The dot-com bubble didn’t slow the launch of new devices and faster connectivity. Most of my work was in infrastructure design – data centres and desktops. Corporates saw the Internet as something to be tightly controlled and restricted – filtered out of existence. Barclays had 256Mb in 2003. In total.

Imagine telling your boss you should be listening to Twitter and Facebook traffic. They’d have thought you were mad – or you’d have been fired.

For sure, I did get in early, designing online banking and browser-based systems. But the name I chose – LANZen – reflected corporate client priorities at the time. The LAN stood for local area networks and doesn’t reflect the place we’re in today. This Internet world isn’t local any more. Its in The Cloud.

So its goodbye to LAN – and thanks for all the fish as they say. And hello to zen. Come on this adventure with me. It’s going to be exciting.

No. This stream of vitriol was for suggesting, “maybe people like bank branches.”

Earlier that day, MovenBank’s Brett King gave me his view about bank branches, having read my piece about the psychology of financial services buying.

We hadn’t agreed, but valuing his view, I printed it. People should have both sides. But by arguing, I’d upset someone. And the smelly stuff hit the proverbial…

Yes, but – maybe we should…?

No, we should not – not unless you work for or better still, own the bank, it seems. This was the view of one vocal and ironically, active social commentator.

He laid into me for daring to question the sovereign right of any banker to be right. Apparently, my comments as a perceived outsider where simply worth nothing.

Anyway, parking for a moment that I could hardly be considered an outsider, having worked in banking for ever and seen it from all angles, from standing in front of a counter as a customer, to presenting strategy in a bank board room.

Nowadays, I’m happy to pass on my experience and views to anyone who’ll listen, either via this social platform, Twitter or directly to those still engaged in banking.

But that, to my new Defender of the Banking Faith, is simply not good enough. What absolutely staggered me was his dismissal of any social comment.

He stated clearly that any social comment was in his words, worthless, unworthy.

Now, I’ve nothing against this guy. We’ve never met, but he’s clearly intelligent and well connected. But I really feel he has one trait which to me, is a red rag to a bull. He doesn’t provide opinions. He issues proclamations. His position is the truth, differing views all false. Or you’re just plain stupid – and arrogant to disagree.

Stoning the philosopher

The guy epitomises what Socrates often used to stand up against, the Sophists. Sophists peddled their opinions as fact, often for money. Much of it was rubbish. Socrates used to go for them like a dog at a juicy bone.

I’m sorry, but proclaiming a point with no opportunity for discussion winds me up. While I’m no Socrates, I can’t help but question when I sense that whiff of bullshit.

Up until this point, its fair to say our exchanges had been civilized, by and large. The Sophist would made his point, I’d disagree, he’d dismiss me out of hand.

We’d extend the exchanges to Twitter. Just like cowboys falling out of the saloon. Twitter’s less urbane. You can swear and stuff. Even joke. But not with him.

His expressed views are contradictory. He doesn’t believe in the platform he uses. Maybe he feels social expression should be one way only – his way.

Or perhaps he’s trying to position himself to land a role working for MovenBank. Maybe he thinks ingratiating himself like this is a great way to get noticed.

I guess only time will tell. But meantime, I’ll still go on preaching my social gospel. All my critic’s done is damage his own integrity. And that’s the undeniable truth.

MovenBank’s appeared, Zopa’s broken more records, Wonga’s won more awards and a new social P2P player’s launching, CivilisedMoney.

It generated quite a lot of Twitter traffic with people on digital banking’s front-line, like banking innovators, Darren G and Aden Davies. And raised one key question.

Online or on high street – can a click ever replace a footstep?

Online’s brave new dawn. Maybe not so bright

My Tweets about online’s failings even reached MovenBank’s founder, Brett King. Mr King believes “Banking was now something you do, not somewhere you go”

I’d countered that banking should be offering both. He pointed out that bookshops offered a high street experience, but people chose to buy online.

But that’s not a failing of the bookshop’s business model, that’s more about cost. Lots of people will visit a bookshop to browse, but then they go and buy online. Not because its better in any way, but solely because its cheaper.

