Financial Services: Gearing up for a new era

I just came across a survey by Deloitte about the future landscape of financial services. The survey is based on inputs from over 200 financial services executives from all over the world. It covers how the financial crisis and economic downturn has impacted the thought process, practices and strategies of banks and other financial institutions.

The impact of the crisis - damaged relations, curtailed performances and disrupted services - have been revealed in terms of statistics. It also focuses on the key focus areas for banks and other institutions as they try to make up for the lost ground.

The survey results make an interesting read. You can read more by following this link.

For me the key takeaways were regarding the future strategies that banks suggest they will adopt to gain a competitive position by taking advantage of the very little opportunity that this adversity had brought along. The three important aspects (no surprises here) of the new strategy that banks have identified are:

1)     Improving Customer Experience

2)     Risk Management

3)     New Product development

A picture is worth a thousand words, so here are snapshots of some of the survey results. 

The changing dynamics of worlds Banking Industry

Recently I came across an interesting little piece of stati.stic and I figured it is worth pondering over.

The statistic that I came across is the “The World's Top 20 Banks 1994-2010” list. Here is a good snapshot of how the banking industry has metamorphosed over the course of the last 2 decades.

A lot has changed in these two decades. In the early part of the 90’s the Japanese ruled the world, a fact well corroborated by the fact that in 1994 top 6 banks were all from Japan and no less than 11 banks from Japan figured in the top 20 (Phew! That’s more than half of the list). But soon the Japanese economy broke down and their banking system fell apart. The Japanese presence on the world’s banking sector has never been same since then, the very fact that in 2010 only one Japanese bank figures in the top 20 sums up their sorry plight.

The growth story of America banking institutions to become the dominant force today is equally remarkable. Back in 94 only two American banks belonged to the top 20 but since 1999 they have always had a strong presence with at least 4 banks in the top 20. The transition from 2008 to 2010 is the most fascinating part of the statistic above. Since the Japanese economic turmoil had led to the ultimate downfall of its banks one would have expected the recent economic downturn (which initiated in America and had the most adverse impact there) to have the same effect on American banks. Apparently, that hasn’t quite happened. On the contrary from 2008 to 2010 the American banking industry only got stronger. It seems that the heavy government intervention did indeed save these American banks and maybe even gave them a competitive edge.

Another noteworthy fact that this statistic presents is the rise of China. Anyone notice that? Just for the record, I won’t hesitate to place my bet on seeing 5 Chinese banks in this list 4 years from now. On a different note, I would have loved to see the SBI on this list some day!

Source : Chris Skinner, the Financial Services Club and The Banker Magazine (with permission)

Want to take control of your money? Get fresh, get Mint!

Ever since I got my first paycheck I have been tracking where my money went. It started with the good old excel spreadsheet, the first one that I created relied on manual inputs. I have a fascination for numbers, charts and statistics so despite the pain of having to manually key in my income and expense I did persist with my tracking spreadsheet.  After a few months the lure of more advanced charts and excel macros got to me and I ended up downloading a template. This made my tracking sheet look good, but I still had to enter the data manually.

Later I realized that instead of manually keying the data I could download the monthly statements from my financial institutions and have an excel macro make sense of the data. This was a great improvement over the first spreadsheet, but it always needed some manual correction. On top of it the fact that each of my accounts had a different statement date made it kind of a weekly task for me, and I wasn’t too pleased with it.

Then came Quicken, it was the first (and only one till now) personal budgeting software which I paid for. It did prove worthy of every penny that I invested in it. It could fetch data from all my accounts automatically on a daily basis, help me create detailed budgets, project future balances based on trends, consolidate all my investment accounts and so much more. I thought this was the tool that I was always looking for; tracking my finances was so much easier with Quicken. But it did have a few problems: sometimes it would not fetch data from a few accounts, sometimes it lost the past transactions, sometimes it would not be able to differentiate between a transfer & a payment. All this was trivial but I expected more from a paid service.

After using Quicken for a year I started researching for a better tool. By this time all major banks had added a new feature in their online banking, you could get a consolidated view of all your accounts at one place within your online banking page. But it was very basic, did not have detailed budgeting options, trends, charts or predictions. This is when I accidentally stumbled upon Mint and since that date I haven’t looked back.

I think Mint is the best personal budgeting application out there. It’s all online, the signup process is a breeze, they cover almost all the financial institutions in US and have a sophisticated categorization and matching algorithm which makes managing money so much easier. The way they depict the trends with the use of charts is so cool and the budgeting is not primitive either. In two years I have never had a problem with it.  To top it, they have apps for your smartphone that is equally amazing. Although it doesn’t offer all the online features it does everything that you would probably have wanted to do on your phone.

Some people are concerned about the security about such a service. Mint is owned by Intuit now, it’s a read only service, you can register anonymously without providing personal information and they use the latest security protocols that leading banks use now.  So in my opinion they are no less secure than these institutions. If you feel good about the security of your online banking I bet you should feel safe with Mint.

If you are looking forward to a better way to manage and track your money, do give it a shot. I am sure you will not regret it. And what’s best …it’s free!