Bankloch

In recent years, I have delved into the domains of   DeFi (decentralized finance), Web3, blockchain, and cryptocurrencies , building a solid understanding (although far from being an expert) of their underlying concepts and technologies. Nonetheless, I continue to grapple with the business and economic aspects surrounding these innovations. Surprisingly, there are very few articles focusing on the economics of DeFi and blockchain businesses and this in sheer contrast to the enormous amount of content focusing on the technology and the innovative and disruptive nature of this technology. As an engineer, I find the technology behind permissionless decentralized blockchains and smart contracts immensely captivating. However, as a business and functional analyst, I struggle to   discern the business dynamics : the viability of the business case, the definition of customer support models and the customer journeys both in happy and unhappy flows. Unfortunately, these critical aspect...

In my work, I have been confronted a lot with the crucial question of how to establish an effective connection between business and IT. In the pre-Agile era, this responsibility typically fell on the Business Analyst, who would hand over business requirements (needs) to the Functional Analyst for conversion into a functional design (solution). However, even then, discussions revolved around: Should a business analyst be   part of the business or IT team ? Where are the   boundaries   of a Business Analyst versus a Functional Analyst, considering cost and technical restrictions that may challenge certain business needs. Who takes care of   small enhancements   for which there is no need of a detailed and complex analysis and process? Who makes the   bridge with the end-users   and all non-IT activities (like marketing roll-out, process adaptations…​)? To fulfill these requirements, organizations often introduced additional roles such as Process Analysts...

In my blog post " The financial sector boundaries are blurring " ( https://bankloch.blogspot.com/2022/11/the-financial-sector-boundaries-are.html ) I explored the evolution where traditional financial companies are expanding their offerings with adjacent services, while companies from other sectors are also offering more and more financial services. As a result, the boundaries of the financial sector are blurring. Although this blog focused primarily on large players striving to become super-apps (or semi super-apps) and providing end-to-end journeys, there is an equally fascinating narrative to explore about   SaaS vendors offering solutions for a niche market . In my other blog " Every neobank its own niche " ( https://bankloch.blogspot.com/2022/10/every-neobank-its-own-niche.html ), I discussed how certain   neo-banks   concentrate their efforts on specific customer segments. This deliberate focus enables them to provide highly targeted value-added services to th...

In my previous blog, " In the Blink of an Eye: How the Digital Age Intensifies the Risk of Bank Runs " ( https://bankloch.blogspot.com/2023/06/in-blink-of-eye-how-digital-age.html ) I discussed the increased risk of rapid bank runs in today’s digital age, particularly when customers hold substantial deposits in current and saving accounts, as they can be withdrawn almost instantly. Obviously   reject deposits is not a commercially viable option for banks . Therefore banks have to find a convenient way to convert excess (saving) deposits into alternative financial products, reducing the ease of immediate withdrawal and mitigating the risk of bank runs. This strategy is not only beneficial for the bank (as it reduces the speed of withdrawals), but also for the customer, who can profit from higher interest rates. Due to the   convenience of saving accounts , many customers are hesitant to move their savings into other financial products. While investing in securities is of cours...

In the financial sector, a significant number of employees work in the Customer Support (Customer Care) department. However, blogs about the financial (Fintech) sector often overlook this department, focusing instead on sales and IT. Instead Customer Support departments are often considered as necessary costs (a cost center) that should be minimized as much as possible. This results in   continuous neglect and relentless cost-cutting measures   in those departments. E.g. Outsourcing   to near- and off-shore countries Structural understaffing , leading to awfully long waiting times for customers. Low salaries , resulting in hiring profiles with little experience and expertise. Bad and difficult working circumstances , like Setting targets on   Average Call Time , creating pressure to quickly close calls. Leaderboards   based on the number of calls processed, fostering competition among team members. Monitoring and limiting break times Encouraging   multitask...

Recently several   medium-sized banks   in the US (i.e. First Republic Bank, Silicon Valley Bank and Signature Bank)   came into trouble , after their customers lost trust (i.e. the trust of being able to retrieve their money at any moment) in these banks. This resulted in an unstoppable and lightning-fast run on the bank. Analysts call the collapse of Silicon Valley Bank (SVB) the   first digital bankrun or also the first Twitter-fueled bank run . The incredible speed of this bankrun was in any case never witnessed before in the history of banking. In the largest bank failure in US history, i.e. the one of Washington Mutual Bank in 2008, customers took 10 days to withdraw $16.7 billion, while in the case of SVB $42 billion were withdrawn in a single day and another $100 billion were queued up for the next day. These staggering figures have   shaken up the entire worldwide financial system . In today’s interconnected world, where information travels at lightning...