What Mr King’s statement ignores is that online won’t be cheaper for consumers. Online will actually cost customers more – and deliver far less.

Mr King’s bookshop analogy is relevant here, though. Let’s think digital books.

Digital books can be used on iPad, Android tablets and Amazon’s own Kindle. They’re a true, full-fat, electronic experience.

Yet, the reality is digital has managed only a small dent in the printed book market. Real books are alive and well – they’re just being ordered online!

People still prefer that safe, solid touch and feel of conventional printed media, Just the same way they prefer the feel of high street banking.

And that brings us to the essence of this article. How people choose stuff.

The psychology of interaction – and selling

As someone who’s been there right from the start of the online banking revolution, it seems strange to be questioning what seemed back in 1996 to be the future.

But when your head’s into the tech, its hard to stand back and think about people. When you’re rolling out systems and designing interfaces that’s all that matters. But actually, isn’t it really the people who bank that its all about?

Banking’s not about networks, devices and software. Its about selling a service. Banking’s all about psychology, not systems.

Money’s our biggest worry. Dealing with large chunks of it a fraught undertaking. Handing it over to a third party like a bank, is therefore, a very big deal indeed.

Want to move a few quid here and there, check a balance, etc, fine. Do that online. But setting up a mortgage, bank loan, savings scheme for your children?

Now we need to talk – but not just talk, we need to trust the person we’re talking to.

Our senses take in the people, the atmosphere, the ambiance and even the smell. Every one of these factors slowly build a trust.

Now I’m sorry, but I can’t see how trust can be replicated in the digital domain. They tried that with HAL in 2001 and I seem to recall, it didn’t end well.

Time to take a reality check

Let’s park the question of trust just for a moment and think about access to online. This will come as no surprise, I’m sure – banks will save money delivering online. Wait a second – the banks haven’t rushed to close branches to go online. Why?

It’s because digital doesn’t reach everyone. Not now and certainly not in the immediate future. Mobile, tech’s greatest only touches 70%. Of that mobile users capable of digital banking, less than 30%.

In other words, if banks closed branches and went to a digital mobile model today, they’d loose over 76% of their market.

And digital’s only used for the type of service that won’t really generate revenue. Real investment services, like mortgages, savings and loans aren’t going to do well through that channel anyway!

In addition, mobile market expansion has stalled after phenomenal growth at 70%, the banks won’t see their underlying channel grow much bigger.

Of that, Smartphones are less than 30%. Even if that doubled, which isn’t likely – banks would still only reach 48% – less than half – their customers!

Clearly, Brett King’s MovenBank will have a tightly defined target market in mind. That must be the 24% of consumers with digital banking capability.

But while that has the potential to do routine transactions online, the real money, trusted services, doesn’t lend itself (no pun intended!) to the digital channel.

Show me the money

One aspect not discussed is of course cash. Cash forms the bulk of transactions, despite the availability of online and electronic channels.

Here in the UK, its 61%. In the US, 57%. While in Germany, its a staggering 75%. Just how will online deal with cash transactions, small businesses, shops, etc?

Remember, for all its promises and pizazz, Movenbank is just a flashy front-end. The old banks will still be delivering its payment services behind the scenes.

So precisely how does MovenBank intend to create trust and deliver that online?

A cool website and snazzy mobile app isn’t going to do that!

Before the crash, we trusted banks and most of us funded our lifestyles with credit. Nowadays, most people are recovering from first-degree finger burns and avoid credit like gasoline on bonfire night.

But life still bites. You still get unexpected bills that threaten the next meal’s arrival. And if that happens – and you’re smart – you’ll appreciate Wonga…

Credit for real people

My bank account’s often under threat, bank notes to me, an endangered species. Its usually a close-run sprint between my fluidity and end of the month.

Take my car service bought this month. It was meant to cost £235. It cost me £575. Then a big banking client was supposed to pay an invoice I sent them and didn’t. Well, they did, but into someone else’s account – but that’s another story.

