Talk of Many Things

Google Images Results for KX-TSC62SX

I recently bought the latest Panasonic KX-TSC62SX corded telephone. In a recent blog post on pricing models, I was planning to use this phone to illustrate a certain point. While I could have always photographed the handset at home, I thought it might be easier to source a picture via Google Images.

When I went there and searched, I couldn’t find a single picture of this phone for as long as I scrolled. Since Google Images uses jQuery Infinite Scroll, you can never be sure how long it’d take to reach the end of the page.

On the other hand, I was shocked to find my own mug shot appearing as the first image!

When I clicked on the image, it took me to Twitter and displayed my recent tweet about this phone. Google Images must have treated the text of my tweet – including the phone’s model number – as tags for my Twitter profile picture, which is how it might have decided to display my picture in its results (Full Disclosure: Apart from being a proud owner of this phone, I’ve no relationship with it or its manufacturer).

Unlike TinEye which searches for images using images, I’m aware that Google Images searches for images based on textual keyword tags. To that extent, I wouldn’t have been surprised to find my picture appearing somewhere deep down in the search engine results page. But it was surely strange – yet familiar – to see it at the #1 position!

In Part-1 of this blog post, we’d described multichannel banking. In Part-2, we’d introduced the concept of omnichannel retailing. In this concluding part, we’ll explain what omnichannel behavior could mean in the context of retail banking and suggest ways by which banks could jump on to the omnichannel bandwagon even if they didn’t / couldn’t fix shortcomings in their current multichannel offerings.

Research is showing increasing customer tendency to hop channels even to complete a single transaction. This forms the bedrock of omnichannel banking and can be attributed to the perception by customers that different channels perform different steps of the same transaction with differing levels of convenience, security, speed and cost. Let me cite two examples from my personal experience:

1. Account Opening: I prefer to complete a form online. But, when it comes to submitting supporting documents, I find it much easier to snail-mail them to the bank instead of scanning several pages and uploading them electronically.
2. Bill Payment: While I don’t mind online bill payment, I can’t stand e-statements and insist on receiving printed bills by post. Click here and here to find out why.

We want checkbooks!

The recent decision by INGDirect USA to introduce checkbooks shows that omnichannel behavior is not my personal eccentricity: Although they opened accounts in an Internet-only bank that doesn’t have any physical presence, the bank’s customers want to write paper checks to make everyday payments instead of  jumping several hoops to put through electronic payments.

To make the leap to omnichannel banking, we recommend that banks identify the channel preferences of the majority of their customers for each step of every key transaction. They should then direct their investments to ensure that each channel delivers the best customer experience for that step even if it doesn’t do so well on the other steps. This approach will guarantee the best customer experience for the majority of customers even if ticks off those outliers among customers who want to do everything on an iPad or at a branch.

To see how this approach would play itself out, let’s take the example of a bank which currently makes available product information on its Internet Banking and Mobile Banking channels but lacks support for completing the account opening process on its remote channels. Such a bank has the following choices:

To support 100% multichannel support for, say, its account opening process, the bank would need to establish realtime integration between its existing internal account opening systems and third-party identity and address verification services. A bank that only provides product information on its remote channels and lacks this level of sophisticated integration has the following two choices:

• Option 1 (Multichannel support): Invest in technology and resources to establish realtime integration between its internal account opening system and third-party identity and address verification services. Eliminate friction from the current web/mobile channels. Deliver 100% account opening functionality on online / mobile channels.
• Option 2 (Omnichannel support): Freeze investment in the online and mobile channels. Let the prospective customer research and make a shortlist of products on Internet / Mobile Banking and, as at present, request her to visit the branch to complete the account opening process. Use clickstream analysis and other technologies on its remote channels to ensure that, when she walks into the branch to complete the process, the branch staff is able to progress the offline transaction from where she left the online one, instead of wasting her time by telling her to start the process from Step One.

Although we have nothing against the first option, we believe that it’s neither necessary nor practical under today’s market conditions. If banks won’t or can’t provide fully fledged multichannel support for whatever reason, the second option gives them a headstart in meeting changing expectations of a majority of their customers who prefer to open accounts in the branch even if they demand online research capabilities from their banks. According to CEB Financial Services Customer Experience Survey cited in this TowerGroup report, this segment constitutes as much as 62% of customers in Mexico followed closely by 61% in the USA.

