, ‘men do not move mountains, it is only necessary to create an illusion that mountains move’. Myths enclose all the strongest inclination of people, party, class etc. independent of their historical reality (closer to home examples could be Gujarat riots, Babri masjid etc.)

Regressive Evolution:

All this leads to a fundamental question.

With billions of years of humankind’s existence, instigating a few primal instincts aka psychographics (read OCEAN) can STILL influence our behaviour and outcome thereafter?

I for once am not worried about data privacy, but rather on the naivety of mankind where we can be easily manipulated or influenced.

Shouldn’t our education and collective intelligence over the years catapult us beyond our primal instincts?

Such is ‘EVOLUTION..!’

Dilip Krishnan

#TheDigitalAmaze

Twitter : @krishdilip