TBT: Making it digital while keeping it personal


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This is from my post on March, 2014. I think it’s still germane.

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Making it digital while keeping it personal

Your clients want digital, but with a personal touch. Remember the rhetoric about banking as a relationship business? It still is. Preserving it while going digital only seems like a paradox. It needn’t be.

There is no reason you cannot infuse your online presence with personality. You did it back in the Dark Ages with print and broadcast media. You used strategy, tone, and design. Those basic tools haven’t gone away. They are as vital online as they ever were elsewhere. That means that besides making apps that are smooth, fast, intuitive, and functional, you must also design and word them so that they come across as uniquely you.

Here’s a good test. Mask the logos and names on your apps and on those of competitors. If the average client paying half attention cannot see any appreciable difference among them, you have work to do.

As for the relationship side, you have plenty of online tools. Though clients are no longer as willing as they once were to hop in the car and run to your office, they still want interaction with real people. It is precisely that problem that the likes of live chat and voice interaction were designed to solve.

Some companies are guilty of a serious error. They make live interaction options hard to find, burying them behind DIY options such as FAQs, help forums, and email options. The overriding message this sends is, “We’ll do anything we can to avoid interacting with you.” It is the antithesis of a relationship business. By all means, make DIY options plainly available, but make on-the-spot, direct contact via live chat and text equally so. Want to get really wild? Make your phone number easy to find.

Of course, this requires that the people at your end be knowledgable, empowered, and pleasant. Never underestimate that last one, namely, pleasant. Physicians have long known that a good beside manner reduces the threat of a malpractice action. Likewise, your clients will overlook “a multitude of sins” if they like the person they’re dealing with.

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It hasn’t been a great month for Libra (or for Mark Zuckerberg)

Libra in the balance

At least one astrology website says Libras are cooperative, diplomatic, gracious, fair-minded, and social. Like most zodiac descriptions, it’s broad enough so that just about anyone can say, “Yep, that’s me.” 

But the other Libra—Facebook’s recently announced cryptocurrency—seems to be garnering a less positive image.

Not that Facebook has given up hope. As of this writing, the Libra Association’s official Facebook page most recent entry positively states, “Libra is a cryptocurrency that will be available globally.” 

But that was posted on October 10, which, astute readers will no doubt observe, was nearly six weeks ago. A lot has changed since then. It began the very next day with the news that major Libra partners had bailed. This, from CNN, was typical: 

Facebook (FB) is now facing an exodus of companies from its Libra cryptocurrency effort. Mastercard (MA), eBay (EBAY), Visa (V) and Stripe … all confirmed on Friday that they would not be members of the governance organization for the Libra cryptocurrency developed by Facebook. PayPal said last week it would pull out of the organization. The firms were part of a group of more than two dozen nonprofits and companies originally listed as “founding members” of the Libra Association, which is intended to be an independent overseer of the cryptocurrency.

In an indisputable show of class, Libra co-creator David Marcus responded on the same day with this tweet:

Special thanks to @Visa and @Mastercard for sticking it out until the 11th hour. The pressure has been intense (understatement), and I respect their decision to wait until there’s regulatory clarity for @Libra_ to proceed, vs. the invoked threats (by many) on their biz.

Marcus followed up:

I would caution against reading the fate of Libra into this update. Of course, it’s not great news in the short term, but in a way it’s liberating. Stay tuned for more very soon. Change of this magnitude is hard. You know you’re on to something when so much pressure builds up.

On October 16, PYMTS.com reported on details Mastercard shared regarding its decision:

Mastercard said that cryptocurrencies need to give consumers protections that include privacy and security of both information and transactions. They also must provide a level playing field for everyone, Mastercard said. That would include merchants, mobile network operators and financial institutions. They must comply with all laws and regulations, and that includes money-laundering protections and operating within the economic structures of whatever country in which it trades. 

Mastercard’s statement is a master’s class in leaving unsaid, “We’re not so sure Libra meets those criteria.” It went on to express confidence in blockchain technology overall:

“We believe in the transformative power of blockchain. We hold the third-largest number of blockchain patents and patent applications, and from our provenance solution to commercial payments, our exploration of blockchain applications span our entire business ecosystem,” Mastercard said.

The following day—October 17—Finextra ran a story headlined “Fed governor warns of ‘core’ regulatory challenges facing Libra.”

Facebook’s Libra project will need to address core legal and regulatory challenges before it can facilitate a single payment, US Federal Reserve governor Lael Brainard has warned … Among the issues Libra needs to address, says the governor, are compliance with KYC rules; demonstration of consumer protections; and efforts to define the financial activities that the various players in the Libra ecosystem are conducting in order for jurisdictions to assess whether existing regulatory and enforcement mechanisms are adequate. More broadly, Brainard told her audience that global stablecoin projects such as Libra could challenge bank business models. “If consumers and businesses reduce their deposits at commercial banks in favor of stablecoins held in digital wallets, this could shrink banks’ sources of stable funding, as well as their visibility into transactions data, and thereby hinder banks’ ability to provide credit to businesses and households,” she suggested.