A majority of customers want to buy at a branch - globally

We conclude this three part series with this recent Finextra article that describes how two banks, Dupaco Credit Union in the USA and DBS in Singapore, are using state-of-the-art mobile and social media technologies to drive more customers to their, ahem, branches! Kudos to these two banks for taking this concrete step towards omnichannel banking!

When will the Indian IT industry contribute its first member to this list?

In its 15 Aug 2011 issue, FORTUNE magazine acknowledged that it “erroneously omitted Chrysler Group from the GLOBAL 500 list” published a fortnight earlier. It goes on to regret this error.

Sounds more like a blunder to me.

Apart from this blemish, this year’s FORTUNE GLOBAL 500 issue is a lot better than the lacklustre one of last year’s. The GLOBAL 500 list is preceded by a short leader article that explains its salient features. The country-wise ranking of the largest corporations is back. The infographic accompanying the “The Best New Cities for Business” article is brilliant (Ahmedabad and Gurgaon are the two entries from India). Despite the missing editorial and the industry-wise ranking, this issue is worth archiving unlike the last year’s.

Wal-Mart and Wistron respectively define the top and bottom of this year’s list.

Way back in 2007, I’d wondered which would be the first Indian IT company to enter this fabled list. At the time, my prediction was TCS in 2015.

Now, this is what I get when I use the last two years’ figures to update my model and extrapolate it until 2020 (download this model at item # 17 here).

As you can see,

1. TCS will now enter the Fortune GLOBAL 500 in 2017 and not 2015 as predicted earlier.
2. Newcomer COGNIZANT can expect to gain membership to this club in 2019.
3. WIPRO and INFOSYS are unlikely to make it until 2020, which is our model’s last year.

These predictions assume that all year-on-year revenue growth in the future will not be significantly higher than present rates. Unless any of these companies does a big ticket acquisition and grows revenues inorganically, this assumption is likely to remain valid.

With its trailblazing growth during the last few years, Cognizant enters this list. Because of tthe internal fraud in SATYAM that came to light in 2009, its absence from this list shouldn’t come as a surprise.

I initially attributed TCS’s delayed entry (from 2015 to 2017) into this list to the slowdown it suffered during the Great Recession. However, the bad times of the past couple of years didn’t leave GLOBAL 500 corporations unscathed and therefore can’t possibly explain this postponement. If there are any financial analysts amongst readers, I leave this to them to figure this one out and enlighten the rest of us with their comments below.

In Part-1 of this blog post, we introduced the concept of omnichannel banking and explained how it differed from multichannel banking. We’d claimed that 100% multichannel support was neither necessary nor practical. In this Part-2, we’ll explain why.

While banks have traditionally viewed their relationship with customers through the prism of channels, customers don’t necessarily share that perspective. Customers just want to get the job done in the most convenient and secure manner possible. Besides, according to the recently published World Retail Banking Report 2011, “…customers view the branch and internet as having different strengths. The internet excels in information gathering, transacting, and looking up account status, customers said. The branch is the preferred channel for solving problems, indicating the value of having a human touch in certain situations. Mobile banking has yet to make a positive impression”.

No wonder customers in different countries expressed an overwhelming preference to open accounts at the branch even if most of them wanted to research new accounts online.

The above chart makes it clear that a majority of customers want to research online but buy at a branch.

This clearly shows that fully fledged multichannel support is not really necessary.

Now, let’s look at the feasibility of delivering 100% multichannel support.

The typical retail banking landscape is dotted with a plethora of systems that have evolved over a period of several decades on mainframe, client server, Web 1.0 and other heterogeneous technologies. While allowing every banking transaction to be conducted on every channel – that is, providing 100% multichannel support – is technically possible in many countries, it would call for a massive overhaul of existing systems. Even in the best of times, the ROI for such “rip and replace” projects has been uncertain.

So, fully fledged multichannel support is not practical either.

Good news is, customers are increasingly displaying omnichannel behavior, and banks can jump on the omnichannel bandwagon quickly.

