It is hard not to pick up a newspaper these days without reading about an iPad, e-Reader or other mobile device that looks set to transform the way people will read.
Publications as diverse as the Sunday Times and Rolling Stone magazine are taking the emergence of this new technology as an opportunity to try to repair the damage done to their historic business models by the “content is free, advertising pays” mantra of the internet. The new message appears to be “quality costs”.
It remains to be seen if enough people will be prepared to pay for quality to offset the inevitable decline in advertising spend that publications erecting socalled pay walls around their websites will suffer. But when it comes to the cash-rich, time-poor highnet-worth community targeted by so much of the financial services sector, the use of advisers clearly shows a willingness to pay for quality, given the right proposition.
In recent months, I have seen a small but growing number of companies designing services to take advantage of the opportunities arising from mobile media, m-commerce, e-readers, iPads and the like.
By delivering highly functional, content-rich interactive services both to support traditional advice and deliver it as a standalone, these companies are building big commercial advantages over those whose dogma does not allow them to think beyond 20th century processes.
Not surprisingly, the level of online services provided is one of the first things I look at when considering a new financial services product but I am increasingly finding myself asking how obtrusive the provider’s security is.
With virtually every business from utility providers to cinemas looking to go paperless to cut the cost of mailing millions of letters each year, like many others, I am having to navigate an array of different security systems to access my own information. It is hard not to find this frustrating.
As each organisation’s security specialists demand that I remember a host of different IDs in various formats – some requiring physical devices, some not – there are many relationships I do not maintain. If the security mechanism is too unfriendly, the company is unlikely to sell it to me.
This was brought home to me earlier this year when I realised I had an Isa that I have not accessed online for a couple of years. Even with the new provider I selected, I am unsure if it will keep my money. The rest of the proposition is very attractive but I am far from convinced if I will find it practical to remember all the information required of me. If not, it will be time for a transfer next year.
It is important to understand the brand damage that overly aggressive security can cause. In the past few years, I have come to the conclusion that there are some financial organisations it is simply not worth doing business with because the security makes their services unusable from any practical perspective.
There are some financial organisationsit is simply not worth doing businesswith because the security makes their services unusable from any practical perspective
I would never enter into new financial arrangements with either Barclays or Leeds Building Society because of the absurd levels of security they impose on a Leeds Building Society credit card.
Tempting though it is to turn this column into a summary of the frequently obstructive customer service I have suffered at the hands of Barclays in the name of security, I will limit my comments to the observation that if you make it difficult for customers to deal with you enough times, however good your product may be in other respects, you will succeed in driving them away.
For cash-rich, time-poor consumers, putting unwieldy security mechanisms between customers and their money is a great way to get them to abandon you as a supplier. Barclays and Leeds are probably not the only organisations that need to learn this. At the same time, if your security is sufficiently user-friendly, this can be a great way to achieve a bigger share of the customer’s wallet.
While not for one moment advocating a weakening of security, I believe there is increasing evidence to show that getting the right balance can make a huge difference to a competitive position.
Online services, especially when delivered via content-rich devices, can provide customers with a far more informed experience. With a greater number of people expecting to see bigger quantities of information in one place, this creates a massive opportunity. It will, however, be dependent on finding the right balance between security that is entirely effective while not becoming a barrier to adoption or usability.
The online access to information that is currently being delivered by virtually all investment product providers and advisers looks embarrassing compared with the equivalent access from banking institutions that have been offering detailed web facilities 24/7 for more than a decade.
In addressing this shortcoming, our industry must avoid the mistake some banks are beginning to make – of locking information up so tightly that not even the client can get to it.
Ian McKenna is director of the Finance & Technology Research Centre