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What We’re Reading: Cybersecurity, Tablets in CUs and Consumer Spending

May 13, 2013 By Banking.com Staff Leave a Comment

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.

Cybersecurity Should Not Come at Expense of Privacy: White House

American Banker

The White House says the nation needs new laws to reinforce its cyber defenses but that the push should not come at the cost of privacy. The House of Representatives on April 18 passed the Cyber Intelligence Sharing and Protection Act, or CISPA, which would encourage owners of financial networks, utility grids and other critical infrastructure to share information about digital threats with the government and one another. The White House has threatened to veto the bill, saying it lacks sufficient privacy protections. Civil liberties groups and other critics of the measure charge that it would allow companies to share people’s emails and text messages with U.S. intelligence agencies.

Small Business Owners Big on Mobile Technology

American Banker

A survey of 1,305 small business owners conducted by Constant Contact in March found that 66% currently use a mobile device such as a smartphone or tablet in their work. Of the non-mobile users, 65% have no plans to use a mobile device in the future, many citing a lack of demand for mobile access from their customers. This segment is partial to Apple devices, according to the survey — 66% use iPhones, while 39% use Android phones. About 49% use iPads; only 15% use Android tablets.

Keep Wal-Mart Out of Financial Services, Bankers Ask

BusinessWeek

A group of bankers advising the Federal Reserve urged U.S. regulators to consider preventing Wal-Mart Stores Inc. from offering some financial services. The Federal Advisory Council, a body of bankers that includes PNC Financial Services Group Inc. and BB&T Corp., said at a Dec. 19 meeting that Wal-Mart’s sales of prepaid cards warranted greater federal oversight. Minutes of the meeting were obtained yesterday under the Freedom of Information Act.

Consumers spending nearly 10% more than in 2009

CNN Money

American consumers are spending nearly 10% more than they did four years ago when the country was reeling from the effects of the financial crisis, according to an analysis of the spending behaviors of millions of Mint.com account holders. In the first quarter of 2013, the average household spent roughly $4,220 per month — up from about $3,870 in the same period of 2009, according to the inflation-adjusted consumer spending index released Wednesday by Intuit, which owns personal finance site Mint.com.

Why CUs Can’t Afford To Be Left Behind On Tablets

Credit Union Journal

It’s estimated that nearly half of the U.S. Internet population will be using tablets by 2014, which means increasing pressure on credit unions to adapt and conform to the trend. “The proliferation of tablet devices in the U.S alone is impacting everyone who manages their finances via a digital channel, including credit union members,” said Kenneth Hans, executive director of Blackstone Technology Group’s Financial Services Practice. “Much like banks, credit unions are looking for ways to cater to this latest form-factor that offers the power of a laptop in a much smaller and convenient size.” Among credit unions encouraging members to use tablets is the $5.3-billion Suncoast Schools FCU, which has 549,303 members that it has traditionally served via its 53 branches, but mobile devices such as tablets have changed that equation somewhat.

Credit Cards – Game ON!

Gonzo Banker

Credit cards in circulation hit a peak in 2007 at 710 million cards, according to a 2013 Nilson Report. Then the crash of 2008 hit, the Card Act went into play in 2009, and consumer spending changed. From the low point in 2010, the number of cards increased by roughly 50 million in 2011 and continues to climb today, when we have 520 million cards in circulation. Credit card interchange has not been Durbin-damaged as of yet, and interchange is still high. In the United States, 10 issuers own 85.4% of the cards on the market (Source: The Nilson Report, February 2013).

New Fed Report: U.S Mobile Payments Landscape – Two Years Later

Payments News

The Federal Reserve Bank of Boston in conjunction with the Federal Reserve Bank of Atlanta has just published a new report titled “U.S. Mobile Payments Landscape – Two Years Later.” Based upon ongoing meetings of the Mobile Payments Industry Workgroup (MPIW) convened by the Federal Reserve, the report updates an earlier paper from 2011. It examines changes in the evolution of mobile POS retail payments over the past two years, characterized by an expanding fragmented market environment and frequent technology innovations.

Filed Under Industry News Tagged With American Banker, behavior, credit cards, credit unions, mobile, mobile payments, payments, spending, tablet, Wal-Mart, what we're reading

Imagining a Cashless Future

November 12, 2012 By Melanie Friedrichs Leave a Comment

*This post originally appeared on the Andera Blog

Working for a financial software company, I’m often struck by how fast things are changing. Financial innovations come in many shapes and sizes from many different places, but for the most part they all follow a general trend: they turn physical processes into digital ones. The so-called “payments revolution” has often made me wonder what will happen when innovation manages to displace the most physical aspect of finance, cash.

