Infographic: The Future of Financial Services

Intuit 2020 Report: The Future of Financial Services

Today, Intuit released the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry over the next decade.  These are:

1.  A New Playing Field for Financial Services: Regulatory pressures will increase and competition will grow from both traditional competitors and new entrants. These forces will lead financial institutions to explore new business models, collaboration and partnerships, and increased consolidation.

2.  Shifting Segments, Changing Markets: Consumer demand for financial services will increase across all age groups. The two largest contingents – aging baby boomers and GenYers – will demonstrate particularly acute shifts in their needs and types of products and services they purchase.

Competition to serve mid-market businesses will intensify, slimming financial institution margins.  However, the overall small business sector will continue expanding, with the total number of small and personal businesses increasing by more than 7 million over the next decade. Most of this growth will come from micro and personal businesses (less than $1 million in revenue) creating opportunities for financial institutions that can serve these firms efficiently.

3.  The New Customer Connection: Technology’s role in the customer experience will take center stage. With increased cost pressures and a growing demand for flexibility, accessibility and personalization, financial services organizations will accelerate their use of technology to meet customer needs.

Cloud computing platforms and applications will combine with advanced analytical tools, ever-larger data sets, and social and mobile computing to reshape the way the financial services industry designs and delivers value-added products and services to customers.

4.  Reputation and Relationships Rule: Institutions that use technology to serve up useful customer insights will win. Over the next decade, the financial service industry will shift its focus from transactions to customized value-added services.

Through a combination of both virtual and brick-and-mortar branches, banks will develop stronger, more personal relationships with businesses and consumers, helping them manage risk, build wealth, plan retirement and anticipate health care expenses.

Intuit 2020: The Future of Financial Services builds on the data, trends and forecasts in the Intuit 2020 report, which identifies 20 emerging trends and shifts that will shape business and society over the next decade.

As part of the research process, Intuit’s Financial Services division and Emergent Research conducted a series of interviews and forecast workshops with financial services professionals, academics, and industry analysts. These sessions helped identify the important trends and implications that will impact financial services over the next 10 years.

Click here to download the report.

About Steve King:  Steve is a Partner at Emergent Research. His current research and consulting is focused on economic decentralization, the growth of small business and the future of work and workplaces. Steve has extensive consulting, marketing and general management experience with both large and small companies.  Steve is a senior fellow and board member at the Society For New Communications Research, a research affiliate at the Future of Work and an advisory board member at Pond Ventures.

About Carolyn Ockels:  Carolyn is the Managing Partner at Emergent Research.  Her current research and consulting is focused on economic decentralization, the growth of small business and Gen Y.  Carolyn has extensive consulting experience, and prior to Emergent Research managed Cambridge Energy Research’s Asian energy consulting business, led market research in Japan for RCM Capital Managment, and held a variety of domestic and international consulting positions with the economic forecasting and planning consulting firm Data Resources, Inc.

A Look Into the Intuit 2020 Report: The Future of Financial Services

This report provides a view of the significant demographic, economic, social and technology trends and forces that will affect the financial services industry over the next decade.

The starting point for this forecast is the Intuit 2020 Report, released in October 2010, which identified 20 emerging trends and shifts that will shape business and society over the next decade.

To prepare this follow-up report, Intuit Financial Services and Emergent Research conducted a series of forecast workshops, exercises, and interviews with accounting professionals, academics, and industry analysts. These sessions identified the important trends and implications that will affect the financial services industry.

Check back on Monday, April 11th for more details and follow us @bankingdotcom and @financeworks.

What We’re Reading

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.

  • Mortgage Lenders Need a Social (Media) Life

American Banker

The mortgage banking industry is at an inflection point. This trend has given rise to the new discipline of customer relationship management called Social CRM, or SCRM — the use of social networking to engage in a conversation with the customer to provide a mutually beneficial business relationship. Social CRM can provide originators and servicers with much-needed market intelligence, leads and insights that can help increase market share and customer satisfaction and improve processes and services. With an integrated and comprehensive Social CRM approach, mortgage banks can use social media to improve consumer perception and quality of service.

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  • At Nacha Show, Wal-Mart Demands a Place at the Table for Nonbanks

American Banker

Wal-Mart Stores Inc. is agitating for nonbanks to have more say in how the automated clearing house network is run. Executives of Wal-Mart, which has had its share of run-ins with the payments industry, said here at Nacha’s annual conference that banks have dragged their feet on potential rule changes that could benefit retailers and other nonbank companies. Jason Marshall, the Bentonville, Ark., retailer’s senior director of payment services, suggested that companies like Wal-Mart should be given voting power over ACH rules that are set by Nacha, the electronic payments association. “Nonbanks should have the opportunity to be direct members, to have votes on operating rules and to be eligible for [Nacha] board membership,” Marshall said in an interview.

