Foreword xiii
Preface xv
Acknowledgments xix
INTRODUCTION
Innovating through Scarcity 1
The Influence of Cloud on Innovation 3
The Influence of Smartphones 4
Big Data = Big Driver of Innovation 4
Taking a Cue from Retailing 5
The Enemy of My Enemy Is My Friend 6
Reconciling Innovation and Regulation 6
In Search of New Payment Revenue Streams 8
New Skill Sets for a New Era 9
A Road Map for This Book 9
Notes 11
CHAPTER 1 Consumer Empowerment Knocking at the Door 13
How Mobile Is Reshaping Consumer Expectations in Financial and Retail
How Mobile Is Changing Consumer Behavior 15
Mobile Is Blurring the Lines between Digital and Physical 17
Mobile Learnings from PayPal and Square 19
Mobile Commerce through Tokenization 27
The Mobile Camera—It’s Not Just for Pictures Anymore! 29
The Mobile Microphone—Offers and Payments through Soundwaves! 30
NFC’s Rebound and the Promise of Host Card Emulation 31
Apple’s Passbook 33
The Apps Phenomenon 35
The Uber-ization of Mobile 36
“Top of Wallet” to “Top of Mobile” 38
The Case of Braintree and Simple 39
The QR Code 40
What Banks Can Learn from Starbucks 41
Leveling the Playing Field with LevelUp 43
From Mobile Banking to Tablet Banking 45
Mobile Models for the Emerging Markets 47
What’s Next? More of the Same 51
Notes 52
CHAPTER 2 Social and Financial Services 55
Maintaining Relationships and Relevance through Social strategies
Digital, Data, and the Future of Banking 58
Social Media Experiences in Banking 60
Gamification 62
Personal Financial Relationship Mapping 63
Capitalizing on Social Banking 65
Moven: Delivering Banking through Social Context 66
Social Banking in Europe and Asia 70
Social Login, Sharing, and Top of Wallet 71
Peer-to-Peer Lending: Blending Social and Banking 73
Beyond the Hype: Partnering for the Future with Peer-to-Peer Lenders 74
Lending Club: A Win-Win for Banks and Their Customers 75
Takeaways for Banks 79
An Investor’s Perspective on Social Banking and the Emergence of Bitcoin 80
Message To Banks: Be a Smaller Part of a Bigger Pie 85
Notes 86
CHAPTER 3 Connected Financial Commerce 89
Location-Based Services, Mobile Commerce, and Digital Wallets
The “Local” Digital Wallet 91
The New Retail Experience 91
Retail 2.0 and Its Effect on Payments 93
Entrepreneurs, Developers, and Financial Services 95
Context Banking: The Next Step 96
Low-Energy Bluetooth, Hardware, and the Future of Commerce 97
iBeacon and EasyPay: The Future of In-Store Payments? 98
PayPal’s iBeacon: Proximity and Context 100
Google Glass for Finances 101
In Search of the Digital Wallet 102
Personal Financial Management 103
Coupons 104
Shopping Tools 104
Loyalty and Prepaid 104
Tickets and Passes 105
The Who’s Who of Digital Wallets 106
Google 107
LifeLock (formerly Lemon Wallet) 108
PayPal 109
Carriers 110
Retailers 111
Square Wallet 113
What’s Next? 113
Notes 114
CHAPTER 4 Innovating with Big Data and Open Platforms 115
Competing in a World of Unlimited Data and Storage
The Rise of Platform Services 121
Application Programming Interfaces (APIs) for Online and Mobile Commerce 122
Coping Strategies for Banks 123
PayPal’s Bold Bet: Unleashing Innovation through an Open Platform 125
App Stores for Banks: Will It Work? 133
What’s Next? 139
Notes 141
CHAPTER 5 Math-Based Currencies 143
How Bitcoin May Prove Transformational to the Financial Services Industry
Entering the Age of Context 143
Intro to Math-Based Currencies 146
Why “Math-Based Currencies”? 147
MBCs Are a Reality 147
History of Digital Currencies 148
Math-Based Currency Characteristics 148
Bitcoin: The First MBC 149
Bitcoin’s Brief History 150
Is It Bitcoin, bitcoin, or Just BTC 150
Bitcoin Is a Powerful Concept 150
How Bitcoin Works 152
Digging Bitcoin 154
Digital Push Payments 156
Counterfeiting No More 156
MBCs Enable Programmable Money 156
Completing the Bitcoin Ecosystem 157
Bitcoin Exchanges 158
Bitcoin Wallets—Where to Store Your BTC 159
Mobile Wallets 159
Cloud-Based Wallets 159
Bitcoin Hardware Wallet 160
Bitcoin Vaults 160
Trading Platforms 160
Bitcoin Use Cases in Payments 161
MBCs as Payment Rails 161
B2B Payments—The Known Counterparty 162
Bitcoin and Consumer Payments 162
Buy Me a Beer 163
E-Commerce and MBCs 163
Getting Harder: Music and Video 164
Challenges at the POS 164
Improving Bitcoin Processes 164
Improving the Bitcoin Protocol 164
Programming Bitcoin for a Special Case: Online Micropayments 166
Wallets 167
Ripple: The Second MBC 167
MBC Use Cases in Banking 168
International Remittance Rails 168
Interbank Settlement 169
Building Trust with MBCs 170
Automating Transaction Policies 171
Moving Ahead with MBCs 172
Conclusion 174
CHAPTER 6 177
The Smart Pipe
Models that Will Survive the Next Generation The Prepaid Model 178
Prepaid Nation: Redefi ning What a Bank Can Be 179
The “Underbanked” and Opportunities for Innovation 184
Stockpile: An Example of Brokerage Innovation Through Partnering 185
MoneyGram: An Example of Innovation through Partnering 186
Innovative Ways to Expand Access—PayNearMe 189
How Innovative Banks Are Partnering for Innovation 190
The CEO-CIO Relationship Driving the Innovation of ING DIRECT Canada 190
A Whole New Era 193
How Banks Can Compete in the Future 194
Three Imperatives to Partner for Innovation 196
A Venture Capitalist’s Look at the Future of Banking 198
Technology as an Enabler and Partner 205
What the Next 50 Years Might Hold 206
Digital 207
Relationship Management 207
Platform and Identity Friendly 208
The Future Bank Bundle: Platform-Relationship-Utility 208
Notes 209
About the Author 211
Index 213
