Saturday, May 5, 2012
The post-pc revolution has firmly conquered the world. Just two years ago, tablet devices like Apple's iPad were considered extravagant toys and luxury items reserved for the technological elite. Today, they have become ubiquitous objects of daily life for millions of citizens around the world, who use their tablet for anything from reading their morning paper to browsing the web for bargains, from doing business presentations to checking their emails. And yet, as popular as they may have become for many different activities, banking hasn't as yet caught on with iPad owners. This may now stand to change, if one is to believe a report by consulting firm Javelin Strategy & Research, which claims that the big four – Apple, Google, Amazon and Facebook – are looking for way of solidifying their leading positions by branching out into new opportunities on the post-pc market. One of the most lucrative of them is, without a doubt, post-pc banking – and should Apple, Google and Co really set their eye on it, there may be considerable advantages.
Do we need another revolution?
Why should there be need for a banking revolution at all? There are hundreds of reasons, really, from unhelpful clerks to high fees. Most importantly, however, over the last few years, there has been a sharp reduction in the amount of credit given to people. This is due to a huge economic downturn and has resulted in mass unemployment, a rise in the cost of living and entire countries needing a bail out from other countries. The cause of this is being put down to the banks risking too much money on bad investments amongst other things. A massive ripple effect was felt around the world and the average person felt the pinch. Unemployment increased and as a result people were unable to pay their bills. This hit people really hard, particularly people who had never missed a payment in their lives. This meant that people who had had a previously excellent credit history found themselves with a poor credit score and unable to get credit. The banks became reluctant to lend money to people or even let them open a bank account. The post-pc banking revolution may soon get the balance right again.
Signs of bigger things to comeThe introduction of guaranteed online bank accounts was an important first harbinger of the post-pc revolution. These were bank accounts originally created for bad credit customers such as those who have a poor credit history or perhaps no credit history at all. Traditional banks would consider these customers bad credit customers because they may have defaulted on previous debt repayments or they may have had no credit history at all through no fault of their own. And yet, many of them were thoroughly prepared to make a clean start and begin budgeting wisely. This is why new financial institutions began offering guaranteed accounts, which provide customers with basic banking facilities, allowing them to withdraw and deposit money, set up direct debits and standing orders as well as use ATM machines. The distinct advantage of this type of bank account for bad credit customers is that one is guaranteed to be accepted regardless of one's credit rating or even if you are bankrupt. And yet, almost as a side effect, many were discovering that applying for these basic bank account online actually had some inbuilt benefits over traditional current accounts: Their budget support facilities made it easier to avoid piling up debt and their online banking portals allowed users to take their finances into their own hand. Especially at a time, when words like ebanking or mobile banking were still foreign vocabulary to many old-school high street banks, the technological convenience of these accounts convinced even better-off citizens to make the transition.
New models, new opportunitiesIn many respects, guaranteed accounts have led the way for the entire banking industry and may now come to herald the post-pc banking revolution:
- As guaranteed accounts have demonstrated, customers excluded from traditional banking do not need to be risky customers per se. Given the right bank account and banking conditions, both sides stand to gain something.
- Banking has long been considered as being inherently different from all other industries. This is gradually turning out to be a fallacy. Customers do place great importance on safety when it comes to setting up standing orders or transferring money. But they also greatly value convenience and ease of use. Tablets can transform not just the way banking works, but also transform banks while doing so. In the future, banks will have to change from being cold financial institutions to more customer-oriented organisations. As a result of this process, the barriers of entry will most likely be reduced and application procedures be streamlined.
- As more and more people are convinced by the benefits of online banking, physical branches will quickly begin to disappear. With many traditional banking web portals still feeling very cool and clinical, tablets can play an important role in creating a more personal rapport and bond between banks and account holders.
This article was written in association with eccount, a leading service provider in the field of online banking.
William Masters is a finance journalist from London. Image is licensed from PhotoDune.net.