The Lightweight Heavyweight

Web 2.0 applications often thrive on being lightweight and with cost effective scalability solutions. As these types of characteristics allow for greater adaptability, faster speed to market and generally a rapid return on investment through a reduction in cost and time spent developing the application. Perfect examples of this include IMDb, which started off as nothing more than a single list of female actors and (with a little help from Amazon) grew much more than just an Internet Movie Database, or even imgur which (according to mediaite.com) only a year after its foundation was serving almost 20 million page views per month.

This is all fine and well for a simple application put together in a teenager’s bedroom that needs to see the light of day. But how does an organisation with an established product, customer base, expectant shareholders, security needs and expectations go about applying this “lightweight” web 2.0 pattern? Well in the case of the Commonwealth Bank of Australia (CBA) the answer is simple. It doesn’t.

Whilst perhaps being the most innovative Australian bank in terms of bringing web2.0 to its customers with the new payment system entitled Kaching (think old school cash register). The CBA has put a great deal of time and money in, to ensure that they had a suitable infrastructure to “modernise its legacy core banking systems and introduce new features”; $580 million over 4 years in fact according to the article over at ZDNet.com. Whilst this doesn’t adhere to a lightweight model, the CBA have certainly gone to a great distance to ensure that scalability is not an issue. Further to this, they’ve gone to some lengths to ensure that the features of the Kaching system are not hindered by hardware limitations. As NFC is a core feature of this system and currently not incorporated in any iDevice, the CBA created the iCarte as an interim solution.

The success of the Kaching app is pretty impressive as far as I can tell, just 2 months after launch it had been downloaded over 110,000 times. Again, this was not merely left to chance or only through network effects and word of mouth. As seen above, a full scale TV campaign was created, direct download links from within their existing applications as well as banner advertising are examples of the lengths the CBA have gone to try and ensure the success of the application. So why would the CBA go to such lengths? Because the information that this type of application provides the CBA with, is worth far more than any credit card interest rate or account keeping/transaction fees. Knowing your spending patterns, allows them to target products directly at you and the merchants you deal with. As Michael Harte (CBA Chief Information Officer) is quoted as saying in an interview with CIO, “Information about money has become almost as important as money itself”.

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About andrewdcook

Project Manager/Animator/Beer Snob

7 responses to “The Lightweight Heavyweight”

  1. adamhijazi says :

    I had not actually heard about Kaching before reading this post but it has definitely peaked my interest now that i have.

    While I think this is a good example for the pattern my concern with scalability is the fact that it is probably not going to be compatible with other banks, for a long while. Banks are notoriously bad at being able to communicate with each other (I think this is partly on purpose and is just anti-competitive behavior) so I cannot see an app like this one being able to drop funds from a commonwealth bank account into a Suncorp bank account for instance with any level of urgency.

    I think it would probably still take the day or so it usually does. I would really like to know how this works when communicating with people who are not using the same app, and banking with a different bank. Do you know much about this? Do you think by introducing an app like this the Commonwealth Bank are attempting to force customers to bank with them alone to utilise the latest technology? Do you think this is an example of gaining custom by “brute force” – being the bank in the best financial position to invest in technology. I think they are in the lead now technology wise for sure, and the money has been wisely invested. How long do you think it will be before the other banks catch up?

    Cheers.

    Adam

  2. Yiting Zhang says :

    Hi Andrew Cook,
    I have heard of Kaching. When I am applying a card in CBA, the staff there introduced this to me and it is a pity that I don’t download because I don’t think I will use it a lot. But it sounds a cool application. However, it is associated to a Bank Account and needs an extra equipment to be placed outside the iphone. And it relies and depends on many services. I don’t think it is lightweight model strictly. What do you think? When paying, it should work with some specific hardware.
    Overall, this is a cool application and it is leading the trend now for more convenient way of paying.

  3. kangyudo says :

    Never know that CBA has new features for payment. This is the future technology where safety still become a big issue on this. It will be more exciting if we can make transaction with different bank through this. By this, our facebook is getting more personal and banned from others. The most important thing is never forget your phone wherever you go.

    Thanks for sharing

  4. Janine Lardner says :

    Hi Andrew

    Great post! I hadn’t heard of Kaching prior to your post either. I’m amazed at how CommBank have revolutionised the traditional cheque – making it a product which people will use more of as it becomes easier with the Kaching app, bump and NFC technology. This is certainly a benefit to the everyday customer and small business. Agree with Adam’s comment about CommBank introducing this technology and making non CommBank customer’s feel as though they need to conform to see the benefit. The issue with receiving a payment from a CommBank customer using Kaching is the non CommBank customer has to visit the Kaching website, enter the payment code and their bank account details to receive the money in their bank.
    Overall, it seems to be the way of the future for mobile banking.
    No more paper cheques and no need to visit a bank!
    Wonder what sort of impact this will have on the services provided by the branch and the need for teller transactions? If it declined with the introduction of internet banking, surely it would do so again for mobile banking too?

  5. bronwynsc says :

    Hi Andrew, great post about an interesting development.

    As you say, Kaching may not tick all the boxes for ‘lightweight and scalable’ but it should be put into perspective. This could be lightweight and scalable in the context of banking and enterprise grade solutions. In the past, banking was all inhouse, slow and cost a motza. I think some banks are moving with Web 2.0 and this a great example.

    I wonder if some of the aspects of Kaching would tick some of the ‘lightweight and scalable’ best practices. I found this link about Commbank moving its banking website to the cloud with Amazon Web Services which could demonstrate some ‘outsourcing’.
    http://www.computerworld.com.au/article/443131/commbank_announces_facebook_payments_move_aws_cloud/

    I also think their integration with Facebook and the option for email payments would also tick some boxes for marketing virally. This is the sort of viral marketing where the features do the selling for you.

    What do you think?

    • bronwynsc says :

      Just noticed some really interesting comments at the end of that article from CIO Michael Harte:

      “We will continue to look for those cloud service providers to host anything we can because we have better things to do with our money,” Harte said. “That doesn’t include customer and other more sensitive data, which CommBank “will not let out of our control,” Harte said. “Data sovereignty is important. Data privacy and security is important. And from our business model of trust, we will never compromise on that.”

      Very interesting approach to selective outsourcing and business strategies!

  6. samialhejailan says :

    Dear Andrew,

    You are right, perfect instance of that involve IMDb that begins off like nothing more than the one list about female actors as well as (with the lesser help from the Amazon) increasing much more than only the Internet Movie Database. Internet Movie Database (IMDb) has been the online database about information associated with films, television programs along with video games. It involves actors, production crew personnel and also fictional features featured within those 3 visual entertainment media.

    Thank you

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