But hey, I got by as you do, but just occasionally, people like me don’t.

I don’t mean those who just can’t manage money, I mean those who usually can. This is a tale of real life. Those who choose not to have credit cards, or overdrafts. People who had the gold, platinum and black cards and got rid.

For them, a sudden nasty bill means bank charges for unpaid standing orders. And that bites hard. Very hard. No one talks APR then.

Tales of the unexpected

Here’s what could have happened. Let’s take that jumbo-cost car service of mine. For many, paying it would have meant that something else simply didn’t get paid. Miss just three direct debits and your bank could charge you £90.

Now imagine you’d borrowed £200 from Wonga to help with that unexpected bill. Wonga would have charged you £25 and all your commitments would be met.

Sure, you’d still have to pay your loan back, but without Wonga you find yourself paying your regular bills twice that next month – along with bank penalty fees for the unpaid direct debits.

Wonga – the time machine

Wonga would have shielded you from the bank charges you incurred from not meeting all your direct debits, which would have added to your plight even more. What you did was cleverly shift time in your favour – and as ever, time is money.

So Without Wonga your bills go unpaid and its costs you £90 for not paying them. With Wonga, your bills get paid and say, a £200, 10 day loan costs about £25. Now, someone tell me what APR has to do with that?

Credit only where its due

Just remember, Wonga doesn’t lend to poor risks – it lends to safe, real people. People with good credit who just every now and then get caught out.

Its a financial fire service. Something you may not ever need but when you do, you’re glad it was there. It beats throwing gasoline on your fire like your bank will.

And about that APR? Get over yourself. And get those feathers off my lawn.

If our high street merged, what would you take from each to form one super bank?
I’ll leave you for a minute to have a think about that one.

For all banking’s “talent” and money, why so little to choose between each one? Why can’t we find a killer product or even one differentiator?

How can this be – in other sectors key differences exist. Why not in banking?

No competition – no value

The one fixed, ever-present attribute of any free market is that of competitive value. Competition always drives differentiation and an effort to do more to gain share. Yet in banking we could remove three and not miss their contribution at all.

Banks tell us the market they operate in is so competitive, they need to pay footballer-level salaries and provide sky-high bonuses to simply retain their talent. OK, cards on the table. Talent that does what exactly?

Bank systems measure market trends and react to change at the speed of light. They’ve more global market intelligence at their disposal than any other business. Yet they can’t think of one single thing to do differently from each other.

So that then begs the question, why pay for all this talent to effectively do nothing?

What do you call a market without a differentiator?

Imagine a small-town market, each stall selling the same things at the same price. What would you be thinking as you walked past each identical stall?

You’d probably be thinking collusion – a conspiracy designed to rip off the buyers. You’d be thinking that they were all working together. You’d be thinking cartel.

The lack of difference between banks can’t be co-incidence, it must be by design. When a market shows no competitive difference it must be collusion.

This isn’t just anti-competitive, it acts as a barrier to the growth of their customers – you and me. It take away our right to choose, to find what works for us.

So what should be done about it?

Learning a lesson from the past

In the US, one company, Bell Telephone grew so big that it stifled competition. Prices rose and its dominance acted as a barrier to any other entering the market. Sounds familiar, doesn’t it?

When did you see any new bank and I’m not talking about the cardboard cut-out banks like Tesco and Sainsburys?

The American solution was to split the company in half, destroying its monopoly. That facilitated the creation of two spin-off companies, the so-called Baby-Bells. Why not do the same here?

Its our money – why not our banks?

We should take the banks and break up each one, 50-50. Offer new licences to totally new management with an enforced disconnection from each former bank.

Offer the customers a 50% stake in each new bank, up to a 10% maximum share. Let each bank exist on a probationary licence for five years.

The existence of a 50% private holding would prevent any new cartel appearing. The creation of smaller banks would remove the possibility of a seismic market reaction to any bank failure – the so-called “too big to fail” scenario.

