3 Technologies to Watch in 2017

I think it would be good to start with a quick review of my three predictions from last year. The first one was Virtual Reality (VR). I think I got this one mostly right as the Playstation VR and Oculus Rift both reached consumers within the year and received extremely good reviews as did some of the Playstation VR games. I say mostly right though as the reach has been pretty limited to those who are well ahead of the curve and to some gimmicky examples mainly for marketing purposes. Although judging by the App Store charts this Christmas VR certainly seemed top of the list with many of the top 20 apps being VR apps.

Secondly was Personal Fitness and Health Tracking. I think this was pretty spot on. We saw a major shift in the wearables market over the last 12 months away from them being a smartphone accessory to being specialised fitness and health tracking devices. There was a clear focus on fitness in Apple’s marketing of the Watch and new Watch 2 in the latter half of the year along with the Watch 2’s new features mostly being around fitness. We also saw the French wearables company, Withings, being purchased by Nokia for 170 Million Euros in a bid to ‘accelerate entry into Digital Health’. Again this Christmas Fitbit was in the Top 5 apps in the App Store.

Finally, I discussed Electric Vehicles although focussed on Plug-in Hybrids (PHEVs). This, I think, was mostly right. The Tesla Model X did start shipping but in quite limited numbers. Details of Faraday Future’s offering were not really released in any detail but will be in the upcoming CES 2017. Most vehicle manufacturers released PHEV versions of some of the vehicles and sales of Low Emission Vehicles in the UK increased by 48% compared to last year. There’s still some way to go on this one though. Perhaps I was a year or two early on this one.

So now let’s get in to 2017. We’re starting to get in to a strange stagnant period, almost a ‘no mans land’ between old tech and new tech. Between the Smartphone and the next generation, between human powered tech and AI powered tech. I think 2017 is going to see some hyped up technologies tank - Autonomous Vehicles top my list as the hype fails to materialise in to anything close to the publics and medias (wrong) expectations.

We’re going to see some interesting things happen though as seeds sewn over the last few years begin to grow.

1. Start-up Banks

In Europe, and particularly the UK, there has been a flurry of FinTech (Financial Technology) start-ups raising Venture Capital over the last two or three years. This combined with the relaxation of banking legislation meaning a number of start-ups have been granted banking licenses in the last year means that these start-ups are about to flourish and begin massive growth. Let’s take a look at one of my favourites - Monzo. In the last year they were granted a restricted banking license and according to their roadmap (yes they've released their product roadmap for all to see) they’ll be launching their ‘full bank’ offering within 2017. Earlier this year Monzo reached £20 Million spent through them which although is a drop in the ocean compared to the 100s of billions spent by consumers each year it does show rapid growth. Here’s two infographics showing April 2016 spending and August 2016 spending - the increase is huge and can only continue upwards through 2017.

We’ve also got Atom Bank and Curve growing in the UK while Germany is a hot bed of start-up banks with N26 and solarisBank to name a few services that are growing in popularity.

2. Chat Bots & Virtual Personal Assistants

I put these two together as they use similar technologies, mainly natural language processing and to some extent machine learning (the combination often termed Artificial Intelligence (AI)). Messaging apps have, over the last few years, become a focal point with over 1 billion monthly users each on both WhatsApp and Facebook Messenger (both owned by Facebook). Since Facebook launched bots on it’s Messenger platform earlier this year the number of bots has grown to beyond 30,000. In China the use of messaging apps as a platform is nothing new, they’ve been using them for shopping, banking, taxis and more for a number of years. With it now becoming immensely easy to develop chat bots companies are beginning to realise their value, particularly in customer relationship management.

Marketing powerhouse Ogilvy & Mathers have recently gone in hard on Chat Bots with them saying “messaging platforms are the new internet, chatbots are it’s websites”. There’s a good presentation here by their Innovation Partner - James Whatley.

Personal Assistants are certainly nothing new. We’ve had Siri and OK Google for years but let’s be honest, they’ve been a bit shit. With recent developments in Natural Language Processing though they’re getting a lot better. Over the last year we’ve also seen the unexpected popularity of the Amazon Echo (Alexa) virtual personal assistant. This was one of the most popular gifts this Christmas and has mostly been sold out since it’s launch.

So now with Chat Bots and Virtual Personal Assistants we’re pretty much there with the voice recognition bar some corner cases so I think this year we’re going to see them becoming a bit more intelligent in their answering of questions and performing tasks - something they’ve been lacking so far.

3. Cellular IoT

An interesting area with huge potential is the infrastructure and services to support the Internet of Things (IoT). I believe that one of the most interesting of these infrastructure items is Cellular IoT, specifically NB-IoT (Narrowband IoT). Through 2016 we saw the 3GPP standard develop and become part of Release 13 (LTE-A Pro).

