What We’re Reading: Omnichannel Banking, Bank Branches, Apple

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.

  • UMB Emulates Apple in Push to Encourage Mobile, Online Use

American Banker

UMB Bank is channeling its inner Apple to encourage more of its customers to use online and mobile banking. The Kansas City, Mo., bank has begun designating tech support specialists in its branches whose job is to help customers understand and use digital services like mobile deposits and online bill pay.

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  • Omnichannel Banking: More Than a Buzzword

Bank Marketing Strategy

Banks are in an unequalled position to understand their customers. They already can see product use, transaction patterns and demographic profiles. By leveraging channel usage insight, they can develop an even more detailed customer profile. Understanding not only what the customer looks like, but also how they conduct their banking can allow for improved product offers using their preferred channel.

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  • Regions, Credit Unions and USAA Sit Atop Customer Experience Rankings

Bank Systems & Technology

The banking and credit card issuer industries both saw significant improvements over last year in the Temkin customer experience ratings. Regions and credit unions earned the highest customer experience scores among banks in the 2014 Temkin Experience Ratings, released earlier today. Regions and credit unions tied with scores of 81%, followed closely by USAA and TD with scores of 80%, and USAA also earned the highest score among credit card issuers with 77%. Overall both the banking and credit card issuing industries improved their scores over last year.

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  • BBVA creates digital banking unit

Finextra

Spain’s Banco Bilbao Vizcaya Argentaria has established a digital banking unit in a bid to boost the development of its various technology-led businesses. The new business area is charged with leading the bank’s digital transformation around the world, running its multi-channel strategy and the design of operational and commercial processes.  It will also work on developing new business lines, overseeing internal developments such as the Wizzo app as well as the bank’s startup investments made through its $100 million venture fund and Simple, the US firm it bought for $117 million last month.

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  • It’s Not Easy for Banks to Sell You on New Services

The Street

Banks spend tons of money figuring out how you like to spend and save money, especially when it comes to using credit cards and mobile banking, two huge profit center for financial institutions. The credit card industry will process about $4 trillion in card transactions this year, according to Business Insider, and Albany, N.Y.-based ResearchMoz reports that mobile banking is also flexing its muscles, growing from 480 million U.S. users at the end of 2012 to 1.08 billion by 2016.

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  • One in Three of Americans Hasn’t Been to the Bank in at Least 6 Months

WSJ Blog

More than a third of people in the U.S. haven’t been to the bank in at least a half of a year, according to a new survey.  People with lower incomes and less education visit bank and credit union branches less often, the Bankrate.com survey found. For example, 35% of people with at least some college education visited a bank in the last week, compared with 21% of people with at most a high-school education.

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What We’re Reading: Big Data, Smartphones and Apple Patents

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.

 

  • Majority of Americans Own Smartphones, Pew Survey Finds

American Banker

Fifty-six percent of U.S. adults own a smartphone of some type — up from 35% of adults two years ago, the Pew Research Center said in a report released Wednesday. The report marks the first time in the two years that Pew has surveyed smartphone adoption that a majority of Americans say their mobile phone is a smartphone or that their phone operates on the iPhone, Android, Windows or BlackBerry platform. The adoption comes amid a surge of shopping, surfing, social media and other activity on mobile phones in recent years. Twenty-eight percent of all mobile phone owners banked with their device in the past 12 months, up from 21% a year earlier, according to a survey released in April by the Federal Reserve Board.

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  • Mobile Banking Is Mainstream – What About Security, ROI, Payments?

American Banker

Theodore Iacobuzio had a stern message for bankers: “The train is leaving the station,” said Iacobuzio, a MasterCard executive, referring to the emerging mobile payment economy. “You have to get on.” Earlier that Wednesday, Iacobuzio had spoken on a panel at the Mobile Banking and Commerce Summit in Miami about using data to drive relevant offers to cardholders. After being more than a theory for the past several years, financial services companies have been iterating and tweaking their mobile banking models — offering mobile deposit capture (depositing a check with the snap of a smartphone camera) — for at least the past three.

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  • Should A Bank Outsource Its Mobile Strategy?