Omnichannel behavior is the broader adaption of “omnichannel retailing”, a term we first heard about from Paula Rosenblum, Managing Partner of Retail Systems Research, who, in turns, credits it to Leslie Hand of IDC. It refers to increasing consumer readiness, or even preference, to use more than one channel to execute a single transaction provided there’s “something in it” for her. Point to note is that the behavior is voluntary and not forced upon the consumer by the business whom she’s dealing with.

I can readily relate to omnichannel behavior from my own experience of buying a Palm T|X PDA in London a couple of years ago. Starting with a Google Search, I landed on PriceGrabber.co.uk, an excellent price-comparison website. PriceGrabber listed several deals and informed me that the “buy online, collect at store” one offered by the leading electronics retailer Curry’s Digital was the best. I placed the order on the retailer’s website and made the payment online and was happy to collect the product from the retailer’s nearby physical store in Canary Wharf instead of having it shipped to my home address since I wasn’t sure if I’d be home when when the consignment arrived.

While online only meant Internet at the time, it could very well include Mobile and Social Media today. With mobile apps like RedLaser making child’s play of doing price comparisons at the store, omnichannel behavior is  bound to become de riguer soon.

With most banking products being intrinsically more complex than retail goods, we expect omnichannel behavior to gain traction very quickly in retail banking. It’s not difficult to imagine a scenario where a potential customer hears about a new banking product on Facebook, gathers more information about it from the bank’s Internet Banking portal and finally visits a branch to seek face-to-face advice before deciding to buy it.

On the face of it, it might appear that banks have to first get their multichannel strategy right before they can think of omnichannel banking. We feel differently. In Part 3 of this post, we’ll suggest ways by which banks can jump on the omnichannel bandwagon even if they’ve missed the multichannel bus. Stay tuned!

When I wrote Differentiate Your Product By Going The Extra Mile, I’d meant it to be the second and concluding post. But, I recently came across a few more updates – some positive and some not so positive – on this subject that I thought I must share, hence this third part.

One, as I’d guessed, recent realtime SMS alerts sent by banks in India for credit card transactions are the outcome of government regulation applicable across the industry.

Two, credit where credit is due: I’ve since come across one bank – Kotak Mahindra Bank – that has been sending out realtime SMS alerts for over three years for credit cards and eight years for debit cards. I’m sure there might be a few others who have been doing so. I encourage readers to share their knowledge about these banks by leaving comments at the end of this post. Kudos to them for delivering such customer-friendly products well before they became compliance requirements. To me, it hardly matters whether they’re doing it out of kindness of their hearts or a selfish desire to cut down fraud losses, as some have suggested in response to my previous post.

Three, when I recently received the following SMS alert from BANK1, I discovered one more scenario in which BANK1’s product failed miserably and made my blood pressure shoot up instantly:

BANK1: Thank you for using your credit card for INR xx,xxx.00 on 15-Oct-2011.

I was at home when I received this alert, I hadn’t done any online shopping, and I definitely haven’t setup any recurring transaction of such a large amount, so I was almost sure that this was a fraudulent transaction. A five figure amount didn’t help quell my anxiety either. It was only a couple of hours later when my wife returned home that I learned that she’d used her BANK1 addon credit card to pay our daughter’s school fees. Therefore, it eventually turned out that there was no cause for concern around this transaction. (In case you’re wondering why I should be getting the SMS alert when my wife uses the addon card bearing her name, BANK1 and all other banks I deal with send account alerts only to the primary cardholder regardless of who uses the card.)

Let me call this usage scenario Addon Card Present One-Off . Since addon cards are quite popular in India, this scenario is far more common than the previously described Card Not Present Recurring one where BANK1’s product was found wanting. By failing to support Addon Card Present One-Off, BANK1 is going to cause angst to many more cardholders.

To me, this is the tipping point at which I’m led to the conclusion that ‘no alert is better than a bad alert’.

I’ve already written to BANK1 via their Internet Banking portal asking them to either enrich their SMS alert to include the merchant name or stop it altogether. Based on past experience, I’m mentally prepared to receive at least 2-3 emails with statements of platitudes like “we take your complaint seriously”,  ”it is feedback like yours that helps us improve the quality of our service”, blah, blah, blah. Hopefully, by the fourth attempt, they’ll get my point. Depending on what they do afterwards, I’ll either hold on to this card or ditch it when my anxiety gets the better of my loyalty.

