Or, perhaps, how do you trust in a world of digital disruption? We have been saying for some time that the winning currency in the coming months and years will be trust. The question is – who do customers actually trust?
Banks used to be right up there, but their trust quota dropped through the floor during the financial crisis of 2008/9. Since then – even though the banking industry has bounced back – it has continued to plummet. In a personal note on unworkable regulation released by a partner of Collyer Bristow, several examples of banking ineptitude, incompetence and outright cheating were highlighted.
Some four years after the financial meltdown, once trusted giants are being fined amounts that would cripple many small countries. JP Morgan was fined almost $20 billion in 2013 – whilst its share price rose 20 percent. UK bank Barclays was fined almost $4 billion for failing to keep proper records. They were also fined for allegedly rigging US energy markets and were deeply involved in the LIBOR rigging scandal. The Co Operative bank in the UK was essentially taken over by two large hedge funds and the CEO blithely announced that nothing would change. He was later described as ‘financially illiterate’ by a UK Treasury Committee.
What is even more astonishing is that the banking industry is really quite pleased with itself for having achieved 57 percent compliance with current rules and regulations. According to the BillingViews’ calculator that still means that 43 percent of banks and banking activity has not reached the dizzy heights of actual, um, compliance.
And banking networks crash on the sort of basis that you can set your watch by.
Conclusion: Banks as trusted partner in a world of digital disruption? Pull the other one, it has bells on it.
Telecoms companies, by comparison, seem squeaky clean. Network outages – complete ‘I was forced to walk home’ – network outages are rare. Billing complaints still happen, for sure, and when they do, they get their fair share of stick. Rightly so. But, generally, customers trust transactions to happen, bills or statements to arrive and payment to be made without believing that there is anything untoward afoot.
Both industries are innovating. The banking and payments world is coming up with new ways of paying for stuff almost every day. The latest is a cryto-currency from the Royal Canadian Mint. This follows announcements from Zapp, Coin and others. It is always good to watch innovation but one wonders whether the back end systems are able to link up all the new solutions and channels that are being used. The same question can be asked of telecoms companies.
Meanwhile companies of all kinds are being hacked at by cyber spies and cyber criminals. Half of the largest banks have been hacked in the last few months, retailers are being targeted, OTT players are falling prey to criminals and telcos are being lured into traps with fake networking opportunities.
And all of us are being spied on by Government agencies – or at least that is what we believe to be the case.
It seems that the telecoms industry is at least taking the lead in exporting its technology and expertise. Through M2M initiatives, leading telcos such as Telefonica, Swisscom, AT&T and Deutsche Telekom are pro-actively looking for partners, ideas and innovations to help them address the needs of any number of other industries. Vendors are pushing their solutions at other industries too, billing capabilities are being sold to Utilities and Smart Grid/City/Meters practitioners.
Fraud, too, is an area where telcos are in the forefront. Vendors such as CSG are selling real-time fraud prevention to enterprises and telecoms is probably ahead of the game in the nexus of real-time and (big data) analytics which will prove a robust defense against the bad guys for a while and might genuinely turn into serious marketing opportunities.
The question is whether the telecoms industry can capitalize on its intellectual property, its technical know-how and its nascent customer experience techniques to become the trusted partner in a world of digital disruption? We shall see.