Facebook Turns Your Posts into Ads

With social media advertising on the rise, Facebook is letting companies cash-in on its user base by introducing “Sponsored Stories.” Facebook users who check-in or post status updates mentioning a brand (such as Starbucks) can now appear in ads on the right side of Facebook pages.

Insight: Facebook unveiled a new advertising model for brands called “Sponsored Stories.” In concept, the new program is similar to Twitter’s Promoted Tweets in that brands are able to sponsor certain keywords or activities on the social network, but with a twist. Facebook’s Sponsored Stories are ads that will feature you and your friends. Here’s a short video detailing how it works.

Initial reports on the new service suggested a potential privacy backlash, but to-date there has been nothing of the sort. For companies making investments in Facebook as a platform for engaging fans, Sponsored Stories represent a compelling way to personalize the brand and target potential customers.

Using Social Media to Empower Resellers

Jeese Stanchak at SmartBlog on Social Media recently interviewed Cisco’s Small Business Marketing Manager, Jeanne Quinn, about the role social media plays Cisco’s business model.  Stanchak posed questions about which Cisco’s engagement on social media platforms, as well as asked Quinn to share lessons learned from Cisco’s social media strategy.

Analysis: Cisco Systems is widely recognized as a leader in social media adoption at the corporate level. When it comes to the company’s focus on small business, Cisco executes on-going listening campaigns in an effort to better understand the pain points for resellers and potential customers. In terms of how it views various channels, Cisco utilizes Facebook to share the content it generates, Twitter to amplify key messages and spotlight content, LinkedIn to foster small group and community discussion and YouTube for video distribution.

In terms of the customer service issue (which can’t be ignored on social channels), Cisco’s approach is simple and one that other organizations should aim to replicate. Specifically, the company aims to respond promptly, empathize with the customer’s issue or concern, and do its best to solve the problem or get them to someone who can help as rapidly as possible.

The Internal Revenue Service Launches Tech-Savvy App

The Internal Revenue Service (IRS) launched a smart phone app this week that allows tax payers to check the status of their tax refunds and receive helpful tax information via mobile phones. The app, which is called IRS2Go, is the first app created by the IRS and is a high-tech jump for the government agency coined as “Uncle Sam.”

Mark Schwanhausser at Javelin Strategy and Research notes that the IRS jumped into a lucrative mobile market, something bankers should embrace as well.

Schwanhausser writes:

“The IRS will tout this publicly as “customer” service – and it is. But the reality is this is a smart money-saving move. As we noted in our 2010 Online Banking and Bill Payment Forecast report in October, the financial services industry can save $1.4 billion by steering more online-banking customers to head online or to their mobile devices rather than schlepping to a branch or phoning the call center when they have a customer-service question. The IRS stands to save handsomely if it can shift a few million refund queries to mobile devices.”

Does your FI offer a mobile app to customers? Leave us a comment below.

What We’re Reading This Week

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below.

  • Between CARD Act and Fed Plan, Store-Card Deals Due for Overhaul

American Banker

Banks are in for tougher negotiations with retailers over store credit card programs if a Federal Reserve proposal is finalized. Analysts say the plan would severely limit the number of people who qualify for a store card, likely leading to the reduction or end of incentive payments and other perks standard in private-label program contracts today. The Fed wants to clarify parts of the Credit Card Accountability, Responsibility and Disclosure Act by requiring issuers to use individual (not household) income when determining an applicant’s ability to pay. Retailers such as Home Depot Inc., David’s Bridal Inc. and Dress Barn Inc. argue this would disqualify a huge target audience for their store cards — stay-at-home moms — who lack independent income. The proposed clarification would apply to other credit card accounts, too.

Read more

  • Your mobile phone is becoming your wallet

CNN Money

Welcome to the dawn of mobile currency. For years, tech companies have demoed flashy prototypes of systems that let customers use their mobile phones in place of cash or credit cards. This year, those systems are heading out of the labs and into the real world. The result: A gold rush on the next e-commerce frontier. “There’s a lot of money at stake if it’s done right,” says Omar Green, director of strategic mobile initiatives at Intuit (INTU). Starting Wednesday at Starbucks (SBUX, Fortune 500) stores throughout the U.S., the cashier can now scan your phone to deduct payment for your latté from the balance on your pre-loaded Starbucks card.

Read more

  • Consumers Still Skeptical of Mobile Payments, But Attitudes May Change Soon

Digital Transactions

Despite the hype about mobile payments, most consumers still aren’t comfortable using smart phones to pay for things, according to new research from the Bank Administration Institute and Hitachi Consulting. That, however, could change, and change soon. The study also shows that debit remains consumers’ preferred payment choice, though its future has question marks because of new regulations.The sixth in a series that began in 1999, the newly released study is based on field research performed by Harris Interactive of a representative sample of 3,271 U.S. consumers who completed an online survey last July.

