These two pieces of legislation are dangerous. If copyright holders want to go after copyright violators, they should just simply use law enforcement and due process. If foreign governments do not provide the proper laws to protect copyright holders, pressure should be put on them to add that protection.

I’m cool with having an address on a customer profile, and even occasionally couriering or mailing you stuff like a new debit card (although in the future we’ll just be downloading debit cards to our mobile wallet). However, that doesn’t mean that your address is essential for IDV.

BK

I’m a big fan of contract-based (or output-based) budgeting for this reason.

It was interesting to see TD’s approach to handling this problem. They appointed the ‘manager’ who was holding the branch budgets, to head up digital – then told him to go find budget. A pretty practical solution IMHO

BK

When you give a manager a budget, s/he will do things: 1) Attempt to prove that the return on that investment (budget) is really high, and 2) Attempt to ensure that next year’s budget goes up (or at least not down).

These might not really be mutually exclusive points as #1 is used to accomplish #2.

Any new channel suffers from having to steal budget away from existing channels. Or, more accurately, from stealing budget away from the MANAGERS who run those existing channels. And that’s a whole easier said than done.

My solution would be to take the more successful managers from existing channels and put them in charge of the new channels. I wouldn’t buy the BS that they “don’t understand the new channels” blah blah blah.

Am I right in saying that your main objection with legacy architectures is the form filling, resulting duplification and capacity for mistakes and costs associated with that?

OK – get rid of the paper. If its not necessary for digital banking, why should it be needed for a branch?

Just give the induction staff (those opening the account) an iPad/whatever and let them fill it on on behalf of the customer. Their familiarity with the process (unlike the customer) will speed it through and provide an opportunity for up-selling. Why do I feel there is such an opportunity?

Now I have to put my psychological hat on.

When you give a customer a chance to think during any process, they will start to think out loud. That’s an incontrovertible fact. Let me tell you about doctors in general practice – bear with me!

Many doctors find that a patient will visit them with a problem. while they’re writing the prescription or waiting for the patient to get dressed, the patient will say “oh by the way, I’ve also got this lump/rash/pain etc”.

This is so common, it actually has a medical name – doorknob syndrome – Google it to see the results.

I’m lucky enough to have spent time on both sides of the banking fence – working along side front-line staff in branches as I waited to get access to the systems I was about to install, fix or upgrade where I couldn’t help but overhear the conversations and on the digital side where the flow and click rate were key.

What your readers may not realise – but I’m sure you will – is that in on-line or phone banking, customer contact times are measured in seconds per month and strenuous efforts are made to reduce that. Many a time I’ve had my backside kicked for a system that was slow or not running at the optimum – believe me, its not something you forget. Barclays once fired their ATM director for the simply mistake of getting a date change wrong one weekend that took the ATM’s offline!

But my key point is that for a digital bank to make money it has to sell things that are sold from left field – door-knob syndrome sales – yet digital is absolutely not optimised to do that. Particularly not local app-based digital. Retail on-line is about minimising clicks to cart. Conventional retail is the diametric opposite – its about slowing the customer down as much as possible to keep them in store while they think or impulse (door knob) buy.

Every bricks-and-mortar retail environment offers side-sells. Buy a car and where you sit while the process completes and look around you. You’ll see the floor mats, accessories, clothing. Porsche is the greatest exponent of this. Go and check out a Porsche showroom. I defy you not to buy something you never went in for!

Your greatest challenge is to deal with that disparity. I’m sure you can fix that, but I’m worried that’s not in any of your published discussions.

Again, this will be something you’re aware of, but your readers may not. Check the site that you contributed to,

http://engagementbanking.sapient.com/

And click the “role of the branch” tab, tab 3. The chart shows the customer engagement value matrix – you’ll see my point. Digital is low, branch is high.

In summary, I absolutely agree with you that the legacy processes are terrible and should be re-vamped to use the technology now available. Paper is a ridiculous concept and has no place in any modern commercial environment. Believe me, I know I also worked on the IBM AS/400 systems in one bank that managed the vast paper storage facilities for all that paperwork!

But to sweep away the entire legacy environment because the forms sometimes get filled in wrong is a bit like throwing out the baby with the bath water!

I’d recommend that along with all your web and UX developers, you get some retail psychology people in before you burn too much start-up capital on cool-looking but ultimately ineffective digital front ends.

Your characterizations aren’t entirely accurate. There’s a difference between core capability to support a digital bank, and legacy capability.

Firstly, the paperwork of account opening is still done in a legacy branch, then it’s entered into a computer either in-branch or in a central processing centre. For a client opening a current (checking) account, and a credit card, a combined form may be executed, but the data is entered twice into two different systems. It’s not uncommon for customers who’ve opened a CASA account and a credit card, to receive documentation from the bank with errors in one or both of the accounts, such as incorrect addresses, differences in spelling between the debit card, check book and credit card, etc. The centralization of processing, is not exactly a seamless, flawless system.

The problem for me is still largely unnecessary manual processing and handling. On your comment that branch staff are a ’shell’ as a tiny cost of overall service provision, the economics I’ve looked at don’t bare this out, but I can see in some derivations that might be the case. Regardless, the manual processing and any paperwork are simply no longer required in this process. So they are still simply legacy costs.

With my experience on the Movenbank side (and with other global banks), I can tell you exactly what the cost of processing, etc is, and I can tell you it is generally fractional compared with the traditional costs I see accounted for by most retail banks on the acquisition and day-to-day account management side. Sure, I need a core system, and I need processing capability. Do I need “legacy” systems? No. Do I need legacy processes? Absolutely, not.

The key debate here, and what I was trying to get into, was not around legacy technology infrastructure, but legacy processes that simply aren’t defensible. Current IDV processes are a big one for me. I’m sorry, but regardless of what defense you want to mount on a central processing basis, maintaining the current signature card and IDV process, is not smart – it’s risky and expensive.

There’s much work to do. Let’s not confuse core processing capability with the dead wood of manual processing, processes that have already been successfully replaced by other more progressive institutions, and older legacy systems that require significant work-arounds to work in today’s environment.

BK