Reboot

This needs to be more organized. Nature abhors a vacuum, and I have sucked.

Banking is or will be affected by three major trends. These are themes I intend to explore.

Technology: The everywhere internet and web 2.0 pervasiveness are driving the industry to become more open. Consumers are getting used to constant, clarion access. The current meager online banking options will eventually be replaced. Look out for new services, like this from chase, to get more popular.

Evolution into Service Provider: Online banking, check cards, and id protection can be thought of in terms of service because they are provided to you for use of the bank. With a service provider mentality, they will feel entitled to make money in different ways and help lower the cost of service for more access. Some future offers might be:

• No or discounted overdraft fees in exchange for being able to sell your shopping info to advertisers.
• Enhanced online banking abilities in exchange for ads relevant to recent purchases aired inside your online banking account
• Specially outfitted cell phones with temporary card number generation in exchange for GPS triggered local ads beamed straight to your phone

Advertising needs a new partner: Twenty-somethings will eventually not see Viagra ads, and the elderly will be not informed about about the latest flavor of caffeinated Budweiser. The era of national ad campaigns is dying. The better option is targeted web advertising. It's easier to track, more effective, and can be more enticing with whole websites acting in support of the ad.

Banks, in exchange for services or discounts, can make money by providing information to help target customers in this new advertising world.

I envision them replacing broadcast networks as the major target of ad purchases, maybe through partnerships with telecoms. That is a fun topic for another time.

What the Ads may look like

It makes sense for the bank to get into the advertising business for a number of different reasons. Up to the minute checking account information will be highly prized. Advertising possibilities that would make sense are:

Event Triggered Ads

Upon checking your balance on payday, depending on your micro demographic, you may receive ads for happy hour specials in your area, sales on larger purchases that fall within your budget, or notification that the movie you saw a few months ago was just released on Blu-Ray. Retailers know that your attention will be on your funds. If an event may trigger thoughts about your balance, it is in their best interest to want to advertise during that time.

This could be annoying to consumers. Ads need to be relevant and service oriented. A new parent should get ads for diapers around payday and not movie previews. A person who does not drink should not be notified of happy hour specials. Ads should be expected and not obtrusive. Know the customer.

Proximal Ads

With GPS enabled devices and an omnipresent web, the ability to sell ads that meet certain preset parameters becomes a possibility. For example, Applebees may need to increase it's lunch crowd. Selling ads to air during the lunch hour to consumers on their cell phones who are within a predefined radius from an Applebees location is the most direct way to meet that business goal. With info from the bank, a the massage could be tailored to only include office park dwellers, or blue collar types. Limits would be in place for the amount of ads per micro demographic. Rates would rise and fall according to demand.

Ads for towing services sent to motorist who have been idle for 5 min on a highway. Reminders projected on your windshield from the grocery store about a gap in your milk purchase routine as you drive by it. The combinations are limitless.

This common sense approach focuses the billboard on a targeted demographic. This maybe a way for the lucrative, local advertising scene to play a role in the new economy. The chance to purchase GPS enabled ads could be a facet of the overall small business suite of services offered.

Advertising Heir Apparent

Using your personal checking account information, banks will sell targeted and personalized advertising through pairings with cell phone companies and telecoms.

Why is this a good idea? The customer's personal information(your information) is a valuable, largely untouched asset. With advertising migrating towards more targeted ads at clearly defined groups through the internet, the type of information that a consumer checking account holds becomes a commodity. Money is to be made on who the customers are and not just on their balances and mistakes. Fees as we know them may be a thing of the past.

This type of arrangement would need to be a partnership. Customers will need to willingly want to be a part. Otherwise, sharing information as nuanced as purchases(what, where, when, how, who, how much) will alarm privacy advocates and scare advertisers.

To sweeten the pot, banks should provide incentives. Aimed largely at the net savvy, offering specialized account tools and discounted overdraft rates would sway many. But it must be enough to entice a critical mass to sign up, otherwise advertisers would not pay enough for access

The Future of Banking

In this blog I hope to start a discussion covering the current and emerging trends shaping the banking industry. A major influence will be Tom Davenport and John Beck's book Attention Management, which dictates that service providers will gain a more prevalent role in the evolving economy. Other trends on watch here are ever increasing fees for overdrafts, the decaying housing market, increased spending on web advertising, web banking, a wider acceptance of social-media and its uses.

So many things are coming to affect the banking industry that in a decade, I do not believe the customer facing side will look anything like it does today. Please stop by and check in regularly.