Enough and more has been written about how banks lack fully fledged multichannel support. For the uninitiated, a “channel” refers to the medium of communication between customers and businesses such as retail banks. Branch, Phone (call center), ATM, Internet Banking, Mobile Banking and Social Networking are typical channels in the context of a retail bank.

“Multichannel support” means the bank permits a given transaction to be executed via more than one channel whereas a bank offering “fully fledged multichannel support” allows end-to-end execution of each and every transaction on each and every channel without forcing the customer to use a particular channel due to deficiencies in its internal systems. For example, if a prospective customer wants to open a checking account online, a bank providing fully fledged multichannel support would allow her to do so completely on its Internet Banking portal without compelling her to visit a branch. Likewise for other channels.

The degree of multichannel support offered by banks varies from product to product and from one bank to another. Let’s take the example of opening a checking account. Most banks in India only let prospective customers research products and download blank application forms online. Applications must be completed on paper and signed in wet-ink and the applicant must visit the branch in person to submit documents proving her identity and address. On the other hand, this bank in Australia lets its prospective customers research products on its new-generation website, complete forms online and insists on a branch visit only to verify the applicant’s identity. If we take mortgage applications as another example, most banks fare quite badly with multichannel support. As a friend was telling me recently, he visited the websites of more than five banks, all of whom promised online mortgage application. However, all of them stopped after the first screen displaying product details and asked him to submit his contact information so that someone from the bank could make contact with him in the next few days (Apparently, only one bank got back and, that too, after two weeks, but that’s another story).

Digital banking pundits are clamoring for banks to offer 100% multichannel support. In the case of checking acount opening, this would mean that the applicant visits the bank’s website, applies for a suitable product online, uploads scanned copies of her identity and address proof documents to the website, the bank verifies everything in realtime and issues an account number to the applicant within a few minutes. With the mortgage application, fully fledged multichannel support would result in the loan amount credited to the applicant’s account within a few minutes of applying for a suitable mortgage product. No branch visit is required in either case. Now, this is only a demonstration of fully fledged support of the online channel. To attain the mark of total multichannel support, the bank would have to deliver similar functionality over telephone, mobile and social media.

We believe that 100% multichannel support as described above is neither necessary nor practical.

In Part-2 of this blog post, we’ll explain why. Stay tuned!

In my early blogging days, I’d written a blog post called Indian Education System is the Best … for India!

Despite realizing that my views on this subject were, ahem, somewhat contrarian, I didn’t hunker down in some dark corner. Instead, a couple of years ago, in another blog post, I’d wondered whether the much-maligned rote-learning method of Indian schools was what the doctor recommended for NYC’s schools. I wasn’t surprised to receive tons of brickbats from near and dear ever since, especially from friends and colleagues who’d recently relocated to India from the USA and had chosen to send their children to international schools despite the higher costs and longer commutes they entailed.

Now, after hearing about a recent HM Government’s plan and the deliberations among British public around its feasibility, I’m tempted to suggest that the Indian education system is ready for adoption by the UK as well. Before you start doubting my sanity and throw more brickbats at me, let me make my case.

The UK government has recently raised an e-petition to make financial education a compulsory part of the school curriculum. According to the petition, banks and financial services providers are spending “billions on marketing and teaching their staff to sell” loans, mortgages and an array of financial products, and it’s time British schools ensure, as part of “buyers’ training”, that “every child in the country gets a basic understanding of personal finance & consumer rights before leaving school”.

There’s a lot of debate in the British media about the pros and cons of imparting financial education in schools. This article on lovemoney.com and the accompanying comments provide a comprehensive round-up of both sides of the story. Arguing in favor of the petition, a commenter who goes by the handle of WhosgotmyName says, “Until the government recognises that these esential (sic) skills should be part of the national curriculum, generations of consumers will continue to be vulnerable to everthing (sic) from dubious to outright illegal practices.” On the other hand, AndrewFSmith feels that “it is utterly wrong to take time out of the school curriculum whilst one in five of our teenagers leaves school without being able to read properly or do basic sums”.

Personally, I found the views of one Mike10613 to be the most sensible. Apart from suggesting that financial education should be “integrated into existing lessons” instead of being treated as a separate subject, Mike10613 predicts that it will “make learning arithmetic and maths more interesting”.

