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What We’re Reading: Mobile Money, Outages and PFM

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.

JPMorgan Chase Endures Website Outage

American Banker

JPMorgan Chase’s (JPM) website was shut down for some Friday, stopping bank customers from retrieving their accounts. The New York bank took to Twitter to tell customers its online banking was “experiencing intermittent issues” that the company was working to resolve. The outage endured for a few hours, bank spokesman Tom Kelly told American Banker. “We’re back to normal response times now,” Kelly said. JPMorgan Chase is researching the cause of the outage, Kelly said.

Moven From Mobile Banking to Mobile Money

Bank Marketing Strategy

February is definitely a pivotal month for the start-up previously known as Movenbank, having changed its name to Moven, winning the best of show honors at Finovate Europe and gearing up for a February 25 closed beta launch of its mobile-optimized financial services application. Similar to Simple, while not having a banking charter, Moven provides a unique customer experience interface with a traditional banking organization working in the background (with banking licenses, FDIC insurance, etc.).

A Look At What Citi Is Doing With Online Platform

Credit Union Journal

After Forrester Research dubbed Citi’s online banking site the best in the U.S. recently, Tracey Weber, Citigroup’s head of internet and mobile banking and Bank Technology News’ Mobile Banker of the Year for 2012, spoke about the bank’s latest initiatives. The developers made the site simpler, cleaner, and easier to navigate, she says. “We elevated a lot of the quick tasks that you do on a regular basis, like paying a bill, without having to continually have to find your way back to the dashboard. We also integrated PFM and account integration into the dashboard.” Citi partners with Yodlee for PFM and account aggregation.

Four Common Misjudgments About Whether Consumers Want PFM

Javelin Strategy & Research Blog

There is a spirited conversation occurring in a Personal Finance Management subgroup on LinkedIn, spurred by Mary Wisniewski’s column in American Banker about how “PFM Defies Definition.” The heart of the discussion points to the growing awareness that PFM must break free from the 1980s definition of budgeting and investment tools for do-it-yourself PC enthusiasts with a masochistic delight for details, tracking, and quantitative analysis. The financial services industry makes a number of fundamental mistakes in their thinking and approach to PFM.

Banks to spend $118B on tech, mobile banking in 2013

Mobile Payments Today

Retail banks worldwide will increase their IT spending by 3.4 percent this year — to a total of $118.6 billion. Industry analysts at Ovum predict that spending in Asia will rise 5.1 percent, followed by North America at 3.3 percent, and Europe at 1.8 percent. In a new business trends report, Ovum said that mobile banking would be a “clear IT investment priority in 2013.” The company suggested that total spending for online channels — including online and mobile browser-based services — will grow by 6.2 percent in 2013.

More Than 12 Million Identity Fraud Victims in 2012 According to Latest Javelin Strategy & Research Report

PYMNTS.com

The 2013 Identity Fraud Report released today by Javelin Strategy & Research reports that in 2012 identity fraud incidents increased by more than one million victims and fraudsters stole more than $21 billion, the highest amount since 2009. The study found 12.6 million victims of identity fraud in the United States in the past year, which equates to 1 victim every 3 seconds. The report also found that nearly 1 in 4 data breach letter recipients became a victim of identity fraud, with breaches involving Social Security numbers to be the most damaging. Over the past year, companies are responding more quickly which means a consumer’s information is being misused for fewer days than ever before, and the mean cost per victim has been flattening.

Finance and the American poor: Margin calls

The Economist

In December the Federal Deposit Insurance Corporation (FDIC) released a survey that found roughly one in 12 American households, or some 17m adults, are “unbanked”, meaning they lack a current or savings account. The survey also found that one in every five American households is “underbanked”, meaning that they have a bank account but also rely on alternative services–typically, high-cost products such as payday loans, cheque-cashing services, non-bank money orders or pawn shops. Not all the unbanked are poor, nor do all poor people lack bank accounts. But the rate of the unbanked among low-income households (defined in the FDIC survey as those with an annual income below $15,000) is more than three times the overall rate.