Bank Systems and Technology

Now more than ever before, banks need to be able to offer their customers innovative digital services, and bank IT spending trends point to this conclusion. According to U.K. analyst group Ovum, mobile banking is the clear IT investment priority in 2013 among the digital channels, as retail banks attempt to capitalize on the features unique to mobile, such as location-based services. According to a report from the firm released earlier this year, spending on digital channels, which includes mobile, will grow 6.7% in North America in 2013 and rise at a compound annual growth rate of 8.2% between 2013 and 2017

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  • iWallet: What Apple left out of its WWDC presentation

CNN Money/Fortune

“Mobile payments remains a future opportunity,” wrote Morgan Stanley’s Katy Huberty in her note to clients about Monday’s WWDC keynote. On Tuesday morning the U.S. Patent Office granted Apple (AAPL) 37 patents that included, as Patently Apple reports, an “E-Wallet” patent for parental controls and a “simplified wireless data transfer” patent that would allow an iPhone to make mobile payments without relying on NFC (near field communication) technologies.

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  • Small Banks Lead the Innovation Agenda

Finextra

Today, we are witnessing numerous instances of smaller players spawning innovations across social media, self-service channels, mobile banking, pricing, payments etc. to deliver customer delight. So, what is making banking, an industry not often associated with innovation, look for new and innovative ideas? There are lessons on agility, drive for change and customer orientation that larger institutions can imbibe from the smaller banks and replicate them accordingly. With every new technology defining a new way of consuming, sharing and delivering information, the constant question when thinking in the context of money is “Why can’t I do that” and often, the answer is the inability of the bank.

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  • Big data to drive banks’ mobile wallet strategies – Finextra research

Finextra

Research from Finextra finds that banks around the world are looking to discounted offers and big data analytics to beat off the competition from telcos and tech start-ups as they battle for control of the consumer mobile wallet. For the research – conducted on behalf of Clear2Pay and NGData – Finextra surveyed more than 183 bankers on the key issues around the monetisation of mobile payments. Respondents were primarily (76 percent) employed by large banks with more than 2500 employees and ranged from C-level executives to business development, IT and marketing strategy management – with a nearly even split between national and international banks.

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  • Consumers Don’t ‘Like’ Banks in Social Channels

The Financial Brand

The rapid growth of social media presents an array of ever-expanding opportunities to both consumers and marketers alike; But how does this apply to the relationships consumers want with their bank? To answer this question, The MSR Group examined the social media habits of consumers, asking which companies they follow on social networking sites such as Facebook, LinkedIn, Twitter and YouTube. However, consumer interest in following banks was much lower, with only only about one in every 30 indicating they had ever followed their primary financial institution. When gauging future interest, only 2% of online banking customers said they were very likely to start following their bank.

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  • Banks turn to tech to cut cost of new regulation

Reuters

Swiss private banks are hoping to gain a competitive edge by investing in the latest technology for risk management and compliance to keep down the cost of new regulations brought in since the financial crisis. Among the myriad of new international rules, the United States, for example, has brought in the Foreign Account Tax Compliance Act to raise tax revenues from secret accounts held by their citizens. “The cost of risk and compliance has risen a good 30 percent in the last two to three years,” Alexander Classen, CEO of the international business of private bank Coutts, told the Reuters Global Wealth Management Summit in Geneva.

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  • Apple files ‘iMoney’ patent for virtual currency, digital wallet, and … free stuff

VentureBeat

Apple has applied for a patent on a combined virtual currency and digital wallet technology that would allow you to store money in the cloud, make payments with your iPhone, and — just maybe — communicate with point-of-sale terminals via NFC.

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What We’re Reading: Google Glass, Payments and Branches

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.

 

  • Google’s Glass Guidelines Provide Clues to Future Bank Apps

American Banker

Banks will be prohibited from advertising on Google Glass, the wearable computing product the tech giant has just started releasing to privileged developers and early adopters. In guidelines and best practices Google released this week, the search engine company told developers it will reject apps for the device — so-called “Glassware” — that it considers an irritation to users. “Google is very clear about apps limiting distraction, not [bothering] people all the time, so this isn’t something that banks can use as a platform to coax their customers 100 times a day,” says Sarah Rotman Epps, an analyst with Forrester Research. “But it is potentially a platform for them to deliver utility when it could be most useful.”