It struck me that this is probably what the Indian education system has already done when I had a casual look at some of daughter’s study material recently. Her Math text book for the eighth grade at an ICSE school in Pune, India, is full of problems around simple interest, compound interest, loan repayment schedules, and so on. For an assignment in Computers, she’d to include the revenues and profits of IBM, HP and other leading global IT companies.

I don’t remember getting this level of financial exposure even during my grad days, let alone eighth grade. Without attempting to make any claims to being young, I must note that the concepts of simple and compound interest existed back then and companies like IBM and HP were no strangers to the IT industry of that era either.

Having said that, it’s not that my daughter has a separate course called finance education or whatever. It’s just that the basic principles of finance seem to be nicely dovetailed into her existing courses. From personal experience, I can say that Mike10613’s is absolutely right when he predicts that this could make math more interesting.

Integrating finance education into the regular school curriculum is self-admittedly what the UK needs. It’s evident that the Indian school system has already done it.

I rest my case.

The use of QR codes in advertisements continues unabated. We came across three of them on a single day recently. As you can see below, there’s one from the leading Indian retailer SHOPPERS STOP, another from THE BODY SHOP, the UK-headquartered multinational that is the global leader in ethically produced beauty products, and the third one from the leading IT magazine DATAQUEST.

Recent Ads Using QR Codes

Our own experience mirrors the growing trend of QR code usage. We’re currently developing a SmartResponse QR code product called QR360. Although it’s still in the pre-launch stage, we’re receiving a lot of inquiries for QR360.

Having said that, the awareness of QR codes among consumers still has a long way to go. As a matter of fact, we’ve noticed that even the adoption of smartphones – which are required to scan QR codes – has a lot of ground to cover before we can consider them mainstream.

At the same time, we’ve seen a distinct trend in smartphone ownership during the course of community-testing QR360: Almost one in three people below the age of 30 has a smartphone, whereas the corresponding figure among 30+ is less than 10%. We’re not sure if these are representative numbers but, until the demographic pattern of smartphone penetration become clearer, it might make sense for advertisers to treat GenY as the sweetspot for QR code based advertising and restrict their use to this age group.

Advertisers using QR codes in their ads might also want to give a strong reason to consumers for scanning them. Taking the above three examples, the Shoppers Stop ad provides a place of prominence to the QR code and promises “delightfully low prices” by scanning it; the QR code was snuck in a corner of the ad by The Body Shop and contained no explanatory text to incent the reader to scan it; not only is the QR code in the DATAQUEST ad prominently located but it also serves as a mobile coupon by offering 5% discount on the already-discounted subscription rates. We won’t be surprised if DQ and Shopper’s Stop achieve far greater consumer engagement with their QR codes.

RELATED LINKS:

Use QR Codes To Create Augmented Reality & Bolster Conversion Of Leads To Deals

Use High-Tech With Caution In Ads

Who Will Bell The ‘QR Code Reader’ Cat?

In Part 1 of this blog post, we’d compared the realtime SMS alerts for credit card transactions sent out by  two banks, BANK1 and BANK2. In this Part 2, we’ll look at these SMS alerts as ‘products’ and see how well they work for the customer towards detecting and preventing fraudulent credit card transactions.

Both banks permit the following modes of card usage.

1. Card Present One-Off. This is the most common usage scenario in which the cardholder physically hands over the card to the merchant to pay for product or service. Authorization happens for that specific purchase transaction.
2. Card Not Present One-Off: In this typical online usage scenario, the cardholder makes a purchase on a website, enters the card details on the merchant’s website, and authorizes that specific purchase transaction.
3. Card Not Present Recurring: The merchant picks up the customer’s card details from file and uses them to execute recurring transactions on the basis of a one time authorization issued by the cardholder.

As seen earlier, BANK1’s alert is not detailed enough to work for the third usage scenario. As a result, it doesn’t really fulfill its purpose of alerting the cardholder to potential fraud, let alone help them prevent it, under all usage scenarios.