In the financial technology world, cash is so uncool that hardly anyone talks about it anymore. The alternative to a mobile payment is a debit card, and the alternative to a debit card is a prepaid card. ATMs get a shout out every once in a while, but that 3-letter acronym comes up less often than either P2P or RDC.

Perhaps that’s because most of us believe, at least partially, that cash is on its way out. Michael Woodford, one of the world’s preeminent monetary economists and author of a paper called “Monetary Policy in a World Without Money,” put it this way:

“It is possible to imagine that in the coming century the development of electronic payments systems could not only substitute for the use of currency in transactions, but also eliminate any advantage of clearing payments through accounts held at the central bank.” (Interest and Prices, 2003).

That’s economist for “At some point, there will be no cash.” The idea makes sense; I use my debit card for almost everything, and when I need to repay a friend or split the bill, I prefer to send P2P payments from my mobile banking app. I really only keep cash in my wallet for two reasons: the local bar and the bagel place on the corner. Even most food trucks in my area use Square. That said, we’re still a ways out from totally getting rid of the nasty green paper.

When I imagine a cashless future, I foresee three things:

1) Technology will make things a little easier.

When they were first introduced in the 1970s, ATMs were a huge leap forward. Consumers could save time they previously spent visiting the branch to withdraw cash. They could choose to withdraw more frequently and feel safer carrying less cash in their pockets. The spread of credit, then debit, and now prepaid cards has had the same effect. Like most participants in the financial technology space, I’m absolutely gaga about mobile payments, and can’t wait until I can leave the house with only my mobile phone. It’s also easy to imagine how advancements in cyber-security will gradually reduce the risk of identity theft. No hassle, no wallet, no risk – what a world that will be.

2) Banks will consolidate – or evolve.

Right now, many of the features that banks compete on, including ATM networks, branch networks, free checks, and early “cashless” technologies like P2P payments, will, in a totally cashless economy, become moot points. As money moves to the cloud, locality will matter less and less, and community financial institutions sheltered by brick-and-mortar monopolies will face competition from every corner of the country. Hundreds of banks have closed or merged with national banks since the financial crisis, and the onward marching wave of technological change will only continue to whittle down the list of U.S. financial institutions. The ones that fail to adopt the latest mobile and online technologies will go first.

As I see it, the banks of the future will live or die on the success of two things: their lending strategy and the quality of their customer experience. Evaluating the risk and return of loans and investments will continue to be difficult long after cash is gone. As it is today, some banks will be better at it than others. If they can collect more from loans, they will be able to offer more on deposit accounts and attract customers away from competitive institutions.

By customer experience, I don’t mean the ease of withdrawing or depositing money. In a cashless economy, neither of those transactions will take place. Instead, I predict that institutions will partner or expand to offer a wider range of financial services, such as brokerage, insurance, and financial planning under one roof or rather, on one website.

3) The popular notion of money will change

I am most curious to see what will happen to the idea of money in a cashless future. When I say money, the first image that probably comes to mind is a green dollar bill, and most people conceive of money as a limited, concrete asset like gold that we chase around and fight over and trade for things like food and shoes. Money is actually a bit more complicated, and its supply has as much to do with credit as it does with the US Treasury printing press. (When you hear, “The Fed is printing money,” what it’s actually doing is manipulating the banking system into lending and borrowing a little more.) In a cashless economy, how will we talk about money? Will our movies still feature the symbolic suitcase full of 100 dollar bills? Will central bankers and policy wonks still talk about “ the money supply“? Will we spend more with nothing tangible to hold onto or will we spend less when every transaction is digitially traceable (I’m thinking about PFM here)? I’m not sure.

A cashless future may be a long way off, but I genuinely believe that I could be living in it before I die. I’m only 22, so that’s about 60 years. 60 years ago, Walt founded Disney, Walton founded Wal-Mart, and most of the banks on Wall Street were already decades old. Perhaps its time to start preparing.

Melanie Freidrichs: Melanie likes writing and data. She “coordinates,” among other things, Andera’s blog, Andera’s webinars and Andera’s twitter feed. In addition to financial technology and marketing, her favorite topics to blog about include financial regulation, monetary policy, and increasing access to financial services.