Read more

  • The Smartest Credit Card Ever Made: Your Phone

Inc.

Credit cards are extremely low tech — they contain simple data to authenticate a transaction. Now, several players, including banks to mobile carriers to financial networks, are looking at a new transaction device: your smartphone. Indeed, financial institutions such as PayPal and MasterCard have issued some customers adhesive chips for their phones. The credit card information is stuck to the phone and can be used at any of the 200,000 contactless readers in stores around the nation. That’s the low-tech version.

Read more

  • New US bank aims to reinvent personal banking but faces traditional obstacles

iStockAnalyst

Upon its US launch in 2011, BankSimple aims to provide an easy, intuitive, and social banking platform for people who appreciate simple online services. The web-based bank will partner with other financial institutions which will hold the actual deposits, while it focuses on the customer experience. However, its lack of physical presence and unconventional approach may limit its appeal. BankSimple aims to utilize sophisticated analytics to help consumers better manage their finances by providing an individualized service, catered to specific needs and goals. These systems will reflect the ongoing trend of consumer wellbeing in financial services, with consumers seeking to take control of their finances and use available resources to make better financial choices.

Read more

  • The Digital Wallet of the Future

NPR Marketplace Blog

For many folks the idea of getting rid of your wallet and replacing it with an app on your smartphone seems like a no-brainer. Last fall, AT&T, Verizon and T-Mobile have teamed up to help make that happen.The three wireless rivals created a joint venture called Isis that hopes to use near filed communication chips (NFC) embedded in next generation smart phones to replace your credit cards. But there are some big barriers facing the wireless giants.

Read more

Improving Online Services

In an increasingly online world, financial institutions are faced with bringing customer service online via multiple channels. While support lines and e-mails can suffice for some, some social media savvy consumers turn to Facebook or Twitter to find their financial institution.

In a recent SearchCRM.com article, Sue Hildreth examines customers’ behaviors in the financial marketplace. Hildreth sites statistics from Intuit Financial Services, IDC, Finextra Research and Pegasystems, noting that an online experience is becoming a valued resource to customers. During a poor economy, having reliable customer service in the banking industry has been crucial. As people refinance homes, shift stocks and deal with overdrawn accounts, having a customer representative, rather than an automated phone system, is paving the way for a new wave of customer service.

Hildreth writes:

“Kate Leggett, senior analyst at Forrester Research Inc. and a leading expert on CRM, believes that banks and other financial services firms will want to integrate their CRM Web offerings into a corporate Facebook page so that customers don’t have to jump between the two sites but can get the same, consistent online Web services at either place.”We see some companies — though not yet many banks — offering customer service on Facebook. They can engage with customer service staff directly, through click to chat, or they can browse the knowledge base,” Leggett said. “I believe it is the next wave.”

Is your FI connecting with customers via Facebook and Twitter?  Let us know in the comments section below.

FI Spotlight: Provident CU

Provident Credit Union Prepares for 2011

Despite the economic challenges of 2010, Provident CU’s CEO Wayne Bunker details the credit union’s preparation for 2011 by adding a variety of e-services, Website improvements and personal financial management in the form of FinanceWorks.

Remote check deposits and financial seminars top Bunker’s list of added convenience for the Provident CU customer in the new year.

Read the full message from the CEO here.

How has your financial institution prepared for a bright 2011? Leave us a comment below.

Social Media Statistics: By-the-Numbers, January 2011 (Part II)

Below are interesting statistics on social media usage. Feel free to share your favorite social media statistics in the comments section.

  • 30 billion pieces of content (e.g., links, photos, notes) are shared on Facebook each month (Source: Royal Pingdom)
  • 25 billion tweets were sent on Twitter in 2010 (Source: Royal Pingdom)
  • 200 million views of YouTube via mobile per day (Source: Google)
  • 152 million blogs on the Internet at the end of 2010 (Source: Royal Pingdom)
  • 100 million new accounts added on Twitter in 2010 (Source: Royal Pingdom)
  • 53% of American Internet users look for information on Wikipedia, up from 36 percent in 2007 (Source: Pew Internet)
  • 50% of U.S. CMOs at Fortune 1,000 companies said they launched a corporate blog because “it’s the cost of doing business today” (Source: eMarketer)
  • $3.08 billion will be spent to advertise on social networking sites in 2011, a 55 percent increase over 2010 (Source: eMarketer)
  • 200 million registereed accounts on Twitter as of January 2011 (Source: Twitter)
  • 110 million tweets are sent per day on Twitter (Source: Twitter)
  • 27.5 million ‘stumbles’ on content discovery site StumbleUpon in one day, a new all time record (Source: StumbleUpon)
  • 65% of U.S. adults use social media and say they have received a positive benefit as a result (Source: Harris Interactive)

Consumers Use Mobile Devices to Call Toll Free

A recent IDC Financial Insights survey found respondents interact with their financial institution using their mobile device, however not for the reasons many may think.

