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 or Tweet @bankingdotcom.
- Customer security big opportunity for financial institutions
Data shows that financial institutions are in a prime position to sell security solutions to consumers to combat fraud, as almost four out of ten consumers have no identity protection services, according to the 2011 Second Annual Antivirus, Browser, and Mobile Security report recently issued by Javelin Strategy & Research. The report, based on data from almost 25,000 consumers, presents year-to-year comparisons of consumer behaviors, evaluations of antivirus and mobile and browser security products, and highlights revenue opportunities for financial institutions. Opportunities were found among consumer groups where the levels of internet device ownership are high and adoption rates of antivirus software are low. Javelin found that, overall, while consumers are using internet devices at exploding rates—smartphone ownership alone increased 42% from 2010 to 2011—slightly more than half of consumers do not have any antivirus software.
- The Two Different Worlds of Bank Tech — U.S. and the Other 194 Countries
There are 15,215 banks and credit unions in the U.S. right now, diminishing at a rate of 3 percent per year. That’s not a mystery; It has been every Fed Chairman’s hidden agenda to have fewer banks. Some think it’ll continue to happen at a greater rate of decline because not even an optimist like Donald Trump would ever think of starting a bank in today’s “new normal.” The U.S. number (307) is diminishing or leveling off because technology is maturing, and bankers are reasonably happy with the technology they have.
- The trillion-dollar question: Who will power your mobile wallet?
If you want to get a smackdown going, throw together five executives each angling for a lucrative piece of a $4 trillion market. The retail payments space is one of tech’s hottest battlefields. The reigning technology, magnetic stripes on debit and credit cards, is nearing the end of its 50-year run — “it’s just the U.S. and sub-Saharan Africa” left clinging on, quipped Verifone (PAY) CEO Doug Bergeron — as NFC (near field communication) chips embedded in smartphones and other devices begin their ascent. A new way of making payments opens the door for innovation. It also gives an army of new players the chance to try to wedge themselves into the payments stream.
- Consumers hold high hopes for new bureau
If you’ve ever thought someone was playing fast and loose with the rules on your credit cards, credit score or mortgage, but you had no idea where to go with your complaint, you now have a place to turn. The Consumer Financial Protection Bureau was launched last week. And it is supposed to stop lenders from tricking you into a high-interest loan or some other financial product that is not what it appears to be. It also gives consumers an outlet for their complaints on everything from student loans to payday lenders.
- Is this Just the First Step? Google to Offer Business Credit Cards
Google is going into the credit card business, improving its margins on advertising by moving down the food chain. The catch is 1) the business MasterCard issued by World Financial Capital Bank is only available to selected customers of Google’s advertising service and 2) can only be used to buy advertising through the AdWords unit. Initially, interest will be set at 8.99% with no annual fee. The card is Google’s first (but unlikely its last) venture into vendor financing. While more typically offered for capital expenditures, service spend can be expanded with judicious credit use and Google is the king of search ad spend.
- How to Get With the Mobile-Banking Program
More consumers are buying smartphones, but they’re not embracing mobile banking at the same pace — mostly because they have a misplaced fear of it, according to several studies by research firm Javelin Strategy & Research. In 2009, 26% of smartphone owners were uncomfortable using their phones for banking. A year later, that number jumped to 40%, according to the firm. “It’s very clear to us the consumer is saying, ‘I’m nervous about mobile banking,’” says Phil Blank, managing director of risk, fraud and security for Javelin. If financial institutions don’t address that immediately, he says, “This stagnation is just going to continue.”