Taking the "Bank" out of "Banking": How the Steve Jobs Decade Has Changed Finance

by Ron Daly

Brett King over at Bank 2.0 posted an article titled "How Steve Jobs Killed the Branch". There's been a lot of talk recently about Steve Jobs stepping down as the CEO of Apple and moving into a more private role in the company. Tim Cook has taken Jobs' place as CEO and the black-turtlenecked dynamo has quietly stepped aside, due to his health concerns. The news of this change sent a shockwave through the Internet as Apple fans and tech fans alike shared their shock and their appreciation for a man that has many times over beaten the odds (go read about Steve Jobs' impact and listen to his 2005 commencement speech here. Very good stuff.)

Brett's article focuses on one important aspect of Jobs' legacy. From the post - 

This is not the sole legacy of Steve Jobs and the team at Apple, but when we look back on banking in 10-20 years time when branches have disappeared, we will attribute the destruction of the traditional value chain of banking to the death of the ‘store’. Not all stores are destroyed, of course, but where you have goods or services that can be easily digitized or where distribution does not absolutely require physicality, then the value chain is disrupted. The two big upsets in this evolution of the store were really Amazon’s destruction of the book store, and iTunes destruction of video and music stores.

I think Brett has a point there. The Kindle really did a number on bookstores and paper books alike (the Borders down the street from us is going, going...). The iPod destroyed all the Tower Records and Sam Goody's of the world because, finally, you didn't need a twenty-disc CD changer in your car - you just needed a little rectangle with a wheel. And why? 

Because paperbacks and hardcovers were just a means of distributing the words in a book. CDs and Casettes were just a way to store the music until it hit your ears. The medium wasn't more than the message. In some cases, it was much, MUCH less. 

As technology has advanced, our dependence on cash and checks has diminished. Debit and credit are pushing out cash and NFC is threatening cards - we'll keep making strides away from the physical aspects of money management until branches are almost obsolete. Why? Because money's not a physical thing anymore. At least, it doesn't have to be. And you don't need a bank to do all your banking.

When you can:

• Open an account online
• Deposit remotely online
• Apply for a loan AND get approved online
• Resolve NSFs and low-fund situations online
• Transfer money between accounts online 
• Budget online
• Buy online

...why go to a branch to get things done? 

Steve Jobs didn't exactly kill the branch. But he certainly didn't stop the bleeding. 

Are you Delivering Financial Telephone Books and Newspapers?

by Ron Daly

Some things just never change, but should. Two examples.

My family and I returned home this week from our west coast vacation. As we turned into the driveway my daughter spotted a large plastic package with items inside leaning on the mailbox. Being nine, she naturally assumes that every package delivered to the house is something for her. As I exited the car I saw her struggling to carry the package with two large yellow books and one large white book inside. Dropping the 1,000 page books at my feet she asked “Dad, what are these?”

To which I replied, "Those are telephone books, sometimes referred to as 'yellow pages'."

If you have a nine-year-old you know there are even more questions to follow...I believe it went something along these lines.

Q: What are they used for?

A: People use them to look up up the telephone number of someone they want to call or a businesses they might want to hire.

Q: You mean they don’t Google them, look them up in their Outlook contacts or call 411?

A: Guess there are still some folks out there that need them.

Q: Did you pay for these books or ask for them?

A: No, dear.

Looking down the street at all the bags of books lining the driveways as far as the eye could see–

Q: Why did they print all these books, waste all this paper and leave them on everyone’s driveway if no one pays for them or uses them?

A: Guess it’s a conspiracy.

Thumbing through the A-L Yellow Pages she stopped in the “D” section

Q: Dad, why isn’t DigitalMailer listed in the Yellow pages?

A: Well, we are a digital communication company and it doesn’t make sense to spend money this way. Besides, any person that has to use the yellow pages to find us is probably not ready for the products and services we offer.

Q: What good is this ad on this page? It’s in black on yellow paper. There are no moving images and nothing interesting about it. I can’t click the website address to learn more and I can’t hit the phone number and have my cell phone dial the call for me.