She is a member of the first class of Venture for America, a two-year fellowship that seeks to revitalize American urban centers through entrepreneurship by matching recent college graduates with start-ups in low-income cities.

Melanie grew up in Bethesda Maryland, and received an A.B. in Economics from Brown University in 2012. She thinks Providence is a pretty cool town.

Filed Under Industry News Tagged With andera, ATM, bank, banking, cashless, credit, credit union, credit unions, debit, future, payments

Why There Isn’t a Bank Transfer Day in 2012

November 5, 2012 By Simon Zhen Leave a Comment

*This post originally appeared on MyBankTracker

From June 2011 to June 2012, credit unions reported a year-to-year increase of more than 2.16 million memberships — the largest influx of members in the past decade, according to data by the Credit Union National Association.

In the prior year, there was only a 552,890-membership increase at credit unions.

The four-fold jump in new memberships is easily attributed to last year’s Bank Transfer Day (held Nov. 5), the consumer movement that rallied fed-up bank customers to close their fee-riddled accounts and move their money to credit unions.

The exact number of consumers who made the switch because of Bank Transfer Day is difficult to determine, but the movement did push credit unions into the spotlight.

This year, however, there will be no official Bank Transfer Day to give banks a run for their customers and deposits, said Kristen Christian, the creator of Bank Transfer Day.

Christian, a former art-gallery owner, now spends most of her time attached to her notebook PC while she journeys throughout the country, and other parts of the world, as a speaker/consultant for credit unions.

For instance, earlier this month, Christian attended a credit-union conference in Pennsylvania and spoke on ways that credit unions can market to younger generations through social media.

“It’s been such an incredible opportunity to promote consumer empowerment and economic sustainability while helping cooperatives [financial institutions owned and operated by its members] reach the next generation of members,” Christian said.

But, her new role isn’t the main reason that there won’t be another Bank Transfer Day this year. Rather, given that 2012 is an election year, Christian does not want to distract consumers from exercising their right to vote.

“While we’ve seen significant media attention dedicated to the Presidential race, I’ve yet to see significant steam for Senate elections,” said Christian, who aims to draw support forSenate bill S. 2231. The bill is an amendment to the Federal Credit Union Act that would more than double the lending cap for credit unions from 12.25 percent of assets to 27.5 percent. Christian says this would enable credit unions to promote the growth of local small businesses through low-interest rate loans. “This piece of legislation has a potential to create 140,000 jobs at no cost, yet lacks the support in Senate many voters feel it deserves.”

Non-violence

Additionally, Christian does not want any violence to break out during the promotion of another Bank Transfer Day.

Last year, Bank Transfer Day happened to coincide with Occupy Wall Street, another non-affiliated consumer movement. OWS protesters organized a “March on the Banks” event that gathered bank customers to close their accounts, which occurred in a less-than-civil fashion at some banks. At one Citibank branch in New York City, protesters were locked in the branch — until police arrived — because they were holding a protest in the middle of the bank.

“Being a pacifist by nature, I was disgusted by the disruption caused last year in the name of Bank Transfer Day,” Christian added. She encourages consumers to close their bank accounts independently and respectfully. “These front line employees have absolutely no control over bank policies and certainly didn’t deserve the abuse heaped upon them.”

Occupy Wall Street has been unable to rebuild momentum this year and its impact has diminished significantly. If the movement fails to return in the future, would Christian promote Bank Transfer Day again? Probably not.

“As people constantly evolve, I think social movements should as well,” said Christian, who’ll commemorate Bank Transfer Day for many years to come. “In many ways, it’s a celebration of the principles that bore the American revolution: rallying together to inform one another and defend the communities we’ve worked so hard to build.”

This Nov. 5, Christian will be in Baton Rouge, La. to raise awareness for Senate bill S. 2331.

Consumers don’t need an official day to move their money from banks that are treating them unfairly. As Christian and credit unions would say, “Every day is Bank Transfer Day.”

To anyone or any organization that seeks to effect a similar consumer-advocacy campaign, Christian preaches: “The best advice I can give to anyone who seeks to implement significant change is to approach their efforts with patience, reason, love and a sense of humor. I’ve found love to be far more effective than hatred.”

How has your organization seen the effects of Bank Transfer Day in the last year? Let us know in the comments below!

