Data & Analytics

11:15 AM
Connect Directly
Twitter
Google+
Facebook
RSS
E-Mail
50%
50%

Innovate Or Die, Says Capital One's Jamison

The managing director of Capital One Labs implored banks to meet customer's technology expectations during a keynote speech at the CEB TowerGroup Financial Services Technology Conference in Boston.

Many consumers are disappointed with the level of technological innovation from their banks, and financial institutions must meet customer's expectations in a digital world or face the consequences.

That is the warning issued by Mark Jamison, managing vice president of Capital One Labs. Capital One Labs is a small division of the larger bank that is tasked with developing innovative digital products and "re-imagining the way customers interact with their money." Jamison gave a keynote talk on innovation in banking at the CEB TowerGroup Financial Services Technology conference this week in Boston.

Jamison noted how the advent of smart mobile devices have been a catalyst for "creative destruction," a term first coined by early twentieth century economist Joseph Schumpeter. He referenced several industries that have been greatly marginalized by recent technological advances, including travel agencies, atlas publishers and camera makers. "There have been major industries eaten up by apps," he said, adding, "Of the original Fortune 500 list [first published in 1955] less than 15 percent still exist today."

This warning is especially pertinent for banks, he noted, who face increased competition in some aspects from nontraditional competitors, such as Google, PayPal, Bitcoin and Green Dot. "I think they're more of a threat that many people realize," he added.

Jamison advised banks to incorporate characteristics that are usually indicative of the most technologically innovative companies, such as speed and agility, collaboration and dative design.

Speed and agility are key for any innovative company, he said, because "it's important to rapidly test and prototype" new products, rather than develop something for 12-18 months before bringing it out to market, only to find it's something consumers don't want.

Regarding collaboration, Jamison said banks should not be afraid of open platforms and enabling external parties to build out their proprietary platforms. He pointed to Simple (formerly BankSimple), which has deals with federally insured banks to hold its customers money, as prime example of this.

Jamison also advised banks to utilize data analytics to target their customers with more relevant offers. He said Capital One runs algorithms on millions of customer card transactions to determine the most common "co-occurences" -- that is where customers who spend money at one retailer are most likely to also spend money. Banks can further mine data to determine what times of the day certain offers might be relevant.

Financial institutions certainly don't lack the sheer amount of data to glean this information. Jamison noted that in 2012, two zettabytes of data were created, which is more than what was created in the entire history of the world up until that point, he said.

"All this massive amount of data is out there," he added. "They key for banks is figuring out what matters and what doesn't."

[Related Content: Keeping Up With Mobile Innovation ]

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Mason
50%
50%
Mason,
User Rank: Apprentice
4/26/2013 | 8:17:56 PM
re: Innovate Or Die, Says Capital One's Jamison
I suppose that includes patent generation
Register for Bank Systems & Technology Newsletters
White Papers
Current Issue
Bank Systems & Technology - August 2014
Modern core systems are emerging as the foundations of effective channel integration and customer engagement initiatives.
Slideshows
Video