The promise of lower fixed costs and better efficiency ratios that heralded the introduction of online banking was based on the belief that the Internet could be used to create a self-service environment that would reduce the staffing and technology requirements. In fact, adoption of online banking took longer than expected, and consumers did not abandon the other channels they used to access the services and products offered by their financial institutions.
This past week, many industry news outlets reported on the new partnership between BBVA and Dwolla. According to the news release issued by BBVA, the agreement means that the bank’s customers will be able to use the Iowa startup’s real-time network to make money transfers.
Balkanization is a pejorative, geopolitical term, typically used to describe the process of fragmentation or division of a region or state into smaller regions or states that are often hostile or non-cooperative with one another. Bruce J. Summers, who consults with the financial markets group of the Federal Reserve Bank of Chicago, recently used it to describe the impact of vested interests on the future of payments and money movement in the United States.