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  • Phablet, Superphone Shipments Expected to Reach 825 Million Units in 2018

American Banker

They may look ridiculous, but phablets and superphones — mini tablets and extra-large phones — have a bright future, according to research released today by Transparency Market Research. According to a new market report, “Phablets and Superphones Market — Global Industry Analysis, Size, Share, Growth and Forecast, 2012 — 2018,” the global phablets and superphones market is expected to reach $116.4 billion by 2018, growing at a compound annual growth rate of 44.1% from 2012 to 2018. The number of units of the devices is expected to grow at a CAGR of 25.8% from 2012 to 2018, and reach 825 million by 2018.

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  • Critical Bank Management Skills for the 21st Century

Bank Systems & Technology

In the past, your teams needed to be able to demonstrate a detailed grasp of policy, rigor in analyzing reports, and dedication to data quality — but to tackle today’s challenges, a different form of expertise is required. The rapidly shifting economic and regulatory conditions of the 21st century, mean that market changes often outpace management skills. In the past, your teams needed to be able to demonstrate a detailed grasp of policy, rigor in analyzing reports, and dedication to data quality – but to tackle today’s challenges, a different form of expertise is required.

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  • How Apple and Amazon Will Shape Mobile Payments

Bank Systems & Technology

Apple and Amazon will continue to drive customer expectations and create big shifts in the retail world even if they don’t release a mobile payments solution. Many traditional payments players like banks have been worried for a while about the possibility of Apple entering the mobile payments space at the point of sale. Many speculated that the last iPhone release would include an NFC chip, which did not happen to the relief of those who would have to compete with Apple. Although Apple already has a bridgehead into the payments business thanks to iTunes, experts seem to think Apple will refrain from entering the mobile payments business.

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  • Small Banks Excel at Industry Specialization

Barlow Research Analyst’s Journal

Many business banking customers value financial institutions and banking relationships that cater to their specific industry’s needs. Unfortunately, not all business customers believe their bank is industry-focused. However, customers that believe their primary bank caters to their specific industry needs appear to be more confident about the financial condition of their company, as well as their industry and believe their banker is more knowledgeable about their business. Barlow Research’s Second Quarter 2013 Economic Pulse provides valuable information about business banking customers’ need for industry-focused financial institutions.

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  • The five layers of Online banking security

CIOL

It is becoming increasingly critical that financial institutions ensure their consumer and corporate banking customers are able to access their accounts with the highest reasonable security, using a process that is very straightforward and approachable. There have been significant changes in the threat landscape for online banking. In order to protect customers using Internet-based products and services, such as applications, the Federal Financial Institutions Examination Council (FIEC) and other regulators have instituted significantly more stringent requirements for financial institutions. Ensuring a compliant security program requires the execution of a good, multi-faceted authentication solution.

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  • Retailers likely to be winners in m-payments, with banks making it work, suggests leading banker

Internet Retailer

Mobile payments is currently a three way battle for consumers being fought out between retailers, banks and mobile network operators – each keen to ‘own the customer’ – but it will be retailers and banks that win, leading m-payment experts concluded at the International Payment Summit (IPS) in London last week. Mobile operators are likely to end up just as dumb pipes. Retailers, banks and operators are all looking towards mobile wallets as the key to mobile payments and this is likely how the technology will start to gain traction in mainstream retail and it is through this that mobile payments will start to be used. But who will brand the wallets and how do you make sure not every retailer, bank and brand that a consumer uses has its own wallet?

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  • What Bank Branch Closures Mean for Consumers

U.S. News

The traditional notion of banking, in which customers visit their local branch to deposit money, check their balance or take out a loan, may no longer be the reality. In the past year, American banks shuttered more than 2,000 branch locations—and news of additional closings appears on a regular basis. Banks cite rising operation costs and shifts in consumer-banking behaviors as primary causes for reducing the number of branches. For banks, these decisions are a matter of improving their bottom line, but for customers, these closings may force them to develop new habits. In one way or another, most people are likely to notice a change in how they interact with their bank.

