Banking On New Technology

Posted by Peter Cochrane on September 12, 2005

12th September 2005
On one level the year 2010 doesn't seem all that far away, and yet on another it might as well be 50 and not 5 years on. Such is the rate of our technological innovation no one can predict with accuracy just what the 2005 outcome will be. But we know two things for certain! First, there will be more of what we already have, and it will be smaller, lighter, more powerful, have more features whilst being be a lot cheaper and even more ubiquitous than today. Second, all the really new technology coming to market before and up to 2005 is in the laboratories and development shops of the world right now.

So, apparently all we have to do is go out there and look and all will be obvious. Well, no quite! The biggest variable in the equation is us, and it turns out to be impossible to predict what we will do with technology once it is available. Text and Multi-Media Messaging are two good examples. TXT was never introduced as a service; it was an engineering utility. Once discovered by young people it took off without any marketing or promotional effort to become the number one service provided by mobile operators. In contrast, Multi-Media Messaging has enjoyed huge amounts of promotion and so far is a profound failure. In short, customers now decide, they pick and choose; they are in control and dictate what's hot and what's not!

So just what is in the labs and emerging as key technologies right now? The list is very long, and within the limits of this article my favourites are: WiFi, WiMax, BlueTooth, Ultra-Wideband (UWB), RFID, Voice Over IP (VOIP), BridgeWare and Biometrics. Why are these important? Many banking customers are already using WiFi, BlueTooth and VOIP, but not when they communicate with their bank. And many are also in the know and thinking about how to take advantage of many more leading edge technologies.

Before we briefly examine these in turn it is worth noting that the coming of the PC, Modem, Mobile Phone and the Internet has also seen an important transition from a DIFM (Do IT For Me) to a DIY (Do IT Yourself) world. Sure enough some company provides the backbone service (or not!) but people provide and manage their own software, systems and services. This might seem insignificant, but to my mind it is a mega-change, and all empowering for the end user.

Do your children enjoy Tech and Security Support Services? Think about IT! By 2005 many IT and Security Departments will have gone the same way as the typing pool for the same reasons!

WiFi is a short range (~30m) Wireless LAN standard now being used worldwide to provide high-speed access for lap-tops and PDAs on the hoof. Sometimes you pay for service and sometimes it is free. In San Jose CA for example it is largely free, in London however you mostly you have to pay.

WiMax is perhaps best thought of as a longer range WiFi (~10km) using a different signalling format to link WiFi nodes and other remote devices into networks. The standard has yet to be ratified but early trials are under way.

BlueTooth is a very short range (~2m) Personal Area Networking (PAN) technology most prominently used for cordless headsets, but it can also be used to link appliances of all kinds in the home, office and workplace. So far the take up in the latter respect has been slow and limited.

Ultra-WideBand (UWB) really is BlueTooth on steroids giving ~100x the bit rate over short distances. If someone tells you it will do 1Gbit/s over 20km don't believe it, 2m is more realistic! This is a technology destined to link computers, displays, hard drives, and mobile devices when you want to move massive movie, music files or heavyweight documents.

RFID is destined to revolutionise the entire supply and service chain by replacing all bar codes, production, delivery, service and support documentation. Right now it is under trial in the retail, logistic, pharma, and hospital sectors. In the extreme an RFID tag will be able to tell you everything about a hospital patient and their treatment, or where raw materials originate, what company supplied what and when, where and how things were manufactured, who tested them, their route through the production process, test data, through to the delivery and sale, customer and ongoing support including usage records.

VOIP has been around for about 10 years and is just starting to take off. Having the combined facility of a hifi audio channel and Instant Messaging from a PC, LapTop, PDA or special handset connected via a LAN or WLAN takes people to a place beyond the telephone call. It is different, it is better, and people tend to just open up a channel and communicate in a way they never did before because of the quality and zero connection cost.

This technology does something that Hollywood figured out a long time ago and the Telcos still haven't - the most important bits are the emotional bits - speech quality really does matter! And this is especially true when dealing with customers - it changes the relationship! So, is there a downside? Yes! The Internet/Intranet (IPNets) were never designed to support real time services such as speech. So depending on the routing of the connection and the amount of traffic, VOIP is either brilliant or crap and nothing much in between. So far it seems to be predominantly brilliant!

BridgeWare provides the integrating hardware and software to realize apparent operational compatibility across diverse fixed and mobile systems and platforms. It is the glue that allows companies to merge seamlessly or fuse joint operations. To date most systems have been deployed in the defence sector.

Biometrics includes anything and everything about us that is unique from fingerprints, iris scans, facial features and DNA samples to the way we walk, talk, type and generally behave. A catalogue of features can be concatenated to give a very high probability to our correct identification.

It is easy for a mobile phone company to become a bank, but impossible for a bank to become a mobile phone company!

As individual technologies these are all interesting, but it is when we contemplate them being used in conjunction that things get really interesting. In 2010 we might expect to approach the Electronic Point of Sale (EPOS) at Tesco, Asda or Sainsbury to find it unmanned. RFID on all the goods and mobile phones has changed everything - we just walk through and a display shows our itemised bill, we hit accept on our mobile phone, which is BlueTooth linked to the store billing system, and we are free to leave. The mobile has become our wallet and card.

How about security? Well if our appearance, clothing and belongings that are RFI tagged, and our actions (Biometrics), don't line up with our phone and store record, then probably a thief is at work. If some items are secreted in a pocket instead of the shopping basket, they can be identified, and we probably have a shoplifter. Of course, the system can be fooled, any system can, but by 2010 the security bar will have been raised considerably by combinations of new technologies.

Now there is much more! RFID will dictate a need for more bandwidth at the EPOS, and because the chip set includes WiFi, BlueTooth, and perhaps UWB, it now becomes a point of communication for every form of electronic device we carry. Mobile phones will offer VOIP calls for free or at <10% of the mobile networks, via WiFi and/or BlueTooth. The same will be true for PDAs and LapTops, and there will be a new slew of services for iPods and Cameras. Advertising and services while you shop will become the norm, and supermarkets will encroach further into the traditional markets of insurance and banking, whilst creating many new markets of their own that will inaccessible to others.

So this leaves us with one big question; will banks be using these technologies to provide a better customer interface, and if they do, what will their new service offerings be?

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