Mobile Banking Now Vital To Customer Acquisition

The Financial Brand

A survey recently fielded on FindABetterBank uncovered that 88% of shoppers who said mobile banking is a “must have” feature are already mobile banking users. Therefore, as more consumers download their bank’s mobile apps and begin using them, you can expect the number of consumers demanding mobile banking when they’re shopping for a new institution to increase steadily. Few people, however, defect from an institution simply because mobile banking isn’t offered.

Every company now a digital business

ZDNet

The convergence of social media, mobile computing, analytics and the cloud is transforming the way businesses operate. Companies that adopt available technologies to “go digital” will be better positioned to take advantage of rapidly shifting business opportunities and leap ahead of the competition, according to Accenture’s Technology Vision 2013 report. Since technology is now core to virtually every aspect of a business, every company is a digital business and all senior leaders–not just CIOs–must be able to understand, embrace and drive value from new technologies that affect their organizations, it added.

RPE: Measuring Employee Worth

Citigroup is one of the biggest financial services corporations in the world, so it’s no surprise that the sudden switch in the company’s two top executive spots continues to generate considerable attention. It’s even being reported that the Securities and Exchange Commission is investigating the circumstances behind the high-level shakeup.

But there’s another aspect to the story that’s also intriguing: While newly appointed CEO Michael Corbat has announced plans to optimize efficiencies at the venerable institution, the buzz is that he’s got his work cut out for him. That’s because, by some accounts at least, Citi has one of Wall Street’s least productive workforces.

The numbers seem to bear out that assertion. Citigroup generated about $206,000 in revenue per employee (RPE) through the first nine months of the year, down 7.5% from the year-ago period. Some other institutions, meanwhile, posted increases during the same time span. This comes after the cutting of 100,000 jobs during the tenure of outgoing CEO Vikram Pandit. If current trends hold, according to estimates from Bloomberg, Citi will be one of only a half-dozen major lenders with a lower RPE than it had in 2005.

It’s easy—but according to experts, quite wrong—to overestimate the RPE metric when judging the business performance of not just banks but organizations in other industries. “There’s only one metric that really matters when measuring HR. It’s called Revenue per Employee (RPE),” claims a recent post in The HR Capitalist. “That’s all you need to know. The rest is BS.” That sentiment is echoed in other business performance sources as well.

So given the importance of this metric, how does the industry as a whole and, Citi in particular, stack up against other high-profile companies and industries?

24/7 Wall Street, which offers commentary for equity investors, did just such an analysis recently—tagging it as a study of companies with the ‘least valuable employees’—and the results make for interesting reading. Retailers and market-facing restaurant chains don’t fare too well: Sears (which also owns other brands) makes an appearance with an RPE of $139,000, as does Gap, with an RPE of $113,000, and JCPenney with $98,000. Starbucks may have some problems brewing at $89,000, and the stories of Mcjobs at McDonald’s may be true; the fast-food giant shows an RPE of only $65,000.

On the other side of the coin is Apple—the perfect company with the perfect products and the perfect market cap has one of the highest RPEs of any public corporation: $2.4 million. Even other flourishing tech brands can’t match that; for example, despite the much smaller employee base, Facebook (and coincidentally Google) come in at $1.2 million.

But here’s an element left out of this equation. Apple has come under attack for outsourcing much of its manufacturing; iPads and iPhones, among other devices, are made at corporations in China and elsewhere that pay a significantly smaller wage than Apple pays its own employees. There have also been numerous reports of less-than-ideal working conditions at some of these facilities, and even a recent strike at one. If Apple built its products in-house, what would its RPE be then? And how would the market judge its performance?

Futurists frequently question the need for a central facility in a business environment where online collaboration technologies negate the need for a physical workplace. With business and support professionals virtually assembled around the world, it’s even possible to imagine a business world without Wall Street. But what other effects would this have?

RPE is surely a vital statistic, and it will be interesting to see how the new management team at Citigroup goes about raising productivity. But it’s also important to remember that in a complex global ecosystem, where jobs can be passed around between different economies and regions almost at will, it may be only one factor (and not the only factor) in gauging how good a company is at doing what it does.

What do you think about RPE? Let us know by tweeting at @bankingdotcom or replying in the comments section below.

What We’re Reading: Mobile Money, Outages and PFM

RPE: Measuring Employee Worth

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