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The New Paper Chase

It’s always interesting to examine trends taking shape at the intersection of financial services and technology, as this blog does so often. But there’s one issue that’s frequently gets overlooked and yet is still the giant elephant in the room: paper.

Yes, paper. We’re a couple of decades into the era of e-commerce, and for many of us even bills arriving via snail-mail seem like a rarity. We have a staggering array of online tools that enables us to do virtually everything financial, from anywhere at any time. What’s paper got to do with it?

The short answer is: a lot. This is particularly true of checks, as used by millions of consumers and even small and mid-sized businesses. But in many other areas too, it’s an area in which change has been surprisingly slow. On the flip side, doing away with paper will bring enormous benefits, from speedier transactions and greater savings to environmental preservation.

It’s been almost a decade since the Check 21 Act passed in late 2003, allowing financial institutions to create digital versions of original checks. Today, banks deal with each other almost entirely through electronic transfers—once the actual check has been submitted, it disappears from the process.

But tell that to the entities writing the checks in the first place. To be sure, the numbers are dropping, however slowly—there’s close to 2 billion fewer written each successive year. But at this rate, it will take until 2026 for paper checks to be eliminated altogether.

That’s the conclusion in a study published last year by the Federal Reserve Bank of Philadelphia. According to the same report, the benefits are undeniable: getting rid of paper saves the banking industry $1.2 billion a year, while consumers and businesses keep $2 billion in benefits through faster payment processing.

Of course, few trends in technology stay at the same rate—there are frequent spikes and pullbacks, and unexpected accelerations that blow away all estimates. No one expected tablet adoption to grow at such a staggering pace, but it has. It took almost 10 years for smartphones to reach 40 million users (which admittedly meant replacing older models), while that number was crossed only two years after the emergence of the Apple iPad.

Just this week, Juniper Research estimated that tablet buying will lead to 200 million users of “transactional tablet banking services” by 2017. By that time, one in four tablet users will be paying their bills via those devices. There are other signs too—let’s not forget that Amazon used to accept checks, but discontinued the practice in 2008.

There’s now a broad variety of services designed in part to wean users off the habit of writing checks. For example, most banks now offer the ability to capture a check image via smartphone and make an instant deposit. And any number of other providers, from thriving vendors like Square to newer entrants like Zipmark—which styles itself as the digital checkbook—make it easy to avail of the new capabilities.

The changes will have tremendous ramifications: Intuit, which now has close to 30 million customers for its payments services and processes $38 billion a year in payments, estimates that it could increase its payments business by $4 billion by getting QuickBooks software customers, mostly small businesses, to use the payments service.

At this point, the use of paper seems almost a throwback to an earlier time, but the numbers clearly belie the perception. Getting rid of it from the world of finance would likely do a world of good. And given the justified concerns over rainforests and a rapidly declining ecosystem, it would actually do the world good too.

What We’re Reading: Cloud Computing, Lending and Device Strategies

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.

 

  • Asked About Digital Wallets, Most Consumers Only Know of PayPal: Study

American Banker

The promise of digital wallets has fueled the conversations and hopes of financial technologists for years. But there are many obstacles to having those dreams realized, including the fact that few consumers know that digital wallets exist. Only 51% of U.S. consumers said they are aware of wallets other than PayPal, according to a comScore Inc. study published this week. comScore defines digital wallets as virtual copy of the contents of a consumer’s physical wallet to facilitate online or offline retail.

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  • Big Banks Boost Lending to Small Businesses: Survey

American Banker

Big banks are showing a growing appetite for loans to small businesses. Banks with at least $10 billion in assets approved 15.3% of loans between $25,000 and $3 million in January, up from 14.9% in December and from 11.7% a year earlier, according to an index published Thursday by Biz2Credit, which connects small and mid-size business borrowers with lenders.

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  • Cloud Computing Security Rules Put Responsibility on Users

American Banker

The PCI Security Standards Council has published guidelines for protecting sensitive data in the cloud. Although the advice was written to protect card information, the same principles could be applied to any data stored remotely. The report states that installing and maintaining a firewall to protect cardholder data would be a shared responsibility between client and provider under infrastructure-as-a-service and platform-as-a-service cloud configurations. But for software-as-a-service, in which the cloud provider hosts software delivered over the web, the firewall would be the sole responsibility of the provider, the PCI Council has decided.