Filed Under For Financial Institutions Tagged With Bank Transfer Day, banking, banks, credit unions, elections

FI Spotlight: University of Kentucky Federal Credit Union

March 30, 2012 By Banking.com Staff 2 Comments

Banks and credit unions have been creating some interesting campaigns to attract customers leaving large corporate banks. To continue the momentum from Bank Transfer Day, University of Kentucky Federal Credit Union launched the “lipstick on a bank” campaign to educate consumers and increase members.

In order to build credibility and raise awareness of the benefits offered by credit unions, University of Kentucky FCU launched the campaign and microsite at the beginning of 2012 to demonstrate that, “You can put lipstick on a bank, but it’s still a bank.” The campaign and microsite focused on three main benefits to consumers when they join a credit union like University of Kentucky FCU: membership, checking and loans, particularly emphasizing lower fees and better rates.

Megin Morgan, member development specialist at University of Kentucky FCU says of the campaign, “Our goal was to keep it simple and straightforward and to demonstrate why going with a credit union was beneficial.” The credit union has already seen a large increase in new accounts from the campaign which ran during the months of January and February 2012. With 706 new accounts in 2012 reported in early March, and 18 percent increase from 2011, Morgan notes, “We saw this as a successful credit union awareness campaign that seemed to get people’s attention. We could possibly re-run it again in the near future to keep the credit union movement momentum going.”

You can read more about University of Kentucky FCU’s campaign from Credit Unions Online here.

How are you bringing new customers and members to your financial institution? Tweet at @Bankingdotcom or let us know in the comments below.

Think your FI deserves special recognition? Send information to info@banking2020.com.

Filed Under Financial Institution Spotlights Tagged With credit unions, FI Spotlight, University of Kentucky FCU

Millenniels, Mirth, and Money: Making Gen Y Laugh and Learn Pays for Credit Unions (Part II)

February 28, 2012 By Kathy Klotz-Guest 1 Comment

This is the second of a three part series on Gen Y and credit unions by guest author, Kathy Klotz-Guest. The first post was published last week, and can be read here. The second part of this series discusses using videos, contests and social media. Read more below:

Video: Gen Y consumers watch a lot of online video (research firm ComScore reports the average American viewed over 23 hours of video in the month of December 2011) and, today, a growing number are watching them on mobile devices. Video is your chance to connect with this audience at a human level in ways that traditional media cannot. Based on research I have conducted with more than 100 companies, the most important factor in video success is having a great story that is relevant to your audience. If your video happens to go viral, that’s great. Your goal, however, is to connect with your audience in a meaningful way and prompt them to take some specific call to action.

If computer giant IBM, viewed as stodgy and out of touch just 10 years ago, can change its image and poke fun of itself in the now famous “Art of the Sale” videos, so can credit unions. Video should humanize your brand, not bore people. That’s what collateral is for! There are credit unions creating some innovative and funny videos. One of the best videos to speak about the benefits of credit unions is a spoof of Apple’s celebrated Mac v. PC ads (Bankerspank.com or YouTube). The younger, cool guy represents the credit union, while the stodgy, “stuffed suit” represents the bank.

This video series, a handful in all, works well for a number of reasons. First, it’s a funny parody of well-known commercials. Secondly, it uses elements of “story” and metaphor to make its points, and to connect on a human level. The fact that a Gen Y actor plays the ‘cool’ role of the credit union—the banking equivalent of a Mac—is salient. Thirdly, the video series also educates younger viewers on the important differences between banks and credit unions without trying to sell a particular credit union.

Finally, it upends expectations about the way credit unions are marketed. It’s even okay for your credit union to poke fun at itself and its history (for example, maybe you haven’t always been on the vanguard of technology adoption)—as long as you demonstrate that you have changed and are looking to create better relationships with younger customers. Humor shows humility, and it signals to your audience, “Hey! We get it. We know how we have been perceived, and we’re ready to change.”

Another example of a fun video that shows credit unions with personality is “The Winning Team” by University of Kentucky (UK) Federal Credit Union. It shows a handful of bored Gen Y credit union employees who start an impromptu baseball game in the office. The fun is unexpectedly endorsed by the boss. Besides providing a great laugh, this video did not cost much to produce. Quality content is not the same as quality production. Content trumps production values, according to my research on video storytelling. The potency of the message is an important one: This credit union believes fun and service are all parts of a compatible winning team that serves, and is served by, Gen Y members. This matters, given that the credit union is associated with a university system. It’s a good example of what a lighthearted tone (and a relevant message) without a heavy budget can do. And just as with the Credit Union v. Bank video, this video is short. The ideal video is under two minutes.