As I wrote earlier this year there are many IoT specific network technologies such as LoRa and Sigfox that do the job quite well but something they’re potentially lacking is open standardisation, Quality of Service (QoS), and coverage. So SigFox for example is proprietary, it uses unlicensed spectrum so cannot give QoS guarantees, and only has relatively limited coverage (although this is growing significantly).

NB-IoT overcomes these potential issues which for many use cases may prove to be show stoppers.

Vodafone, who are very big in the M2M (Machine-to-Machine) arena are investing heavily in NB-IoT and have spent the last year or two conducting trials and will be opening up the first networks in the latter half of 2017. They also have their eyes set on a number of critical use-cases including autonomous vehicles and drones - both of which need QoS and coverage at least.

Now I have to admit that writing this post was a bit of a struggle. As I said at the top, 2017 is going to be a strange year for a lot of tech as we sit in this odd period between major developments. Let’s see how it pans out.

My Cashless Experiment

£72,000,000,000 - the estimated value of all notes and coins in circulation in the UK. This equates to around 31 billion pieces of metal, paper, and now plastic. Wouldn’t it be great if we could get rid of all of this? Cashless societies or economies have been talked about for many years and some countries are a bit further along the path than others. Just a few weeks ago the Indian Prime Minister urged businesses and citizens to embrace digital payments saying "We can gradually move from a less-cash society to a cashless society.”

One of the leaders in this is Sweden (of course) where only 2% of all payments use cash and over half of bank branches neither accept cash deposits nor give out cash to customers.

To see how far along this path the UK is I thought I’d try a little experiment, I wanted to see how far I could get without using cash for a week. Armed with my Mondo (now Monzo) card I set off. Here’s how it went:

My experiment started on a Sunday with a trip back up to London from Southampton. I needed to get to the train station. I check Uber and there’s no cars available but I know the local taxi company accepts cards, this should be easy. We get to the train station and I asked to pay by card, the driver huffed and groaned. We sat there for a good few minutes while the card machine booted up and I got charged an extra £1 for the pleasure. Not a good start I thought.

I was hoping the rest of the week would go a bit better, particularly as I was now in London, the FinTech capital of the world.

The first test on Monday was a lunchtime trip to a cafe now known between my colleague and I as the ‘crazy Italian’ simply as it’s utter chaos in there (but the food tastes great). Anyway, I order my sandwich and go to pay but of course they don’t accept cards. Luckily my colleague lent me a tenner (which I probably still owe, sorry). Again, not a great start to the week.

Tuesday was a rainy day so it was lunch in the office canteen, unfortunately. Here they do accept cards although there’s a £3.50 minimum spend. Not great I’ll take it.

After just a few days in I wasn’t feeling hopeful. Lunch for Wednesday was at a local bakery which amazingly accepted card payments - YAY!!! The day ended with an evening in Hyde Park’s Winter Wonderland. Getting their on the tube was super easy just using contactless at the station barriers but of course nowhere in Winter Wonderland accepted cards - it was a trip to find one of only a few cashpoints on the site.

By Thursday I was really not feeling great (and not because of a hangover) about the experiment. Only twice so far (baguette shop and tube) had I had a nice and easy cashless experience. The day consisted of various meetings around London, travelling via tubes and buses - again super easy with contactless. One of the meetings was in a nice little coffee shop, we order our drinks and then realise they don’t accept cards. Neither of us had cash so we had to go to Pret next door. I was getting really bored of this experiment by now.

Finally, the last day. It was straight to the pub after work where thankfully they welcome card payments. I don’t remember what happened the rest of the evening :)

So what I thought was going to be a nice, interesting experiment turned out to be pretty rubbish. I had high hopes for London’s small businesses. I mean it is 2016 in the financial capital of the world.

I learnt that week that we’ve got a long way to go before the UK becomes a cashless society. Oh well.

A Month with Mondo

UK FinTech (Financial Technology) is on fire at the moment and one of the start-ups at the forefront is a challenger bank called Mondo. Mondo is still a relatively small start-up with somewhere in the region of £7 million of Venture Capital funding with Eileen Burbidge's Passion Capital funding £6 million and the other £1 million being raised in a record breaking 96 seconds on Crowdcube earlier this year. Mondo is currently in Beta with apparently around 20,000 customers and a waiting list even longer. Now Mondo isn’t a bank just yet and as such gives customers what is essentially a pre-pay MasterCard but they say they aim to get their banking license (at least a restricted one) in a few months time. What the Mondo Beta has shown so far though is a glimpse in to the future of banking and I have to say it’s quite bright.

