While banking was once char­ac­ter­ized by quaint fea­tures such as the ability to stroll down to the neigh­bor­hood branch, where the tellers knew your name and might even give your child a lol­lypop, the com­bi­na­tion of com­pe­ti­tion in the industry and advances in tech­nology has fos­tered the simul­ta­neous decline in face-​​to-​​face cus­tomer ser­vice and rise of elec­tronic account man­age­ment.  We’re now seeing paper checks make way to pre­paid cards, banks offering online-​​only ser­vices in greater num­bers, and a rapidly growing market for mobile wal­lets, among a number of other notable changes to the tools of the trade.

Harlan Platt (Pro­fessor of Finance – North­eastern University’s D’Amore-McKim School of Business):

I think the evi­dence, based on the slow adop­tion of this existing tech­nology, is that people do not trust it. There is some­thing mag­ical about waving your phone and buying some­thing even though tech­no­log­i­cally it is very close to waving your credit card. I sus­pect it will require a busi­ness model in which con­sumers actu­ally get some­thing back from using their phones as pay­ment vehi­cles, much like banks that offer 1 or 2% cash back’s now for credit cards. … [Banks] will [also] need to pro­vide guar­an­tees that scam­mers won’t pilfer the tech­nology and cost con­sumers money.

 

Read the article at →