Contests: Social media also enables content to be interactive and shared in a way traditional media does not, so take advantage of its participatory elements. People love to create and share their own content. Allowing users to participate by creating their own media (CGM, consumer-generated media) is a way to increase engagement and fun and enable your audience to help tell your story to peers. It’s also a great way to stretch your marketing budget and ensure that content is created by your intended audience with their own needs in mind. Fairfax Credit Union in Virginia launched a video contest for the Gen Y Extreme Checking Account commercial (on YouTube). They invited members of Gen Y to create short 30-second videos about the credit union’s new Gen Y Extreme Checking service.

This effort worked on a number of levels. First, it facilitated awareness and engaged Gen Y members to create content and, in turn, educate their peers about the new “Extreme” service. Secondly, the videos were funny, absurd and odd— an authentic reflection of Gen Y humor created by Gen Y participants. Finally, by inviting members to create their own videos, the credit union expanded its reach without having to create all of its own content. Often, an organization’s best storytellers come from outside its walls. Your engaged fans are your best and most credible referral sources. Just remember to make it fun, encourage creativity and allow them to share their creations on Facebook, YouTube and Twitter.

Stay tuned for the last post in this series!

About Kathy Klotz-Guest: Kathy Klotz-Guest, CEO of Keeping it Human, helps organizations connect with audiences on a human level and get better marketing results. In her 20-year career, she has led successful marketing and communications strategies for high-tech, financial and services firms. A founding fellow for the Society for New Communications Research and comic improviser with the ComedySportz San Jose Rec League, she can be reached at kathy@keepingithuman.com, or via LinkedIn and Twitter.

Filed Under For Financial Institutions Tagged With credit unions, gen y, social media, video

Millenniels, Mirth, and Money: Making Gen Y Laugh and Learn Pays for Credit Unions (Part I)

February 23, 2012 By Kathy Klotz-Guest Leave a Comment

This is the first of a three part series on Gen Y by guest author, Kathy Klotz-Guest.

Today’s financial institutions, like other industry sectors, recognize how important it is to reach out to the Generation Y cohort of 18- to 30-year-olds. Traditional, conservative and stuffy marketing approaches do not work with these digital natives—and neither does throwing social media technology or “cool” marketing on top of existing approaches. While Gen Y likes technology, a lot of interaction and great deals, they also want you to embrace fun and humor, and help them achieve their goals. They want you to change the way you do business in order to earn theirs.

One area where credit unions already have an advantage over banks is in developing deeper customer relationships, and social media can facilitate even richer connections. The good news is there are many ways to increase your relevance by using serious technology combined with a not-so-serious tone.

After all, marketing should be fun if you’re doing it right.

Humor me! Social Technology Meets Fun

In its research, Forrester found that Gen Y members value humor—even odd humor—and embrace it in business. They also view banks with a bit more apprehension, as they feel most financial institutions “don’t get them.” Consequently, it takes not only an investment in technology to reach this group; it also requires a commitment to changing the content of your communications. The key is to communicate that your credit union understands what Gen Y values. And humor is a way to build that generational bridge.

That Gen Y values humor is great news: it can help your marketing cut through lots of noise in a crowded market. Additionally, fun as a wrapper for great content adds value. There is no reason great information has to be delivered in a stodgy way. However, fun without a targeted, relevant approach is pandering.

It’s not enough to use mobile technology and web 2.0 platforms. A powerful and credible marketing approach to Gen Y must involve the integration of social technologies, the right messaging and personality, and an engaging, interactive user experience. Social media, like all great customer experiences, is about connecting with people. Otherwise, they would have called it anti-social media!

Work That Humor Muscle

So, how can you integrate humor with technology? First, it is important to understand what fun and humor are and how to make them pay off. Funny is great; yet, just having a fun attitude that makes customers smile is an important step in the right direction.

Here’s the most important point to remember: Humor is about the element of surprise. The question to ask isn’t, “How can we make people laugh?” Trying to be funny is a needlessly high and daunting bar to reach. Thus, the right question to consider is, “How can we surprise our audience?” When expectations are inverted, we are delighted. Here is the great news: because banking hasn’t exactly been known as a “fun factory,” there are many things your credit union can do to upend expectations and change the way you are perceived. Consider integrating fun, humor and technology into the following elements as part of your larger marketing strategy: video, contests, apps and games, and social networks.