A week later, Facebook CEO Mark Zuckerberg endured one of many grillings before a Congressional subcommittee. Finextra reported:

Democratic Representative Nydia Velázquez stated that Facebook has a “credibility issue” which poses a problem to its attempt to enter financial services. “Mr Zuckerberg, we do not want to ‘break’ the international monetary system,” Velázquez said, referencing the Facebook founder’s motto, “Move fast and break things.”

On another matter, Zuckerberg’s later testimony defending the banning of “offensive” content while not fact-checking—indeed, while permitting—provably false political advertising hasn’t exactly moved Americans to come to his defense. 

So in many ways it hasn’t been a great month for Zuckerberg. On the other hand, he may find some consolation in being the fifth-richest person in the world.

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Banking on DST

There’s a reason we call it cuckoo.

There’s a reason we call it cuckoo.

Daylight Savings Time wreaks havoc on everyone, but it brings particular challenges to the banking industry.

If you happen to live in a place where it is now one hour earlier than it was at this time a little over a week ago, I hope you have recovered from this year’s wrapping up of the shock to your system known as Daylight Savings Time.

Seriously. David Gorsky, MD, an oncologist and contributor to the Science Based Medicine blog, did a deep dive into the health effects of DST, resurfacing with a well-documented, not-pretty picture. Here’s what science has been able to document during the few weeks it takes our bodies to adjust to getting up an hour earlier: a measurable increase in traffic-related deaths and pedestrian fatalities (the incidence declines with the return to Standard Time); increased risk of heart attack and stroke; an increase in suicide among men (this also occurs with the switch back to Standard Time); increased human error; and an increase in wasted time on the job.

(And pity the poor clock shop proprietor. Bob Capone, owner of Hands of Time in Savage Hills, Maryland, has the privilege of manually resetting an inventory of some 400 clocks twice per year.)

To be fair, Gorsky points out, DST is also associated with increased physical activity among children and lower robbery rates, both easily attributable to increased daylight hours. But he may be mistaken in allowing that DST may increase retail sales, a belief that helped drive the United States Department of Energy’s 2007 decision to push the cutoff date from October to November. If credit card purchases are an indicator, a JPMorgan Chase study suggests that the increase is illusory. The study tracked credit card purchases in Los Angeles, where DST is observed, and, as control, in Phoenix, where it is not. The study found: 

… a 0.9 percent increase in daily card spending per capita in Los Angeles at the beginning of DST and a reduction in daily card spending per capita of 3.5 percent at the end of DST … The magnitude of the spending reductions outweighs increased spending at the beginning of DST.

Ironically enough, the one thing DST doesn’t do is what it was meant to do, that is, cut energy consumption. Depending on whose measure you accept, DST cuts energy use somewhere between 0.03 percent and not at all, or actually increases it.

In financial markets, it appears that moving in and out of DST correlates with riskier investment activity. The University of Glasgow’s Antonios Siganos found that:

… when a merger is announced over a weekend or on a Monday following daylight saving time, the average stock return went up by around 2.50% more in relation to announcements that took place on other days—a statistically significant increase in profits for the target firms. 

By way of explanation, Siganos proffers:

With plenty of evidence that investors experience relatively stronger mood swings and higher risk-taking behaviour when their circadian rhythm is disturbed, it seems as though daylight saving time causes investors to push the stock prices of target firms to more extreme values. 

It goes without saying that people working in financial services industries are as subject as anyone else to mood, safety, and judgment swings due to time shifts. This can certainly increase human error during acclimatization. Over and above, the banking industry has its technical DST challenges, as this 2007 warning from the FDIC makes clear: 

The impact of the DST change may not cause system failures; however, without remediation and preparation, financial institutions could experience automated logging errors, system monitoring difficulties, degraded system performance, or disruption of some services. In addition, malfunctioning systems could result in compliance errors (e.g., incorrect ATM disclosures) and malfunctioning security systems. Examples of other systems that may be affected include those controlling heating, air conditioning, lights, alarms, telephone systems, PDAs (personal digital assistants) and cash vault doors.

An industry with (arguably obsolescent) standards like “close of business” and “working days” already has its hands full with time zones. Regional, national, and international banks need to be mindful that a closed business day in New York will remain in full swing for another five hours in Hawaii. Switching between Standard and Daylight Savings complicates matters further, and locales within the U.S. that opt out of DST, such as Indiana, Hawaii, and certain U.S. territories, complicate them even more. And then there are states like Arizona, where most of the state has opted out of DST, but 27,000 square miles of it—namely, the Navajo Nation—have opted in.