To understand why Mondo is great, oh and this isn’t in any way sponsored by the way, Mondo won’t know I’ve published this post unless they read it themselves here, you have to look at what is wrong with the traditional banks and it all ultimately boils down to the fact that they don’t understand mobile and they don’t understand UX (User Experience).

The traditional banks saw mobile as a way to simply provide a bank statement, in fact, if you look at your mobile banking app it’s pretty much the same as getting a paper statement in the post in that it’s just a list of transactions, search is limited if it exists at all, and if you want to do anything even mildly useful you generally have to logon to the desktop website or even phone them (what the?).

Mondo, like most start-ups, have adopted a mobile first philosophy. They don’t have a banking website and they don’t have phone banking either and why would they? Everything you could ever need to do is or at least will be done through the app, and that is one of the major things missing from traditional banks. If you read some of the Mondo founder’s blog posts and listen to/watch some of his interviews then you’ll notice that the way they think about mobile is completely different to traditional banks, for example, using your mobile’s location services to determine whether or not transactions are fraudulent i.e. if your phone is in the same location as the transaction it probably isn’t fraudulent - particularly useful when you’re abroad. Mondo seem to realise that mobile allows them to overcome some of the biggest annoyances we have with consumer banking.

It’s not just their attitude to mobile that makes them great though, it’s their entire ethos to customer experience. A recent trip to Paris is a perfect example. My traditional bank charge a 2.75% fee for non-sterling transactions and another 2% fee for using a cashpoint abroad - crazy right? Mondo don’t charge a penny for either. This completely changed the way I travel. I used to search online for the best exchange rates, order currency online and then go to a physical store to get a big wod of cash - hundreds of Euros or Dollars. Now you’d never have £400 in cash when you’re at home (unless you want to be mistaken for a drug dealer perhaps) but somehow we do it when we're on holiday. Well as you can imagine with Mondo I didn’t need to do any of that, I behaved as I do at home and paid for 99% of things with my card and had about €20 in my wallet for those few times I needed cash. What’s more I could see immediately what the cost in both £ and € was straight on the app. You get none of this transparent experience with a traditional bank.

There’s a few other really good features of Mondo too. Merchant info is crowd sourced, you can see your entire history with a merchant including total and average expenditure in just a tap. If you misplace your card you can freeze it immediately from within the app. You get a breakdown of your monthly expenditure by category, and you can manually change the category of each transaction individually. Search though is one of the major features of the Mondo app for me. Search in Mondo seems to use somewhat of a natural language processing technique to allow search over time periods, locations, merchants, category and more just be typing. So, a search for ‘Lunch in London last month’ will show all transactions marked as ‘Lunch’ that happened in June and that look place in London.

Mondo also provide an API for 3rd party app developers to interact with the platform and develop new tools.

Now that I’ve banged on about all the good things I do of course have to discuss some of the improvements that need to happen. Something that’s missing but seems really simple is a low balance notification with an action to top-up the card. I’ve had multiple occasions where the card has declined due to insufficient funds. It would be great if there were a ‘suggested top-up amount’ based on previous spending habits and perhaps an auto top-up option.

Another major let down is the lack of Apple Pay. There’re a lot of things I don’t use Mondo for because I can’t use Apple Pay. For example, I use Deliveroo almost daily and pay on their using Apple Pay just because it’s the most convenient and secure method. Same with Uber, same with Tesco. Apple Pay is on the roadmap for Mondo but I’m amazed that such a mobile focussed company hasn’t supported Apple (and Android) Pay since the start.

Next up is London Transport payments, they’re confusing AF. For some reason Mondo shows all of Transport for London’s ‘active card checks’ and seemingly all sorts of other transactions that ultimately become you’re actual tube fare. This means that various transactions appear, disappear and change over the course of a couple of days. Please Mondo just show the actual fare.

User authentication is also missing which seems to be a bit strange. There’s no app login at all. This means if someone is using my phone, whether I’ve let them use it or otherwise they can just tap the app and see all of my transactions and freeze my card. You do need to know the card’s PIN to transfer money though. This isn’t necessarily a major issue as if I’ve let someone use my phone I probably trust them and if it got stolen they’d need to know my phone’s unlock code or have my fingerprint (if they had either of these I think them being able to see what I spent in Waitrose would be the least of my worries). It does just seem a little relaxed on the security/privacy side.

Just as I was about to post this they updated the app to include TouchID login.