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  • Vendor Exit? Scramble Is On

Credit Union Journal

At least one credit union said it is scrambling to ensure mobile banking applications keep running – and a CUSO that supports many CUs stopped testing its applications – after apparently being told that their provider, Firethorn Holdings, LLC, will shut down Sept. 30. Firethorn’s parent company, however, denied any such shutdown is planned. “It’s a big deal,” said Howie Wu, VP-virtual banking at $9.2-billion BECU. “We’re crossing fingers that there’s no disruption to the Firethorn applications before we deploy our replacement. A group of us is pushing for an extension until the end of the year, and I’m fairly confident Firethorn will agree.”

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  • Meet Your New Senior Executive – The Head of Channels

Gonzo Banker

Banks need to assign accountability and responsibility for channels to a senior level manager. That manager needs to have a seat at the table with retail, commercial and wealth management. This person will have some component of the sales and service goals of the bank. Ultimately, he/she may have P&L responsibility. Banks will not be successful with channel strategies if they are managed a bit here and a bit there by many people.

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  • After Epsilon: Avoiding Phishing Scams & Malware

Krebs on Security

Many people are familiar with the traditional phishing attack, which arrives in an email that appears to have been sent from your bank or ISP, warning that your account will be suspended unless you take some action immediately, usually clicking a link and “verifying” your account information, user name, password, etc. at a fake site. Commercial emails that emphasize urgency should be always considered extremely suspect, and under no circumstances should you do anything suggested in the email. Phishers count on spooking people into acting rashly because they know their scam sites have a finite lifetime; they may be shuttered at any moment (most phishing scams are hosted on hacked, legitimate Web sites). If you’re really concerned, pick up the phone and call the company to find out if there really is anything for you to be concerned about.

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  • Watching the Mobile Payments Battle Unfold

NetBanker

The Alternative Payments Systems Innovations (APSI) conference held in San Francisco last week may want to change its name to Mobile Payments Systems Innovation. It seems that all things mobile has totally eclipsed any interest in non-mobile untraditional payments. The key issue is control of the consumer. This is not a new issue, of course. Richard Crone’s (President of Crone Consulting, LLC) timeless mantra, “The one who enrolls (is the one who) controls” is as true with m-payments as it was with e-payments and bill payments before that. However, no longer is this control of the consumer limited to a tug-of-war between the banks and the merchants.

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  • INTERVIEW-Citi looks askance at mobile wallet frenzy

Reuters

People expecting U.S. mobile wallets to become widely available have one more skeptic to contend with: Jud Linville, the Citigroup executive responsible for helping to make cellphone payments a reality. U.S. shoppers eagerly await the day when they can wave cellphones at the check-out counter to pay for everything from groceries and gasoline to designer gowns. Mobile wallets are far from commonplace in the United States, although many U.S. companies are trying to develop them. Google Inc , Citigroup Inc and MasterCard Inc are the latest to team up, according to a report this week in the Wall Street Journal.

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

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

  • 100,000,000 members and counting on professional social network LinkedIn (Source: LinkedIn)
  • 20,600,000 US adults will access a Twitter account at least monthly in 2011, an increase of 26.3% over 2010 (Source: eMarketer)
  • 400 full time employees now work at Twitter (Source: Twitter)
  • 5 years ago the first tweet was sent on Twitter (Source: Twitter)
  • 250,000,000 active users access Facebook via mobile device (Source: Facebook)
  • 20,000 ‘elite’ Twitter users generate a whopping 50% of all tweets consumed (Source: Yahoo)
  • 42% on average is the portion of a Facebook friends list that a person does not actually know (Source: BitDefender)
  • $14.7 billion in revenue for US print advertising in 2010, down from $15.5 billion in 2009 (Source: eMarketer)

Do you run a Facebook Page? Don’t miss these marketing tips from Michael Stelzner at Social Media Examiner.

Mobile Payments Round-Up

The mobile payments industry is evolving quickly, so our staff has gathered some of the interesting mobile payments stories we’ve enjoyed reading over the past week. Let us know what you’ve been reading in the comments section below.