Stay tuned the remainder of this series!

Filed Under For Financial Institutions Tagged With credit unions, gen y

Video: The Mobile Lifestyle

January 5, 2012 By Banking.com Staff Leave a Comment

Intuit Financial Services’ John Flora and Laurie Holmes of Service Credit Union discuss the mobile lifestyle in a video filmed at the BAI Retail Delivery Conference.

Filed Under Videos Tagged With credit unions, mobile banking, mobile lifestyle, video

How to Attract Gen Y Customers and Members

November 29, 2011 By Banking.com Staff Leave a Comment

Many financial institutions are vying for the coveted attention of that elusive generation, Gen Y. With pressure on the banking giants from younger generations to reduce hidden fees and increase transparency through movements like Occupy Wall Street and Bank Transfer Day, credit unions and smaller community banks are reaping the rewards.

However, some institutions are still unsure how to market their offerings to the younger, tech-savvy generations. Young and Free Indiana recently released a video that addresses concerns of some Gen Y-ers that credit unions may be too local. As Currency Marketing’s president and Creative Director notes in a blog post, “technology, shared branching and ATM networks go a long way to solving this problem, but the biggest hurdle is perception and understanding.”

See how Young and Free Indiana navigates attracting younger members in the video below.

How are you marketing your offerings to a younger audience? Are you helping to educate your community on the national reach of your financial institution? Let us know by tweeting @Bankingdotcom or responding in the comments section below.

Filed Under Videos Tagged With credit unions, customers and members, gen y

Banking Industry Leaders Discuss Findings of Intuit Financial Management Survey

November 4, 2011 By Jim Marous Leave a Comment

*This blog was originally posted on Bank Marketing Strategy by Jim Marous. Jim is a marketing services leader focused on building strategic solutions for the financial services industry. You can follow him on Twitter @JimMarous or connect on LinkedIn.

In conjunction with the release of Intuit Financial Services’ 4th Annual Financial Management Survey, Banking.com hosted a Twitter Town Hall yesterday, bringing together financial industry leaders to discuss loyalty and channel migration as well as some of the challenges and opportunities facing the banking industry. The following is a recap of the very robust one hour dialogue. (The complete transcript can be found using #IFSsurvey on Twitter)

The Town Hall discussion began around the issue of customer loyalty and the finding that many consumers thought their financial provider was not ‘in touch’ with their needs. Given the events of the past week, where many large banks reversed decisions around the implementation of fees due to highly vocal negative sentiment amplified by social media and credit union trade group support, most participants believed that banks are not leveraging current insight and technology to make better decisions and provide value added service.

Tobin Lee (@Tobin_Lee), Intuit Financial Services spokesperson stated, “It is time for a banker mindset shift; cultivating deeper relationships, more meaningful engagement and stronger advocacy for growth”. Campbell Edlund from EMI (@EMI_mktg4sales) added, “These findings provide a very strong argument for a communications plan around the customer lifecycle”.

The already robust dialogue really took off as the discussion moved to the acceptance and utilization of banking channels (especially mobile and tablet banking). Bradley Leimer (@leimer) from Mechanics Bank in the San Francisco Bay area believed mobile strategy will be the key to future engagement due to the portability and ‘always on’ nature of the device. He also believed that the correlation between mobile banking and smartphone use (41% of respondents owned a smartphone) could indicate a lower engagement with financial technology in general for non-smartphone users.

Edlund added that while there is currently a higher penetration of smartphones than tablets, tablets can not be ignored by banks since Oracle found that tablet ownership is expected to increase significantly in the next year. She also warned that we need to be cautious not to get ahead of the acceptance curve. . . “we always underestimate inertia”. Brett King (@brettking), author of Bank 2.0 and founder of Movenbank went a step further stating that within 3 years all bank websites will need to be built for tablets first. He also believed that branches will continue to diminish in presence and utility (according to the study, 27% of respondents still visit their branch once a month in addition to ATM visits).