Something I haven’t tried/need to use yet is the customer service side to Mondo. With what I’m presuming is a relatively small team I’m not sure how good it’d be in particularly urgent situations. In fact the app does say ‘… we try to get back to you within the hour, evenings and weekends may take a bit longer.’. I could see many people being put off by this and actually finding it quite concerning that they can’t speak to/message somebody immediately, particularly as Mondo is dealing with people’s personal finances.

So as I said at the start of this post Mondo has so far given a really good insight in to what the future of consumer banking should look like. I’ll certainly continue using it and I’m looking forward to seeing new and useful features.

Now I should also say that Mondo aren’t the only ones doing this. If you have a read of my previous post you’ll see there’s quite a few other. In fact, I’ve just received an invite for Atom Bank which I’ll to try out.

Have you tried Mondo or another Challenger Bank? What did you think? Comment below.

Should the High Street Banks be worried?

The internet, coupled with mobile, has been a force to be reckoned with for almost every industry. Travel Agents have been made obsolete by Expedia, SkyScanner, Kayak and a whole host of others. The traditional taxi business has been massively disrupted by Uber and Lyft. Retail is now a very different beast thanks to the likes of Amazon. Newspapers, TV, Fast Food, Music, Hotels, the list could go on and on. There are however a few industries that are yet to really feel mobile internet's effects and one of these is banking (automotive is another but that post is coming soon). For as long as I can remember there's been one constant on the British High Street - the 'Big Four'. The 'Big Four' is a term given to the four biggest banks in the UK, these are Barclays, HSBC, Lloyds, RBS, and between them these banks own around 75% of the market [1]. This general lack of competition is bad for consumers as there's little incentive for any of these incumbents to change or do anything particularly different. In fact, if you look through their offerings not one of them stands out as giving anything above the rest.

Thankfully this might be about to change. There's a big, and quickly growing appetite by young and innovative start-ups to disrupt the old and traditional banking industry. These start-ups under the umbrella term of 'Fintech' are being built from the ground up with large investment from Venture Capitalists. They have none of the baggage that the incumbents have such as large overheads and legacy systems.

This new breed of financial business understands the frustrations and annoyances that a generation who have grown up with technology at their fingertips have. Companies such as Monese, Mondo and Atom are building banks made for the smartphone. They don't have branches, they don't even have website banking, everything is done from your smartphone. The sign-up process is made so simple, you sign-up on your mobile and scan your ID for verification which means you don't have to go into a branch to set-up your account as you would now with the legacy banks. Transfers abroad? No problem, all done from your phone and with zero fees. Going on holiday? No need to get foreign currency, just use your card as you normally would and pay no fees for foreign transactions.

It is this ease of use and transparency that the smartphone generation really understands and wants from everything they use, and why shouldn't they?

Unfortunately though this isn't something the high street bank seems to understand, and those that do can't do anything about it due to their legacy systems and costs and risks associated with building new ones at their scale [2].

"Replacing that tech is just so risky that no one else is going to try to do it. It is a multi, multi billion pound project that is going to take five to ten years, and even then risk failure." - Tom Blomfield, Monese CEO.

I recently switched to a bank that is supposedly 'different from the rest'. Except it isn't really. The app is horrible to use - it's design is terrible and if I want to do anything more than view my balance or transfer money to an existing payee I have to login to their website which takes about a million hours to get through the security (seriously, it's ridiculous). To set-up Apple Pay I had to phone them, yes actually speak to a human being who asked for my every intimate detail just to complete an action that should be so simple.

As I mentioned earlier, it is these annoyances that the start-ups understand and can use technology to do something about.

It's not just the high street bank that's being disrupted either. A whole range of financial services are being switched to mobile. Take Curve for example. Curve is a service that puts all of your cards in to one and guess what, it's all controlled from your mobile. Just scan all of your cards including Visa, MasterCard and American Express and set one as your default. Then just use your Curve card (which is a MasterCard) anywhere. If you want to use a different card just select it in the app. You can even use your American Express in places that don't accept it, and importantly get the same rewards and protections. It even lets you get cash from your credit card without paying fees.

Investments and stock market trading are another financial services area being disrupted. Take a look at Nutmeg or Robinhood who are offering free or very low rate investment and trading platforms all built around simple and easy to use mobile apps.

So, back to the exam question, should the high street banks be worried? Absolutely.

What do you think of the current banking industry, can it change and keep-up? Leave your comments below.

If you enjoyed this article or found it useful please do hit like and share :)

Sources:

[1] http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/11212515/Full-investigation-into-the-dominance-of-big-four-UK-banks-confirmed.html

[2] http://www.techworld.com/mobile/mondo-ceo-tom-blomfield-explains-how-build-next-generation-digital-bank-3618866/3/