More than a smartphone: The New York Times recently reported on the companies contending for a piece of the mobile wallet. With no clear leader in the space everyone from banks, credit card companies, payment networks and mobile phone carriers are trying to find where they can fit into the mobile wallet, and how they will get paid. According to the New York Times, the mobile wallet provides a big opportunity, “The stakes are enormous because small, hidden fees that are generated every time consumers swipe their cards add up to tens of billions of dollars annually in the United States alone.”

Google’s jump into NFC: This week, Google announced that they are teaming with MasterCard and CitiGroup to embed technology into Android devices, making a strong push into the NFC space. VeriFone Systems, who makes credit-card readers for cash registers, will play a large role in the announcement as the company plans to roll out more credit-card readers that enable consumers to pay by simply tapping their smartphones.  The Wall Street Journal, who broke this week’s news, wrote “The planned payment system would allow Google to offer retailers more data about their customers and help them target ads and discount offers to mobile-device users near their stores, these people said. Google isn’t expected to get a cut of the transaction fees.”

AMEX and Visa, on your phone: American Express has followed in Visa’s footsteps and released a payment service that allows Android and iPhones to be utilized for person-to-person (P2P) online payments. The service, named Serve, is also available through Facebook and Serve.com. CIO Magazine reported, “Serve also allows users to create and manage sub-accounts for friends and family members to, for example, pay a child’s allowance or a dog walker fee.”

What We’re Reading

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.

  • Smurfs Offer Cautionary Mobile Payments Tale

American Banker

The Smurfs may have an important security lesson for banks and credit card networks getting into mobile payments. Capcom Interactive Inc. caught the ire of parental groups in recent weeks over its Smurfs’ Village iPhone game, which is free to download but charges players to purchase additional features, like “Smurfberries,” within the application. Smurfberries can cost as much as $99.99 per wagonful. There’s a difference between making a purchase within a mobile app and using a mobile phone as a credit card replacement at the grocery store.

Read more

  • Amex Builds E-Wallet for Non-Amex Spending

American Banker

American Express Co., going against its image as a brand for the elite, is launching a digital wallet that would make it the payment choice for the masses — in person, online and in mobile. “This is not an Amex wallet,” said Dan Schulman, American Express’ group president for enterprise growth. Serve “allows us to address a larger chunk of the marketplace that we haven’t before.” In Serve’s current form, “some of this is like PayPal,” Schulman said. Users enroll by linking any bank or card account and choosing which to use to fund each payment.

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  • Visa, MasterCard Face Class Action in Canada

American Banker

Canada’s major banks and credit card lenders may face a national class action over alleged merchant-related price-fixing conspiracies if the application is certified. The claim, filed Monday in the Supreme Court of British Columbia, alleges that Visa Inc. and MasterCard Inc. and the major card issuers have conspired to increase or maintain the fees paid by merchants on every card transaction. The certification process is expected to take well over a year, depending on how hotly contested the process becomes, said Greg McMullen, a litigation associate at Branch MacMaster LLP. The claim alleges that Visa and MasterCard rules force merchants to accept every Visa or MasterCard credit card, even if those cards carry high fees for merchants.

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  • Treasury Expects to Save $120 Million Annually in Switch to Electronic Payments

BankTech.com

The U.S. Department of the Treasury is going electronic. And in switching from paper checks to electronic payments to pay all federal benefits, the Treasury expects to save $120 million a year. Starting May 1, Americans applying for federal benefits such as Social Security or Veterans Affairs will exclusively receive electronic payments made through either direct deposit to a bank or credit union account or to a prepaid debit card. About 11 million Americans who currently receive federal benefits dispersed by paper check will also be moved to electronic payments by March 2013.

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  • Banking via mobile device jumps 54 percent

CNET

The number of people accessing their bank or brokerage accounts through mobile devices surged 54 percent in the fourth quarter last year compared with the same period in 2009, according to a new report from ComScore.  During the fourth quarter of 2010, 29.8 million Americans tapped into their bank, credit, or brokerage accounts via cell phones and other mobile devices, according to the Mobile Financial Advisor report released yesterday.  Drilling down further, 18.6 million people accessed their financial accounts via a mobile browser, 10.8 million used a mobile app, and 8.1 million used text messaging, said ComScore. Those numbers include people who used more than one of the three methods to access their accounts.

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  • Smartphone advice that you can bank on

Kiplinger

Using your smartphone to check your bank account balance or deposit a check is convenient. But is it safe? Hackers are getting better at finding ways to tap into smartphones and capture account numbers and other personal information. But you have ways to lower the risk of becoming a victim, said Michael Gregg, founder of Superior Solutions. Don’t use public Wi-Fi to access accounts online.

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