Mark Zmarzly (@BankMarketing) did not believe bricks and mortar would completely go away, but definitely felt the relevance of branches will change. “It’s easy to say branches will go away, but is that realistic? They have to evolve, but customers will never let them become 100% irrelevant.” King responded that with the drop in branch transactions, the economics of the branch are not working. I (@jimmarous) illustrated the model of Boeing Employees Credit Union in Seattle, where only 2 of the 40 branch network have tellers, while the installation of multiple ATMs at offices and around the city have an average of 10,000+ transactions each. 94% of the transactions at BECU are done electronically, according to Howie Wu (@howie_wu) from the credit union.

“Relevance is the key to banking for tomorrow,” stated King. “By 2015, mobile will be the #1 day-to-day channel, OLB #2 with the branch network being #5. The challenge for mobile and online will be developing great customer journeys”. King doesn’t believe these journeys exist today and believes the goal should be to have banking so pervasive that it is not tied to a branch, device or website, but is everywhere customers are.

Edlund pointed to the retail industry as a forerunner for what we will see in financial services. “Social and tablets will change the landscape in banking as they have in retailing”, Edlund stated. (During the Twitter Town Hall, there was even a discussion of the integration of TV as a channel for banking). Representatives from EMI in Boston (EMI_mktg4banks) emphasized that we will continue to see a blurring of all channels with social media providing some of the glue for enhanced communication. Gamification and location-based rewards were also seen as a key elements of engagement by Leimer and Edlund.

A conundrum was discussed with regard to the needs of small businesses where checks still prevail and the need for branches. King believed that we will see significant attention paid to mobile payments for businesses in the next couple years, while I added that tablet apps for business are also being developed to respond to the needs of the business community. NFC was also seen as a game changer with regard to the need for branches for small businesses. Bob Williams (@bob_williams) from Harland Clarke believed that, while check usage is definitely dropping, there are much greater efficiencies today than in the past with RDC and other electronic tools.

It was clear from the Intuit research that was just released, the Bank 2020 research released in April, and the discussion during the Twitter Town Hall today that there is significant disruption in the banking industry with regards to channel support and device utilization. The consumer movement to new banking channels is mirroring the movement to more sophisticated devices such as smartphones and tablets. Many consumers are NOT choosing one device or channel over another, but are using multiple devices depending on their personal needs.

Consumer desire for an integrated banking experience without friction will need to be supported by banking organizations in the future. Distribution networks (whether tangible or intangible) will need to support an expanding array of capabilities that may include integration within retail or social sites as opposed to standing alone.

As I stated to the participants of the Twitter Town Hall at the end of today’s discussion, “If banks are not prepared for the channel migration that is already underway, they may experience the impact of ‘Bank Transfer Decade’”.

Note: A summary of the findings of Intuit Financial Services’ 4th Annual Financial Management Survey and recently released related research is available in my previous Bank Marketing Strategy blog post.

If you weren’t able to join us, what are your thoughts around the impact of channel shift away from the branches and towards other media? Will we see the elimination of branches completely? Will another device or technology unseat smartphones and tablets?

Leave us a comment below, or Tweet at the author @JimMarous.

Filed Under Social Media, Surveys Tagged With #IFSsurvey, Banking 2020, banks, credit unions, Intuit Financial Services, survey, twitter

FI Spotlight: Des Moines Police Officers’ Credit Union

August 25, 2011 By Banking.com Staff 2 Comments

Iowa-based Des Moines Police Officers’ CU kicked off its mobile banking offerings by increasing adoption 45 percent in just four months. To increase adoption of the mobile web banking service, DMPOCU held a contest sponsored by Credit Union Service Organization (CUSO), CU*Answers , and the Xtend CUSO, which gave members a chance to win an Apple iPad for every Mobile Web Banking log-in. DMPOCU CEO Janet Lintin is looking to expand the credit union’s mobile banking capabilities and provides insights for other financial organizations looking to increase mobile banking adoption.

“Focus on people who are already comfortable using electronic delivery, including home banking, bill pay and e-statements, and then leverage those systems to carry your message.”

Des Moines Police Officers’ CU’s (DMPOCU) “Me 247 Mobile Web Banking” gets its mobile-optimized website from CU*Answers . While the mobile web product is free, CU*Answers charges credit unions for “It’s Me 247 SMS Text Banking” and “Mobile App Banking” products.

You can read more about Des Moines Police Officers’ CU’s mobile banking offering here.

How are you helping your members go mobile? Let us know by tweeting @bankingdotcom or adding your thoughts in the comment section below.

Filed Under Financial Institution Spotlights Tagged With credit unions, Des Moines Police Officers' Credit Union, FI Spotlight, mobile banking