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  • Understanding the Tablet Banking Customer

BAI Banking Strategies

Tablet usage is growing exponentially, with important implications for retail banking. According to eMarketer, the number of U.S. tablet users was expected to reach nearly 70 million by the end of 2012, up from 34 million in 2011. Adoption is now strong enough to provide an accurate assessment of this user segment and develop a strategy for engaging these consumers in financial services.

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  • Five Things Every Business Leader Should Know About Social Capital and the Influence Economy

Business 2 Community

Though social capital is an intangible, it reflects on how well you’re known, liked and trusted. Social capital can be most simply understood as the good reputation and influence of your business or personal brand. Like the concept of goodwill in business valuation, social capital is an intangible whose value is determined by others. “A brand is no longer what we tell the consumer it is – it is what consumers tell each other it is.” ~ Scott Cook, Intuit

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  • Why You Need To Have A ‘Device Strategy’

Credit Union Journal

A recent study by First Data showed that 61% of Americans use a smartphone and that 56% of smartphone users use their smartphone to bank. Plus, almost one-third say they expect a mobile phone app from their FI. Most respondents go online to bank (86%) and pay bills (81%) frequently. Yet, while web-based transaction services are now the benchmark, ATMs still play an important role in consumer transactions. Although consumers view ATMs traditionally-as devices that enable them to retrieve cash, deposit checks, and monitor account balances-there are new capabilities that enhance individualized communications to promote both cross-selling and customer loyalty.

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  • Now banks have to worry about Apple and Google

St. Louis Business Journal

Financial institutions aren’t keeping up with the customers’ needs and desires in mobile banking, according to a recent survey.  Varollii, a Seattle technology company, found that increasingly tech savvy customers want more than what many banks are giving them and that they’re finding it from providers such as Apple and Google, which are offering competitive consumer-friendly services, such as personal financial management and alerts, The Street reports.
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  • Mobile Banking and Change is Coming

SYS-CON Media

In the book Bank 3.0 by Brett King he writes about the monumental changes taking place in the banking industry due first to the Internet and now mobile.  Here is an excerpt, “The average individual is spending 94 minutes or so a day using apps, checking emails and texting up to 100 times per day.  We’re logging on to mobile banking 20-30 times per month and Internet banking around 7-10 times per month, but visiting a branch (of a bank) only a few times a year.”

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  • Big Banks Bet on Mobility and Super-Powered ATMs

WSJ: CIO Journal

As big banks finish the job of consolidating IT systems and knocking down organizational silos, they are counting on investments in mobile applications for both retail and commercial customers, and more sophisticated ATMs, to increase customer satisfaction, lower transaction costs, and help improve margins and revenue growth. According to PNC Financial Services Group, the average cost of a transaction using an online or mobile device is 56 cents, and 59 cents at an ATM, compared with $3.97 when a customer transacts with a bank teller.

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Platform Shift in the Making

What does the banking industry as a whole have to do with Amazon, Microsoft and Apple? Just about nothing—and down the road, it may turn into a major problem (if it isn’t already).

Consider the many stories emerging from the realm of technology that have to do with financial services. Just last week, Amazon unveiled Amazon Coins, billed as “a new currency for Kindle Fire.” To launch the program, the company will dole out coins to customers (each coin is worth a cent), giving them essentially free access to apps and other services available on Kindle. The company can afford the generosity; late last year, it raised $3 billion through its first bond offering in a long time. Giving customers some free money is a great way to raise goodwill and popularize a new program that represents a new channel for transactions. For their part, app developers get another source of monetization.

See which industry is missing from this process?

Actually, the new “currency” is just the latest salvo in the ongoing battle between Amazon, Google, Apple and Microsoft to seed new apps on their respective platforms: Android, iOS and whatever mobile iteration of Windows happens to be in vogue. It’s not really about new software; it’s about creating mobile and other technologies that become increasingly embedded in the daily lives of consumers and business professionals everywhere. More apps, more users, more transactions, more money—that’s how it works. And at the core of this financially intense ecosystem will be. . .the technology platform companies.

