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.
- Banks Saturate Market with Mobile Apps
Not only are more banks offering mobile banking, more are also releasing multiple applications to try to appeal to as many types of banking customers as possible. The primary benefit of a fragmented approach is speed-to-market. Bankers say that if they’re the first to offer a new feature, they’ll have an advantage over their competitors. Building a new app from scratch can in many cases be faster than integrating a new feature into an existing one.
- What Steve Jobs’ Resignation from Apple Means for Banks
Steve Jobs’ resignation as Apple Computer’s chief executive may prove a mixed bag—but a critically important one—for banks. Industry officials involved in mobile payments long ago stopped waiting for Apple to take the first step into the area. Yet the iconic company’s influence on the financial world has been substantial—and mostly unilateral. Apple has rarely gone public with its plans for payments. Even today, with the company rumored to be weeks away from launching the iPhone 5, few outsiders know for certain whether the handset will include a payments-capable near-field communication chip.
- Drama and Intrigue in the Core Systems Market
Art Gillis of Bank Systems & Technology has heard of the banking crunch, the one and only downgrade, high numbers of bank failures, bailouts, bank fraud, foreclosure screw-ups, free-fall mortgage lending, big-name Wall Street failures, stupid acquisitions by wannabe heroes, CEO firings, hotel room scandals, politicians playing economists, the quest for jobs, credit limits once a cardholder issue, and unprecedented stock market gyrations. But bank technology has never really caught the attention of press room histrionics. So what’s going on with the 2011 Edition of Automation in Banking? Here’s what he saw:
- The Coming World of Smaller Banks
Frank Partnoy wrote a fascinating opinion piece in Financial Times last week about the coming world of smaller banks. Other blogs suggest that getting smaller is all about shedding the branch network and its associated cost structure, then life would be wonderful for banks. Experience with branch closures suggests a good amount of customers would be lost along with those branches in the vast majority of cases. Branch networks need rationalizing.
- The Revenue Growth Challenge: It’s Time to Drill Down
For the first quarter of 2010, the banking industry generated $170 billion of revenue. A year later, through the tireless efforts of more than a million bankers, the industry generated $165 billion of revenue, a 3% drop. Listen to any bank stock analyst today and they will emphasize their concerns about future revenue growth in the banking industry. With flat to shrinking loan demand, regulatory assaults on non-interest income and declining mortgage banking volumes, running a bank feels a bit like flying a balloon with a leak in it – not a fun ride!
- Bank Person to Person Payments – small steps
Person-to-person payments are generally considered payments via an email address or cell phone number when the person’s bank account number is not known. Recently Bank of America and Wells Fargo announced that they were beta testing a new service to allow person-to-person payments. Both banks recently announced an agreement with ClearXchange. As several Javelin employees are customers of these banks, it was with great anticipation that we tested this service.
- Tweeting to Build Customer Engagement
Overall, few banks and financial services firms are currently participating on Twitter, but that is changing. Financial service providers considering entry into the Twitter-sphere should: Develop a targeted base of followers; or if your organization already has followers, segment them for targeted approaches. Create messages and/or value-propositions specifically designed for populations that use social media; this is an ideal environment for attracting Gen Y. Use Twitter to engage customers – consider special offers or links to photos or video targeted for the intended follower audience.