The majority of respondents used their mobile device to call into their bank’s toll-free number. The breakdown can be seen in the graph below:

With new statistics surfacing every day surrounding mobile banking, the IDC survey showed consumers primarily use their mobile devices to make phone calls. The data also indicated age was not a huge factor when determining whether an individual dialed toll-free – across all demographics, the toll-free number was the preferred way to interact with their financial institution using a mobile device.

Additional insight on the survey can be found here. Are you remembering to think of all the possible channels to reach your customers, even the most basic?

2011: The Year of Personal Finance Management Tools

Mark Schwanhausser of Javelin Strategy and Research recently predicted that 2011 will be a banner year for personal finance management (PFM) tools. Schwanhausser notes that the ideal PFM tools will be integrated from bank log-in and give users an overview of outside accounts.

He writes:

“Bringing PFM out of the shadows of a tab will require a new type of thinking at most FIs. The payoff is that FIs have an opportunity to change not only how customers think about their money but also to expand the role of the FI as their primary financial portal. Currently, FIs focus the online experience on accounts and balances. But smart PFM can expand the “conversation” to touch on bill pay, transfers, financial alerts, spending categorization, financial goals and more – all from the log-in.”

Do you offer PFM tools? If so, where are these tools located on your Website? Let us know in the comments section below.

What We’re Reading This Week

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below.

  • Security Watch

American Banker

Active military personnel had their accounts hacked at Pentagon Federal Credit Union in Alexandria, Va., according to a Jan. 17 story in The Washington Post. The source of the leak was allegedly an unguarded laptop that had stored an undisclosed number of accounts. The hacking incident was discovered Dec. 12, according to the Post, but not reported to customers until January. The New Hampshire Attorney General’s Office, however, reported Social Security, debit card and credit card numbers of 514 residents had been hacked in the incident.

Read more

  • New breed of credit cards could offer savings — for the sharp-eyed, that is

Boston.com

A new breed of credit cards is on the way for 2011. Tighter regulations, cutting-edge technologies, and a growing willingness by banks to lend again are just some of the factors reshaping the credit card industry. For sharp-eyed consumers, the changes could present an opportunity to significantly lower monthly expenses. Here are the key trends to watch: Cards come knocking: Card offers are cluttering mailboxes again. Mailings almost doubled to 2.7 billion last year, according to market researcher Synovate.

Read more

  • Android Users More Interested in Mobile Financial Services, Report Shows

Digital Transactions

While the news in smart phones this week has been all about Verizon Wireless’s announcement that it will start marketing the iPhone next month, the news that may well be of more importance to mobile payments and mobile banking is the hot streak that Google Inc.’s Android operating system is on. “If you don’t have an Android plan in place, you’re already behind,” Mark Schwanhausser, a senior analyst at Javelin Strategy & Research, tells Digital Transactions News.

Read more

  • Now at Starbucks: Buy a Latte by Waving Your Phone

New York Times

Futurists have long predicted that one day, shoppers will swipe cellphones instead of credit cards to make purchases. At Starbucks stores nationwide, that is about to become a reality. On Wednesday, Starbucks plans to announce that customers of the 6,800 stores the company operates in the United States and the 1,000 that are in Target stores will be able to pay for their lattes with their cellphones instead of pulling out cash or a credit card. Various technology and payments companies, including PayPal, Bling Nation, Square, Venmo and now-deceased dot-com start-ups have been experimenting with ways to wean Americans off cash, credit cards or both.

Read more

  • Asset Managers Choose Plastic over Paper

Milwaulkee Journal Sentinel

Plastic is still gaining ground on paper. The number of credit card transactions is projected to rise to about 162 billion in 2013 from 110 billion in 2009, according to the Nilson Report. The United States accounted for about 48% of credit card transactions in 2009, compared with 23% for Europe and 16% for Asia, the Nilson Report said. The average U.S. consumer has four credit and debit payment cards, compared with an average of one per person in Europe, it said.

Read more

  • Banks tucking targeted ads onto online debit statements

Washington Post

As banks test new ways to make money and attract customers, they are tucking ads onto the list of recent purchases on consumers’ online bank statements. The charge for your breakfast at McDonald’s, for example, might be followed with an offer for 10 percent cash back on your next meal at the Golden Arches. There’s no need to print a coupon – just click the link, and the chain will recognize your debit card the next time it is swiped. “The one thing these debit programs have is a significant amount of transaction and behavioral data,” said Mark Johnson, president and chief executive of Loyalty 360, a trade group for marketers.

Read more