A: Not everything keeps up with the changes going on. This is just an old-fashioned way people use to find information.

Her final comment as she walked the books directly over to our recycling bin and dropped them in… "What a waste of good trees."

One more example to share, from a conversation we had with a lovely lady I’ll refer to as “Marge” at the large national newspaper in our area. We decided rather than to stop the Sunday paper while we were gone, we’d just cancel it altogether. After waiting in the call queue for a while Marge was lucky enough to get our call. Here goes:

Ron – We’d like to cancel our Sunday paper subscription.

Marge – Why?

Ron – We get our news from other sources, we never read it and we wind up just recycling it each week.

Marge – What if we give you weekdays free?

Ron – (Thinking to myself – OK Marge, I don’t read Sunday and now you want to give me six more days not to read and recycle?) No thanks, we just want to save the $15 per month by cutting out something we don’t need.

Marge – You know, if you use just three coupons per week from the Sunday coupon section the paper will pay for itself with the money you save.

Ron – (Thinking to myself – Ok Marge, I’m not a “35-cents-off-of-ground-round-cut-that-coupon-out” kinda guy, but I do like that song. Besides that, my yellow and white flowered coupon organizer was retired about two weeks prior to my marriage, never to be resurrected again.) No thanks, we can get coupons and discount codes online for most of the stuff we need.

Marge – What if we just charge you 59 cents each week of the Sunday paper? Will you stay?

Ron – (Now I’m starting to boil realizing that I’ve been paying $15 per month for at least ten years for something that Marge is now selling to me for just over $2.40 per month) No thanks, just cancel the subscription.

I can remember which one of us hung up on the other, but the paper has stopped showing up.

Some things just never change, but should. So, my question is… Are you still delivering financial telephone books and newspapers? Are you relying on old systems and technology to reach customers faster and in the communication channel they want? Have you looked at the organization to make sure that you are not? Do you have any idea where financial services are going on the web and in the branches? Is your Virtual Branch even open?

We’ve launched an eStrategy presentation on the future of financial services that is perfect for senior management and Boards of Directors. Contact me at rdaly@digitalmailer.com for more information.

Happy Birthday, Mobile Phones! What Do You Get for the Phone That Has Everything?

by Ron Daly 

This month marks the 38th anniversary of the first mobile phone call. Martin Cooper, a Motorola employee (below, photo via thenextweb.com), stood on the street with a gigantic (by today's standards) cellular phone and had a conversation. And in 38 years, we've come a long, LONG way. 

The phones got smaller, they got more functionality, and they went from being a convenience to a "necessity". I'm not one of those people that sleeps with his phone under his pillow at night, but my iPhone is my GPS, my on-the-go email inbox, my research assistant and, occasionally, my phone. It's a businessperson's tool, and the thought of going back to waiting for all my "get it done" information is a little frightening. I'm not alone, obviously. From Kottke: 

Once someone has an iPhone, it is going to be tough to persuade them that they also need to spend money on and carry around a dedicated GPS device, point-and-shoot camera, or tape recorder unless they have an unusual need. But the real problem for other device manufacturers is that all of these iPhone features -- particularly the always-on internet connectivity; the email, HTTP, and SMS capabilities; and the GPS/location features -- can work in concert with each other to actually make better versions of the devices listed above. Like a GPS that automatically takes photos of where you are and posts them to a Flickr gallery or a video camera that'll email videos to your mom or a portable gaming machine with access to thousands of free games over your mobile's phone network. We tend to forget that the iPhone is still from the future in a way that most of the other devices on the list above aren't. It will take time for device makers to make up that difference.

When it comes to credit unions, mobile might be one of the next big mountains to climb. Many CUs aren't running a fully capable website right now...how can they be expected to come up with a useful mobile app for a smart phone? And more importantly - how important will that be in a member's decision to stay or a potential member's decision to join? 

Some very insightful information on mobile apps and credit unions: