The New Financial Social Network: B2B Synergy Links the ePayments Industry

Members of the financial services industry constantly strive to adapt to new technologies, procedures and systems.  In a world of new media and banking 2.0, sites like Banking.com and the new social site B2Bsynergy.org powered by The Payments Authority aim to spark conversations and keep financial leaders connected.

B2B Synergy provides another community for credit unions, bankers, vendors and merchants to congregate through message boards, community discussions, white papers, case studies and other educational material to discuss the electronic payments industry.

Amy Smith, President and CEO of The Payments Authority believes B2B Synergy to be the first social network dedicated solely to payments and financial services.  She states in a Bank Systems & Technology article,

“It’s amazing to see other people from other institutions — banks and credit unions, credit unions and community banks — all weighing in and sharing best practices.”

Read the full Bank Systems & Technology post here.

Are you already a B2B Synergy user? How do you see social networking sites benefitting your business? Let us know in the comments below.

Social Media Statistics: By-the-Numbers, February 2011

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

  • $7.25 billion was spent in online advertising in the U.S. in the fourth quarter of 2010, a 15.9% increase over the fourth quarter of 2009 (Source: eMarketer)
  • 200 million accounts on microblogging service Twitter (Source: Twitter)
  • 26% decline in profit for The New York Times in the fourth quarter of 2010 compared to the fourth quarter of 2009 (Source: The New York Times)
  • $1.07 is the cost of acquiring a Facebook Fan via advertising on the social network (Source: Webtrends)
  • 49.4 billion minutes were spent on Facebook in December 2010, a 79% increase over December 2009 (Source: comScore)
  • 78% of small businesses use Twitter to market themselves while 75% use Facebook and 30% use LinkedIn (Source: Postling)
  • 70% of retailers use Facebook to promote their business, up from 50% last year (Source: MerchantCircle)
  • 46.6% of Twitter users are ages 18 – 34, a 9.4% increase from the previous year (Source: comScore)
  • 37% of retailers list Facebook as their most effective source of marketing (Source: MerchantCircle)
  • 32% of businesses are promoting themselves through Facebook Places, with another 12 % planning to do so in the coming months (Source: Financial Times)

IDC Poll: Which Banking Services Customers Will Pay For

IDC recently released a poll which investigates how consumers prioritize their banking services.  Through LinkedIn, the global intelligence firm polled 45 individuals on what single service that financial institutions offer deserved their hard-earned money.

The poll found that 39 percent found check writing to be the most important feature with the highest willingness to pay. The use of debit cards came in at a close second with 36 percent mindshare.

As the economy is stabilizing and the current consumer climate constantly wants free services, financial institutions will have to decide where they fall with respect to fees. However, the increasing ease and benefits of online banking may encourage more people to want to pay for banking services.

Which fees do you think make the most sense for consumers and FIs? Let us know in the comments 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.

  • A Year After Credit Card Reform, Warren Cites Improvements in Industry

American Banker

A year after the credit card reform law was enacted, Elizabeth Warren, the administration’s official in charge with setting up the Consumer Financial Protection Bureau, said the industry has improved its practices and warned against over regulation of the card market. Warren is scheduled to host a conference on Tuesday marking the one-year anniversary of the CARD Act. According to text of her remarks, Warren said the reform legislation was helpful and plans to release a study showing improvements in practices during the last year.” I believe the CARD Act has pushed in the right direction. It has brought about significant reforms in both the pricing practices of card issuers and the information provided to consumers,” Warren said, according to her remarks. “Even so, substantial challenges remain.

Read more

  • New B of A Check-Image Fee May Further Paperless Push

American Banker

Bank of America Corp. is adding another fee that may lead some of its customers to shut off paper statements. This month, the company began charging customers a $3 monthly fee if they elect to receive images of their cancelled checks along with their statements. Though B of A is not the first to charge for check images, its move furthers an approach the Charlotte, N.C., bank adopted last year when it required customers with a new type of account to stop receiving mailed statements as a condition of waiving their monthly fee. Customers can avoid the new fee by choosing to access their check images online only or by shutting off paper statements entirely.

Read more

  • First Look: New Authentication Guidance

Bank Info Security

A preliminary draft of new online authentication guidance from the Federal Financial Institutions Examination Council puts greater responsibility on the shoulders of financial institutions to enhance their security and prevent fraud. The FFIEC has yet to formally unveil its long-awaited update to 2005′s authentication guidance, but a December 2010 draft document entitled “Interagency Supplement to Authentication in an Internet Banking Environment” was reportedly distributed to the FFIEC’s member agencies — the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corp., Office of the Comptroller of the Currency, National Credit Union Administration and Office of Thrift Supervision — for review and comment. Copies of this draft have circulated recently within the banking and security communities, and two were sent separately and anonymously to Information Security Media Group.

While it’s likely that this draft will be amended before the final release of the new guidance, the current document calls for five key areas of improvement.

Read more

  • How to Unleash Payments Innovation in Banks?

Celent Banking Blog

Celent’s ‘Payments Innovation 2011 – The Global Jury Decides’, was published last week. The report focuses on understanding the challenges facing the payments industry and their impact on innovation in the next 12 months. The jury this year consisted of 22 panelists drawn from 14 countries across five continents and was chaired by John Chaplin, President of Ixaris, itself a very innovative payments company. The report has a number of interesting findings. For example, the jury expects that innovation in 2011 is most likely to come from Asia (a top region by clear margin) and North America, in low value and micro payments, and from improved product access (rather than the products themselves).

Read more

  • Mobile Payments Take Hold Around the World

eMarketer.com

Transactions will total nearly $1 trillion by 2014. A sixfold increase in the volume of mobile payment transactions is on the way in the next four years, according to one research firm. A forecast from Yankee Group predicts the worldwide transaction value of mobile payments will total $984 billion by 2014, up from $162 billion last year. That includes transactions from mobile banking, international and domestic remittances, contactless cards, mobile coupons and near-field communications. According to an Accenture survey of “tech forwards”—web users who use several networked devices and internet services—there is widespread concern around the world with the safety of mobile payments. Even among this internet-savvy group, privacy and identity theft were serious worries.

Read more

  • Bank Closings Tilt Toward Poor Areas

New York Times

Until it closed its doors in December, the Ohio Savings Bank branch on North Moreland Boulevard was a neighborhood anchor in Cleveland, midway between the mansions of Shaker Heights and the ramshackle bungalows of the city’s east side. Now it sits boarded up, a victim not only of Cleveland’s economic troubles but also of a broader trend of bank branch closings that is falling more heavily on low- and moderate-income neighborhoods across the country. In 2010, for the first time in 15 years, more bank branches closed than opened across the United States. An analysis of government data shows, however, that even as banks shut branches in poorer areas, they continued to expand in wealthier ones, despite decades of government regulations requiring financial institutions to meet the credit needs of poor and middle-class neighborhoods.

Read more

  • Tech Wave Lifts Some Venture Firms

Wall Street Journal

Top venture-capital firms including Accel Partners and Kleiner Perkins Caufield & Byers are riding the frenzy around companies like Facebook Inc. and Groupon Inc. to raise billions of dollars in new funds, even as the rest of the venture industry struggles to gather money. The new funds stand out in what is a bleak environment for most venture firms. Hit by the financial crisis and poor returns over the past decade, just 119 new venture funds were raised in the U.S. last year, totaling $11.6 billion in assets, according to research firm VentureSource. That was down from 215 new venture funds totaling $40.1 billion in 2007. “Today’s fund-raising market is a have and have-not market,” said Christopher Douvos, co-head of private-equity investing for the Investment Fund for Foundations, an organization that invests in venture-capital funds on behalf of nonprofits.

Read more

Avoid Danger in the Waters, Prevent Mobile Banking Scares

Mobile banking is pervading the financial world helping consumers more efficiently manage their finances.  However, the fears consumers harbor with respect to the security of their finances easily translates to the mobile channel.

Over a year ago, Android phone users downloaded mobile banking apps from an unknown developer, 09Droid. The apps, which boasted connectivity to large banks, such as Bank of America and Wells Fargo, were never created, hosted, or sponsored by their respective institutions.  Luckily, the fraud was discovered and the apps were removed from the Android App Market.

With consumers wary of a variety of security issues regarding their financial data, it is important to provide them with tips to stay safe, and secure their faith in your financial institution’s mobile banking offerings. A CreditCards.com post describes the following tips for consumers to stay safe before and after going mobile:

Before Going Mobile

1. Consider the app store

2. Check out the source

3. See what others are saying

4. Try a bookmark instead

You can read the full post, including tips after going mobile here.

While some consumers may seem to be overly cautious, it is more important to direct your customers to the correct, secure banking options to ensure increasing mobile adoption.

