According to a MS FinServ blog post last week, banks will be restarting their innovation using new technology.
Its great to see that some banks are going to start focusing on the use of technology again. New account opening and currency exchange mentioned in the FinServ post are two areas that all financial institutions should have been concentrating for Anti-Money Laundering (AML) purposes over the last few years anyway, and technology should have been core to this. But in many cases the customer has not see any benefit.
Why are some banks looking at it now? Probably because they are seeing far greater immigration into the US of students and skilled professionals from Asia, and if they can attract a large number of them it would greatly improve their market share.
These new customers will most likely be attracted by the ease of transfering money to or from family overseas, opening a new account and getting credit.
I know from my own experience moving to Boston from the UK that:
- transferring money was not hard but extremely expensive, partly due to the paperwork involved (AML CTR requirements)
- getting a bank account was time consuming as I had only a hotel address at the time (AML KYC requirements)
- getting credit was nigh on impossible, despite Equifax having huge amounts of data about me in the UK, it was impossible to reference it in the US
The question is, will this innovation really transfer to the domestic US banks, for everyone to benefit? If not, BoA et al. could see HSBC, RBS/Citizens's, Citi and others being able to attract new foreign customers far more easily than they could poach them from the internal market. And domestic customers may just get wind of how easy it is to move their business to another bank.
UPDATE: Sorry to anyone that has seen this appear twice in their feed - an error in Blogger meant I had to delete the original and re-submit this one.