In other words, it won’t be the banks.

The way these conglomerates (and it’s appropriate in this context to see Amazon as a technology provider) are driving app development is itself noteworthy. Each company is using a different model for the platform war, raising comparisons to everything from currency manipulation in China to ‘quantitative easing.’

For the record, it looks as if Apple still has a major advantage, thanks in part to being first to market with a smartphone and tablet. But few leads in the technology industry last very long. Kindle still has significant mindshare through its e-reader fan base, Google has racked up major partnerships for Android, and counting out Microsoft is often a mistake. (The company, which has at least as much in assets as Amazon, has been subsidizing developers to the tune of up to $600,000 per app for the Windows Phone, and the just-released Microsoft Surface Pro will likely have even more support, along with the massive user base for Windows PCs.)

We may also see more platforms emerge and find an audience. Facebook, which has already stirred interest with Facebook Credits, could yet become a financial services platform of its own, enabling consumers to pay bills and transfer funds when they go online to post a comment about a movie.

It’s not quite fair to suggest that banks are already irrelevant, but they may be in danger of getting to that point. The financial services industry has long been seen as the enabler for all other forms of commerce, which automatically brought with it a significant level of power. Is that power corroding?

If the role of enabler moves from banking institutions to technology platforms and the companies that own them, and the center of gravity shifts from Wall Street to Silicon Valley—a status some already crave—will that be a good thing?

We’ve commented earlier in this space how the two industries are dramatically different in their operating philosophies. New technologies considered “disruptive” win praise, while new releases from financial services providers that play the same role create instability and roil the markets. There are always new technology companies climbing into the upper echelons of the industry, while the top tier in banking seldom changes except through consolidation.

It’s not as if banks can’t handle technology—they have huge IT departments to run daily operations and regularly release custom apps designed to draw new business and ease customer engagement. But it may be time to go further.

Could banks do what Amazon did and release their own hardware? Should they partner with Apple, Google or Microsoft to gain more control at the platform level? Is it feasible to compete with those companies on their own turf and develop a banking-centric platform?

We don’t have the answers to any of this yet, but we may need some soon.

 

What We’re Reading: Privacy Rules, Mobile Wallets and Banking Acquisitions

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.

  • Four Ways the FTC’s New Privacy Rules Affect Mobile Banking Apps

American Banker

The Federal Trade Commission has been toughening its stance on consumer privacy protection, and this directly affects the mobile applications banks offer their customers. On Saturday the agency issued a report, Mobile Privacy Disclosures: Building Trust Through Transparency, that offers advice on keeping using consumers’ data private. It offers recommendations to four sets of stakeholders: operating system providers (like Apple and Google), app providers, advertising networks, and app developer trade associations. Banks that provide mobile banking, PFM, trading or wallet apps fit in the app provider category.

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  • Bank Tech Vendor Shakeup Continues: FIS to Acquire mFoundry

Bank Systems & Technology

The consolidation trend in the bank technology solution provider space continues to accelerate, with news today that Jacksonville, Fla.-based FIS has signed a definitive agreement to acquire the remaining 78% interest in mobile banking and payment solutions provider mFoundry. Previous to this transaction, FIS held a 22% interest in mFoundry (Larkspur, Calif.), which was founded in 2004 and now serves more than 850 clients in financial services and retailing. According to a statement from FIS, the addition of mFoundry “enables FIS to leverage its technology assets across a broader client base.

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  • The Latest Trends That Will Redefine Online Banking

Business 2 Community

Online banking has had a tremendous effect on banks because people can now complete financial transactions by visiting secure websites that are maintained by brick-and-mortar or virtual banks, credit unions or brokerage houses. While this is convenient consumers are also concerned that their financial information may be accessed by hackers via the Internet, and banks are intent on providing security for their customers and keeping up with the latest technological trends at the same time.