The new banks would evolve organically, the market finding its own natural level. Only if this happens will we see the breakdown of our identikit banking culture.

And that can’t come a moment to soon, but it can come a second too late.

The writer in question was James Gardner, who’s the general manager of Spigot, the leading business process software vendor in the innovation space.

In theory, he should know. But then he suggested that it could be “nearly 100%”. That sure had a disrupting effect on me – because that’s plain silly…

Overselling the product

I’d pointed out that Zopa had captured 2% of the loan market in less than 6 years. James responded that he’d have expected a near 100% market share.

The first thing to accept is that any viable market will have a number of players. Simple market forces would constrain even the World’s Most Amazing Product. There is almost no chance that it could ever realistically see 100% market share. That wouldn’t be disruption – that would be total market annihilation.

OK – let’s leave James to his blushes. But what is the real measure of disruption?

Defining disruption – the true measure of success

Rather than me pompously spewing out a meaningless figure, we should look at great products in a number of markets and see what they actually achieved.

By defining some norm, we’re more likely to set the bar for a meaningful measure. Defining a level of expectation, if you like.

Let’s take a number of products that were generally accepted as game changing. Looking across markets will balance things out.

First up – and a surprising winner, given that cleaning isn’t exactly a joy, is Dyson. Billionaire Sir James Dyson was knighted for producing his vacuum cleaner.

Market share? 40%. But that took 27 years.

Next its the world’s most successful technology company. Who could forget Apple.

Market share for Apple is 10.7%, with iPhone at 5%. They’re had 35 years and 4 years for iPhone.

Internet search is a strange one. Yes, its a market now, but it wasn’t originally, it was a function. This does have one dominant player and will skew any measure as a result. But we have to include Google.

Google dominates Search with 64.8%. But even Google took 13 years to get there.

OK, now we have some viable samples across markets. How about an average?

The Disrupter benchmark

So true market disruption has been achieved when market share touches 30%.

But don’t hold your breath – the average time to reach that position is 19.75 years.

So knowing this, can we now look at disruption logically rather than emotionally? Well, I’m no statistician, but this allows some empirical measurement for sure.

So what does this give us?

What this suggests is that disruption isn’t an overnight thing, there’s no big bang. Market share is distributed – so to gain some, someone must lose some.

The bigger the market, the more players in it and the smaller the slices available. When ten players own a market, each with 10%, to take 2, 3 or 5% is significant.

Finally, it isn’t a sign of failure for a player to take some time to cause disruption. We have to take a mature view of change and realise it can’t be instant.

We should differentiate between what causes a stir – and what causes disruption. We can do the former instantly – the latter take a lot longer!

And at least we can put to bed the silly idea of 100% penetration. Sorry James.

I mean, there are some great web browsers – and they’re all free, for Pete’s sake. Gaming calls for the latest technology. People happily buy that, don’t they?

But for some reason, we have to placate the stupid and design sites like its 1999. Web designers are told that they must maintain full compatibility with everything. Not just for browsers maybe a version behind, but stuff from another age.

Well, I think it’s time we ask the question. Should we push or just follow?

Time to smell the fresh coffee – not last week’s leftovers

Well I’m prepared to stand up. I’m tired of worrying about what my site looks like to some lazy no-hoper with a 15 inch Compaq monitor he got from a car boot sale.

Or trying to appease some public sector clerk who sticks with IE6 because that’s what they use at work so that’s what they expect to see.

I’m about the future, so if something looks wrong, go to PC World and sort it out. And who knows – that may even wake up to what’s available, too!

It happens elsewhere – why not in web design?

What I’m suggesting may sound hard. But come on. We got rid of leaded petrol, brought in seat belts, crash helmets and got rid of rusty cars.

We abandoned black and white TV’s, Betamax recorders and then went digital. Even floppy drives and DAT tape were consigned to the scap heap.

All those things cost money. But what I suggest costs nothing to fix. Let’s wake up!

The web’s a beautiful place. We can achieve so much given the freedom to move. Let’s forget the lowest common denominator and show what we can do.

