To paraphrase the now famous McKinsey report on the “Wal-mart Effect”, “the great economic boost in productivity in the late 20th century didn’t come from the introduction of new and innovative internet or web technologies… it came from their practical application in boring and mundane industries.” Just ask Wal-mart: Computers, Networked Communications, Wireless Technology, Bar Code Scanning, Inventory Control and Accounting Systems had been around for multiple decades before Wal-mart figured out how to perfect their use. They weren’t the first to employ them. Sears, JC Penny’s, K-Mart, Macy’s, Montgomery Wards, Service Merchandise, Belk and countless others had all introduced those technologies, many even decades before Wal-mart “figured it out”.
I believe the telecommunications (specifically the broadband wireless and internet) and banking and finance industries (specifically payments and reputations) are at such a convergent “new way of doing things” tipping point as well. The card brands (Visa, MasterCard, Discover and American Express) have had nearly 50 years to till the ground and make it fertile for a universal payment device. Looking at the rapid (dare I say meteoric) expansion of China Union Pay and the emergent alternative brands like PayPal and OboPay, I’d say we’re poised for a payment brand shoot-out. Visa and MasterCard have enjoyed a significant duopoly for a good 30 years now and their relatively recent change in for-profit status dictates increased competition and differentiation.
Add to that the banks and their consolidation, they search for value and differentiation and their general “missing the boat” with respect to demography, marketing acumen and reputational integrity, many Millennials are looking at their pre-paid Payroll cards, local Wal-mart Money Center’s or 7-Eleven Holding’s corner market and wondering what’s the point of a bank, when their local mall kiosk, or the phone in their pocket can give them access to remote deposit and check capture, loans and mortgage options (like LendingTree), their credit union, money market account, alternative payment brand (think PayPal) or institutional trading account (like E*trade) and gives them everything they want or need in terms of financial services.
I think we are ready to do IT differently.