We can easily foresee BANK1 defending its product by arguing that the cardholder could visit Internet Banking to find out more details and judge the veracity of the transaction. That argument would fall flat for more than one reason: One, it defeats the basic purpose of using an everywhere-everytime-on channel like mobile phone. Two, it demands more effort from the cardholder. Three, and most importantly, it won’t work anyway: While SMS alerts come in realtime, card transactions are posted only a couple of days later on Internet Banking.  A visit to Internet Banking immediately upon receipt of an SMS alert wouldn’t reveal the existence of the transaction, let alone its underlying details.

If BANK1 continued to defend its defective product design by telling the cardholder to remind themselves to go the Internet Banking portal a couple of days later, I imagine that many people – including me – will go to another bank instead.

BANK2 has gone the extra mile and designed its SMS alert product in a more comprehensive manner. By delivering more detailed information, its SMS alert clearly accomplishes the goal of alerting cardholders to potential fraud.

2-way SMS Alert

On the face of it, the difference between the two products might appear trivial to a product manager but, to a customer, it makes all the difference between a good and a bad product. We wish there was a better way of putting this, but the plain and simple fact is, BANK2’s product works and BANK1’s product does not. Worse still, the sloppy design of BANK1’s product leads to False-Positives, induces anxiety and asks the customer jump several hoops to derive any actionable intelligence from it.

Now, moving on to the second goal of the product, namely to prevent fraud, let’s look at how these two products fare. Supposing a cardholder spots a fraud, what should she do? As per current design, the cardholder has to call the bank’s call center to report this transaction. We all know how painful that could be, especially for something as time critical as this.

We wish banks implement 2-way SMS alerts – yes, they’re already available  - such that the cardholder can reply with a simple “STOP” message to block a fraudulent transaction.

For banks who think we’re perhaps asking for too much, we’re not: We admit we could be victims of a common consumer affliction that is so succinctly expressed by the German saying “Waehrend des Essens kommt das Appetit“, which translates to “the appetite grows during the meal”. At the same time, like most consumers, we recognize that “there is no free lunch” and might be open to paying a nominal charge for the advanced version of this product. This could create an additional revenue stream for banks, which isn’t something they would want to sneeze at, especially in this post Dodd-Frank-Durbin era of the tight squeeze exercised by regulators on overdraft, interchange and other traditional sources of fee income.

I recently realized that wherever I go, malls follow.

My mall karma started when I was working in Ramco Systems in Chennai, India. Located in the basement of Apex Plaza in Nungambakkam High Road in the late ‘nineties, my office was adjacent to Landmark. Now a part of the TATA Group with countrywide presence through several stores selling books and music, Landmark was then a single bookstore. When its management decided to enter music, the store needed more space and took over our side of the floor. And out we went – to the third floor of the same building.

Phoenix Market City, Pune-Nagar Road, Pune

Then came my stint at the headquarters of Zensar Technologies in Pune, India, in 2003. My office was located in a building on Pune-Nagar Road that was a famous landmark in Pune for several decades. Although I moved on from Zensar in 2004, the office location remained on my radar since it’s close to my home in Kalyaninagar. Around 2005 or so, Zensar sold this plot and moved to a new facility. For the next 3-4 years, we were seeing some massive construction activity happening there on a “stealth” mode. Only around six months ago did it become widely known that this was the site of one ‘Phoenix Market City’, a mall. And so it turned out that yet another of my office locations became a mall.

While I haven’t been able check the current state of some of my ex-offices in Ruwi (Muscat, Oman), Niederrad (Frankfurt, Germany), Dreieich (near Frankfurt) and Marsh Wall (London, UK), I won’t be surprised if I were to find that they’ve made way for glitzy new malls.

Readers of the iconic Catch-22 might recall the character of Chief White Halfoat: Every place Chief White Halfoat pitched his tent, oil companies would sink a well and hit oil. When I’d read the book around thirty years ago, I found its characters hilarious but never imagined that I’d come across their likeness in real-life. Around 2-3 years ago, I started having second thoughts when I read about  Charles Tyrwhitt and COBRA. Now, with malls following one after the other of my offices, Catch-22 started to seem not only increasingly plausible but chillingly autobiographical!

I’ve decided to take the bull by the horns with my latest move. My present office in Regus Business Center is actually located inside a – ahem – mall (Connaught Place in Pune, India)! Instead of malls following me, I’ve started following malls and succeeded in reversing my mall karma!