How do you assure customers that they are banking safely across a variety of financial tools?  Let us know in the comments below.

Goodbye Wallet, Hello Smartphone

With the recent onslaught of mobile payment applications, choosing credit over cash is becoming an expected method of payment. Traditional cash transactions, which are often used at a farmers’ market or to pay a dog walker or babysitter, can now be handled via mobile devices. Even large chain stores like Starbucks have a mobile payment option allowing users with a Starbucks card to simply tap their phone onto a scanner, and the money for their coffee or beverage is automatically deducted from their Starbucks account.

For mobile banking, the move from wallets to smartphones presents a shift in banking industry. Lori Ann LaRocco at CNBC recently spoke with Omar Green, Director of Strategic Mobile Initiatives at Intuit, and Brett King, author of Bank 2.0, about what this move means for the banking industry.

When Green was asked by LaRocco how he has quantified mobile banking opportunities, Green noted, “From a revenue perspective, there’s an awful lot at stake in the payments and banking fields as this new expansion of mobile financial solutions comes.”

King echoed a similar sentiment stating, “Mobile banking is part of an individual’s basic expectation of a service proposition from a bank these days… St. George Bank in Australia reports that transactions through their Mobile App exceeds that of their Top 40 branches these days….by 2015 Mobile will be the most interacted channel, day-to-day, for retail banks in the USA.”

You can read the full interview here.

The Battle of Sexes: How it’s affecting financial literacy

Men and women stereotypically have a difference of opinion about many issues. Finances, as a recent MyBankTracker blog post highlights, is one of them. According to a PNC Financial Services Group survey, 49 percent of women, as opposed to 39 percent of men, say that the recession caused them to plan finances more carefully.

Not only does this chasm between opinions draw attention to the problems couples may be having financially, but also to the financial literacy of their children. As parents try to educate their own children, the impact of the recession and the differing views of parents can lead to misinformation and confusion. However, the PNC survey showed that 55 percent of men and 57 percent of women felt that the recession will change the way their children manage their finances, indicating a growing concern that the next generations “may have a tougher time making it financially.”

R. Bruce Bickel, senior vice president of PNC Wealth Management, notes that this can be solved by talking to children early and often about managing money. Bickel advises,

“Helping children create budgets and discussing the principles of earning, giving, saving and spending instills discipline early in life and they are more likely to carry these values forward,” he said. “It doesn’t matter how much money a family has, this approach is indispensible and helps assure future success with finances.”

How are you educating your customers to prepare for the future? Are you implementing any programs for youth? Let us know in the comments 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.

  • PayPal to Extend Use of Mobile Wallets

American Banker

PayPal Inc. is pushing to expand its use of mobile wallet services as it stakes out turf in the mobile payments industry. The eBay Inc. subsidiary expects payments volume on mobile devices using PayPal’s service to more than double this year, surpassing $2 billion, Sam Shrauger, vice president of global products and experience, said during a presentation Thursday at eBay’s analyst and investors day. John Donahoe, the president and chief executive of eBay, said he expects the PayPal business to become bigger than eBay in the next three to five years. “We can do for mobile payments exactly what we did for online payments,” Shrauger said, adding that the company’s connections to payment networks, banks, merchants and consumers can harmonize all the “disconnected systems” needed to facilitate mobile payments.

Read more

  • Two Tech Trends Your CU Cannot Afford To Miss

Credit Union Journal

Although a large percentage of Americans still favor paper statements and prefer to pay their bills via traditional mail, the adoption of e-billing solutions is on the rise. According to the NACHA-The Electronic Payments Association, the number of direct payments increased to 2.75 billion in 2008, an increase of almost 5%. Additionally, more than half of all U.S. households use direct payment for at least one recurring payment. One reason consumers are turning to online payment methods is to protect them from fraud, misuse of personal information, and identify theft. Many of today’s electronic billing solution providers offer a number of security features including data confidentiality, biller authentication, and non-repudiation of bills.

Read more

  • The 6 Levels Of Proactive Support

Customer Experience Matters

I’ve noticed a lot of discussion lately around proactive support. A host of technologies (analytics, alerts, mobile, etc.) are creating new ways for companies to better help customers with their problems. But the discussions often talk about “proactive support” as if it’s one thing. Proactivity is not a single attribute; it’s actually on a spectrum. To make that clear, I’ve identified six different levels of proactive support. Here’s an example of different levels of support, from the least to the most proactive, for a customer who’s flight was cancelled.

Read more

  • Men Vs. Women: Financial Management Differences

MyBankTracker

Men and women are not always on the same page when it comes to financial management. In a survey by the wealth management unit of PNC Financial Services Group, results showed some large discrepancies between genders with regard to the impact of the recession on financial planning. PNC’s survey complements data by other banks such as Charles Schwab which has noted some broad financial management differences among gender. However, PNC’s findings can be very monumental for couples because they highlight the fundamental need for couples: open communication between spouses is critical to financial harmony.

Read more

  • The 43 Financial Sites With the Most Unique U.S. Visitors in January per Compete

Net Banker

Every month, Compete publishes a list of the 1000 websites with the most U.S. monthly unique visitors. In January, 43 were financial sites (banking, payments, brokerages, cards, credit reports, lending, or personal finance). Of the 43, 14 were banks. Intuit was number four on the list behind PayPal, Chase and Bank of America but ahead of Wells Fargo.

Read more

  • Google’s Schmidt Sees Payments as a Big Business

New York Times

Eric E. Schmidt, Google’s chief executive, thinks wireless transactions, enabled by the coming wave of Android smartphones outfitted with near-field communication technology, could turn into a serious business for the company. Mr. Schmidt, speaking to a small group of reporters late Tuesday after his keynote presentation at the Mobile World Congress here, said Google could work with advertisers to “extend offers to phones with NFC chips.” Advertisers, he said, were interested in combining an ad and an offer, presumably at the point of sale. Google is not looking to get into deals with exchanges for terminals and other areas that credit card companies are hoping to dominate, he said.

Read more

  • The Great Customer Courtship — Banks Are Rolling Out New Incentives to Win Your Business; Here’s a Guide

Wall Street Journal

Who knew checking and savings accounts were so sexy? Historically low interest rates, tough new capital requirements and heightened competition from brokerage firms are prompting banks to dangle juicy incentives to a group of customers that not long ago were considered wallflowers: depositors. The nation’s top 15 banks by deposits are promoting high-interest savings accounts aimed at rewarding customers for opening a checking account. The 10 biggest banks also are offering borrowers cash back for opening a new checking account. And the 15 biggest banks are embracing “relationship products,” throwing in rewards like high rates on certificates of deposit, mortgage discounts and investment advice to people who keep multiple accounts under one roof.

Read more

A Post Freddie Mac and Fannie Mae World

Last week, the Obama administration shared an outline of its plan to start reducing the government’s support of the mortgage market. Officials noted this process would consist of phasing out Freddie Mac and Fannie Mae and will likely take several years to complete. Officials also reported that the system would include a place for both the private and public sectors, but the government’s role would be less significant.

A report from the Wall Street Journal said, “The proposal offered a series of short-term steps that would help attract private capital into the mortgage market, including a reduction in the maximum loan sizes that Fannie and Freddie can purchase and gradual increases in the fees the mortgage companies charge lenders. Both of those steps could make it more attractive for lenders and investors to buy loans without government backing, but they could also raise borrowing costs for millions of Americans and weigh on the nation’s home-building industry.”

Due to the delicate housing market, officials believe the process to transition to a post-Freddie and Fannie world may take five to seven years. This process, which would include moving, reassembling and dismantling the firms’ infrastructure, may take even longer than the projected five to seven years.

How do you think the Freddie Mac and Fannie Mae phase out will affect your financial institution? Let us know in the comments section below.

Mobile Banking is More Than “Just Another Channel”

During a recent banking webinar with over 400 industry attendees, a poll of the attendees showed that 39 percent believe that mobile banking is simply another channel of delivery.  A presenter at the webinar, Christine Barry of research and consulting group Aite, was surprised that such a large amount of bankers did not see the potential in this new medium.

Mobile banking has developed into more than a flashy effort to one-up the competition. As an integral part of any banking system, mobile banking has the potential to both increase revenue and draw a new customer base. Barry notes in an Aite Group blog post, “those banks likely to see the greatest return from their corporate mobile offerings will be those adopting a strategic and well thought-out plan for deploying it.”

Barry articulates that the boon of mobile banking can only be fully realized when coupled with a well thought out strategy. Banks should be assessing the benefits and possible concerns of their customers, such as increased accuracy and mobile security. Financial institutions that develop mobile banking plans will not only see early adoption but continued use and adoption.

Do you share this perception of mobile banking? How are you trying to inform your consumers about mobile banking offerings?  Please let us know in the comments below.