In 1784, Benjamin Franklin wrote that Parisians could conserve candle wax by getting up an hour earlier. But Franklin was joking. He would have been surprised when, a century and a half later, New Zealand entomologist George Vernon Hudson proposed DST in earnest. Germany implemented DST in 1916. The United States followed in 1918 with the passage of the Standard Time Act, better known as the Calder Act. 

Not exactly pulling punches, the Financial Post called Daylight Saving Time “dumb, dangerous and costly to companies.” They may have been on to something.

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The Financial Brand, now for your ears


Click image to listen to “Banking Transformed,” The Financial Brand’s new podcast.

Jim Marous, editor and founder of The Financial Brand and personal friend, has launched a new podcast, Banking Transformed. If you’re looking for a way to make your commute time its most productive, I recommend giving it a listen.

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Banks, AI, and the greater good

AI heartIt is a defining moment in the life of a jumble of letters when the jumble attains real-word status. While most people understand acronyms like laser, sonar, and snafu, few can identify their component words. (Light Amplification by Stimulated Emission of Radiation, SOund NAvigation Ranging, and it’s just as well that not too many people know that last one.) Likewise, no one bothers adding parenthetical definitions anymore for initialisms like UFO, BLT, and GMO.

The release of the 2001 Steven Spielberg film A.I. may have ensconced the initialism AI in the popular lexicon, albeit sans periods. Today even the news media talk about AI without bothering to add a definition. And not just the word but the incidence of AI has become commonplace. We rely on the likes of Alexa, Erica, and Siri without giving a second thought to the fact that we’re talking to a machine. (Why do we so often give AIs female voices? Even the original “Star Trek” computer, which in a feat of creatively the writers named Computer, had a woman’s voice.)

And, of course, within financial services circles, it’s common knowledge that AI assists in voice-activated transactions, fraud detection, loan application processing, live chat, investments, strategic trading, risk management, data mining, funds transfer, foreign exchange, and more. 

Climate change, forest fires, robotic arms—and human decency

In addition to using AI for fine-tuning business systems and service delivery, some financial service institutions are turning their AI capabilities outward for the greater good. Exhibits A and B, first brought to my attention by way of recent articles in Finextra, follow.

For Exhibit A, I submit Royal Bank of Canada, better known (speaking of initialisms) as RBC. According to Finextra, RBC is “…backing a new academic research project using artificial intelligence to address climate change.” An RBC press release states:

In a continued effort to take its research beyond banking, Borealis AI announced a new collaboration with Mila – Quebec Artificial Intelligence Institute to support an artificial intelligence (AI) research project on climate change … together with RBC Quebec, Borealis AI donated $50,000 to Mila’s climate AI research efforts. This donation will help Mila develop a tool that uses AI technology to produce street view images that show the potential effects of climate change … When developed, the tool would allow a user to input a location and see a visual projection of the potential effects of extreme weather events at this location at street level, making these effects more visceral than traditional aerial and satellite images.

“Mila,” the press release explains, “is the result of a partnership between the Université de Montréal and McGill University with Polytechnique Montréal and HEC Montréal.” Borealis AI, “… an RBC Institute for Research, is a curiosity-driven research centre dedicated to achieving state-of-the-art in machine learning.” RBC adds, “We are proud to support a broad range of community initiatives through donations, community investments and employee volunteer activities.”

For Exhibit B, I submit Russia’s Sberbank, which, Finestra reports, “… is teaming up with the Russian Ministry of Emergency Situations to host a hackathon where contestants will use machine learning and AI in the fight against wildfires.” Wikipedia defines hackathon as “… a design sprint-like event” involving just about every computer expertise you can name. Notwithstanding this story’s coming out of Russia, wildfires are quite topical for the United States, and they certainly tie to climate change. Participants in the Sberbank event will …

… develop a solution for automatic classification of fire types based on temperature anomalies data received from satellites. This information could be used to identify possible areas where forest fires occur and let stakeholders react quickly to prevent emergencies.

Sberbank is also in the AI news due to a joint effort with Microsoft. The firms are working together studying the use of an AI “… manipulator, video cameras, and an arm grabber to improve occupational safety for operators who remove coin bags from carts when working at cash handling and cash-in-transit centres.”

As a post-script, I submit Exhibit C, even though it pertains not to AI but to HID—my impromptu acronym for Human Intelligence and Decency. I cannot think of a more fitting way to wrap up National Cybersecurity Awareness Month. This story comes to us from London, also via Finextra. A man who lost his wallet hurried home and logged on to his accounts to see if anyone was abusing his cards. In fact, someone was using—but not abusing—them. Four one-penny payments appeared on his account along with the memo, Hi, I found your wallet in the road, along with a number for the wallet’s owner to call or text. The owner thanked the finder for his honesty with a bottle of red wine. But, Finextra facetiously added, he “… has not yet paid back the four pennies.”

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