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  • ‘Me Too’ Rules in Mobile Banking

Credit Union Times

Anthony Genovese, a vice president at payments company Compass Plus stated that central advice from Compass Plus to credit unions is to “focus on the importance of the mobile channel” and to take steps to make use of uniquely mobile features such as built-in GPS (the phone knows where it is), a camera, and in an increasing number of phones NFC, the near-field communications payments chip. Genovese added that “the stickiness of mobile user is questionable. Financial institutions aren’t offering many features that compel users to keep using the channel.”

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  • Apple Patent Reveals Peer-To-Peer Mobile Banking Idea, Using iTunes As Bank

Fast Company

Fast Company checks in with last year’s Most Innovative Companies to see how their big ideas fared in 2012–and how they’ll play out in 2013 and beyond. Apple has just revealed one of its more out-there ideas in a patent application titled Ad-Hoc Cash Dispensing Network. The proposed patent, in short, is a peer-to-peer lending concept that would use iTunes accounts as a connection to let people loan or borrow small amounts of money to each other. The patent, which was reported on by the Unwired View website, shows just how far outside the box the thinking goes over at Cupertino.

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  • Will You Be Ready When Mobile Wallets Turn Banking Upside Down?

The Financial Brand

Financial marketers had better wrap their heads around the impending mobile-dominant landscape, and fast. Mobile devices will soon be the central tool consumers use to manage banking relationships. When consumers start embracing mobile wallets and making digital transactions, banking will never be the same again. Around every 10 or 20 years, something big comes along that completely transforms the world of banking — ATMs, debit cards, the internet. Unquestionably, the next big thing to rock banking will be mobile wallets.

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  • The Forgotten Secrets Of The Enterprise Giants: Virality, Word Of Mouth, And Other Radical Experiments

TechCrunch

Today, Intuit is generally recognized as the only party to “own” the accounting channel, but they came at it via a totally radical approach that its competitors seem to have forgotten (which is probably why Intuit has had such firm footing for decades, despite legions of challengers). Don’t be afraid of failure. Be afraid of not trying. Salesforce, Concur and Intuit weren’t, and now we can’t imagine a world without them.

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  • Bank of America’s online banking crashes Angry customers vent frustrations on Twitter.

USA Today

Bank of America says its online banking website crashed Friday, leaving customers unable to access their accounts. Starting late Friday morning, customers trying to log on saw a message that the site was “temporarily unavailable.” The lender announced a few hours later that the problems had been resolved, but not before it endured a fire storm of complaints and criticism. Angry Bank of America customers took to Twitter to say that they were left frustrated, trying to do their banking on the first day of the month.

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  • Identity: The New Security Perimeter

Wired

Traditional security perimeters encircling corporate networks no longer meet the needs of today’s enterprise. As businesses move to cloud computing, employees are able to gain access to their work apps and corporate networks through almost any internet-connected device. The breadth of access, and choice of devices, breaks down traditional security boundaries and forces IT to seek a new security model that can deal with this anywhere reality. Security, therefore, must evolve from an on-site protection model and adapt to securely provide access to off-premises devices.

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The Impact of the iPhone 5 on Bank Marketing

*This blog was originally posted on Bank Marketing Strategy by Jim Marous. Jim is the senior vice president of corporate development for the direct and digital agency New Control focused on building strategic solutions for the financial services industry. You can follow him on Twitter @JimMarous or connect on LinkedIn.

So, the anticipation is over and the newest version of the iPhone has been introduced. When all was said and done, there were few surprises left as to what the iPhone 5 would offer, and for those of us who were crossing our fingers for the possibility of NFC integration (and further payments disruption), there may have even been a bit of disappointment.
And while additional enhancements to the Passbook app provides a glimpse into the potential for a head on competition with Google Wallet for payments supremacy in the future, the shop-with-your-phone coupon capability is not applicable to most bank marketers. What should be of more importance to bank marketers is the additional marketing real estate provided with the new phone and the growth in sales that may be on the horizon.

Bank marketers should see promise with the iPhone 5′s larger, 4-inch screen with Retina display which provides 18% more pixels for delivering enhanced mobile ads, banners, landing pages and interactive campaigns. While the extra pixels may not seem like much, it moves the iPhone experience closer to that of the iPad, which has already proven itself to be a major tool for consumer consumption. And for those who are still tablet-less, it is possible that this new device will a bridge for engaged behavior.