Come on, lets face it. What have we really got to lose?

Firstly, PwC two main businesses turned over £900 Million and £650 Million each. The next is that UK Chairman Ian Powell will net a bonus of £3.7 Million.

And thirdly, they took on 1,200 graduates – average age 24 – to work with clients. Congratulations. That waste-of-space intern is now costing you £2,500 a day…

A sense of corporate responsibility

Now let’s be fair. when I was 24, There’s no way I’d be trusted to tie my own laces. And certainly, few of my contemporaries were really much better.

At that age, being stupid is a right of passage – and that’s OK. But don’t forget that. The trouble is when greed places inexperience put into positions of responsibility. Because that’s when qualifications don’t qualify you. They never did.

Would you really trust your critically ill child in the hands of a 24-year old doctor? Most would be more likely to take the drugs up their nose than prescribe them.

When you exclude the admin and support staff, those graduates represent nearly a third of PwC’s staff. The chance of you getting seasoned expert professionals who actually know what they’re doing – or care – is very low.

What you’ll get are juniors who’d find spelling their company’s name a challenge. Probably why the Company shortened it to PwC in the first place.

That means you’ll get your audit or due diligence donkey-work done by donkeys – not by seasoned partners. They’ll be off somewhere enjoying their average £750K bonuses somewhere – anywhere – other than in the City.

Keeping those revolving doors well oiled – literally

The City enjoys a circular cartel of auditors working with banks who work with regulators who in turn conspire with government. At any stage of their careers, these people can be found in that tightly-bound circle.

It protects the culture of corruption, greed and stupidity, the discredited and failed systems governing banking, the endless dodgy deals done behind closed doors. Everyone involved conspiring to keep us from the truth.

Never forget – PwC, Deloite Ernst & Young, KPMG and the other under-stone dwellers sanctioned the dirty practices that brought our economy to its knees. What justification is there to continue fattening these irresponsible cats?

Could a lawn mower be the key to change?

About how a company faced with a collapsing market found the vision to change. Emerging stronger and able to cope with an even greater challenge to follow.

Once upon a time…

In 1886 in fact, a young engineer called Robert Bosch built a company that would kick-start the emerging car building industry.

By 1902, He’d designed the first spark plug and ignition systems and ten years later was exporting nearly ninety percent of what he made.

Bosch made it through the First World War only to face the great recession of 1930 and a country in turmoil. That signalled the Company’s first re-invention.

A company reborn

The Company turned to new markets, designing and releasing the world’s first hammer drill and then scored again with the first domestic refrigerator.

But Bosch wasn’t about to be dictated to by shareholders or greedy money-men. He made sure of that. By 1937, he took Bosch private giving any profits not ploughed back into R&D to charity, which is still the case today.

Another financial winter

But even a visionary company like Bosch isn’t impervious to a global collapse. 2009 was its worst year, losing 60% of its sales to see rare balance book red ink. But did Bosch reign in costs and try to shelter from the financial storm?

This is where we see the sharpest contrast between banking and Bosch. While banks shrank away from the cold wind of crisis, Bosch ploughed four million Euros into research and new products, 50% of which was in eco-development. And by 2010, they were back in profit and had filed nearly 4,000 patents.

The banks on the other hand despite doing nothing to change – having caused the crisis in the first place – had the audacity to award themselves extravagant bonuses in the name of “talent retention”.

So how could the banks learn from Bosch?

By realising that the fall of one market doesn’t mean the collapse of everything. By having the courage to use the value of the people they employ to work towards doing something different, something better.

But above all, by realising that a profitable business isn’t just about shareholders. Companies can be morally rich as well as financially successful.

Just a pity Bosch never chose to go into banking.

You basketball fans will know that the European Championships are currently on. There’s an app for that – and here it is…
Its a really well designed app for iPhone and will be the go-to app for hoop fans. And at $1.99, if you don’t want to miss a game, you shouldn’t miss this.

The app’s of course available in the App Store right now. So why not give it a try? Makes a change to talk about this rather than the Euro as a basket case!