According to Rachel Pasqua, vice president of mobile at digital agency iCrossing, “the enlarged iPhone is enough to make mobile creative a little more eye catching and get more users more deeply engaged.” She mentioned that there will also be less potential for mis-clicks leading to better potential interaction. The potential for greater speed through the LTE and the new iOS6 also will help.

Charles Golvin from Forrester Research noted in a recent post that while other competitors already offer a larger canvas in some cases, “Apple still outpaces the competition when it comes to the entire package — the new iPhone unites significant improvements in industrial design, imaging, audio and connectivity, along with the wealth of new capabilities that iOS6 enables.”

The key for bank marketers is that iPhone 5 users, and smartphone users overall, will be spending more time with content on their phone. It is therefore important to provide the level of content that optimizes both the customer experience and marketing potential of the new devices. Consumers are no longer content with static web pages and difficult to use links and landing pages. Content (web pages, banners, ads, landing pages, etc.) will need to be easier to interact with and be more dynamic.

There is no way of knowing how popular the new iPhone 5 will be in the marketplace, but if the past is any indication of the future, not only will many current iPhone users upgrade to the new model, but the overall iPhone penetration will increase as well. As shown below, nearly 2 in 5 of the 38.2 million Americans using iPhones are on the iPhone 4, which was released just 2 years ago. More impressive than that is the fact that 35% of iPhone users today are on the iPhone 4S, which was introduced less than 12 months ago.

Just as with the tablet, bank marketers should realize that simply ‘super sizing’ a current app or website is no longer enough from the customer’s perspective. It is important to leverage the tools and advancements that are available with the newest generation of phones.

And even though our industry does not have products that are as visually appealing as in retail and other industries, the challenge to differentiate our offerings may be greater, but the opportunity is still significant.

Steve Jobs and His Impact on the Banking Industry

The news of Steve Jobs’ resignation hit Twitter with thousands of Tweets echoing the news of his resignation. As a well recognized and idolized CEO, Steve Jobs changed the way consumers use personal computers, tablets, music and more. Not only did he bring Apple’s stock from $7 a share in 2003 to approximately $400 a share in 2011, he enamored a market and even the youngest children in today’s generation are asking their parents for iPhones and iPads.

You’d be hard pressed to find an industry that was not touched by Steve Jobs, and banking is no exception. Most financial intuitions have their own iPhone and iPad apps that consumers can download and use on-the-go, but beyond that, banks have started installing touch screens, facial recognition in signage displays, media walls and other touches that are reminiscent of Apple.

Brett King, author of Bank 2.0: How Customer Behavior and Technology Will Change the Future of Financial Services, wrote, “When historians look back at the massive shift in banking and the rapid decline in branch activity, the death of cheques, plastic and cash — the inflection point will be the creation of the App Phone. This is perhaps Steve Jobs’ greatest legacy for banking today. He has changed the way our customers behave, he’s changed the way we think, and the way we demand service. Thanks to Steve Jobs’ vision — banking of the future will be about banking embedded everyday into our life, a true utility, and no longer a place you go.”

You can read Brett’s full article in the Huffington Post.

How do you think Steve Jobs changed the banking industry? Do you agree with Brett King? Let us know in the comments section below, or Tweet @bankingdotcom.

 

The World’s Most Innovative Companies: Where Are the Financial Institutions?

Forbes recently released its list of the World’s Most Innovative Companies, aiming to answer the question, “Which leading-edge corporations are most likely to succeed now and in the future?”

The list, which is based on an eight-year study, used a unique methodology to calculate the companies that made the final cut. Rather than ask executives to vote on which companies should appear, factors such as financial performance, investors’ bids on stock prices and expectations of future results (new products, services, markets) determined the companies on the list.

Tech giants such as Apple, Amazon, Google, Oracle, Intuit and Salesforce were on the list, as well as consumer facing companies Starbucks, PepsiCo and Hershey.  One sector without a large presence on this list: financial institutions. You can view the complete list here.

As the Banking.com staff read through the list, we wondered, why aren’t there more financial institutions on this list? What are your thoughts? Leave us a message in the comments section below.