What We’re Reading: Finovate, Consumer Spending and Security Technology

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.

 

  • The Buzz at Finovate: New Security Tech

American Banker

Security has taken on increased importance this year in light of recent data breaches that have put millions of dollars on the line and the ongoing threat of distributed denial of service attacks. Reflecting this industry-wide sense of alarm, at this week’s FinovateSpring there were several startups focused solely on providing authentication to bank customers. “Information security has always been a space with a ton of vendors, both small and large,” says Jacob Jegher, a Celent senior analyst. “[But] it’s great to see increased emphasis on security at Finovate.” He says it’s time for the banking industry to “up the ante with regards to authentication, identity management, and overall fraud prevention.”

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  • Study Shows Widespread Ignorance on Credit Scores

American Banker

A large percentage of Americans know little about their scores, a new survey found. The survey shows widespread misunderstanding about how scores are calculated and how they can be improved. Between one-quarter and two-fifths of adults can’t answer basic questions about their scores, according to the survey released Monday by the Consumer Federation of America and VantageScore Solutions. Two-fifths of respondents did not know that credit card issuers and mortgage lenders use scores to make decisions about credit availability and pricing, the survey found.

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  • The Next Wave of Mobile Banking

Business 2 Community

In the U.S market today, retail banks offer a standardized mobile banking application. This provides the convenience and ease of banking for the “on the go” customer. In general, mobile banking is an expanding market and has changed the way customers manage their funds. However, it is arguable that the user experience of each of the retail banks applications is similar.

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  • Banking security and five essential layers

CIOL

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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  • 5 Things You Don’t Know Because You Weren’t at Finovate

Credit Union Times

FIS Wants To Be Your Mobile Main Man. The Jacksonville, Fla., tech behemoth may not have a rep for cutting edge tech, but Doug Brown, a vice president, was at Finovate with authentic tech hipster Chris Gardner – presently CEO of Paydiant, a mobile payments platform, and a serial tech entrepreneur whose cloud-based technology is powering some of FIS’ mobile offerings. The message: FIS has the mobile tech a credit union or bank needs. For instance: Brown demoed FIS’ Cardless Cash Access which lets a consumer withdraw real money from an ATM using only a smartphone (no debit card required).

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  • Banks should follow Apple, Starbucks in branch redesigns

Fierce Finance

It’s certainly true that banks are rationalizing the sheer number of branches they support, especially in regions where the costs outweigh the returns. But banks are also investing in the branch experience, which has led to lots of design and technology enhancements. By redesigning branches, banks are aiming to modernize the bank experience. This modernization has gone through many incarnations over the past decade.

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  • FBI Briefs Bank Executives On DDoS Attack Campaign

InformationWeek

FBI expedited security clearances so it could share classified info on Operation Ababil, a distributed denial of service attack that continues to disrupt U.S. financial websites. The FBI recently granted one-day clearances to security officers and executives at numerous banks so it could share classified intelligence on the Operation Ababil campaign that’s been disrupting U.S. financial websites for almost a year.

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  • 5 Hot Opportunities for Start-ups

Inc.com

Fresh numbers from Intuit shine a light on where consumers are spending the most–and where you might want to look for new business ideas. One way to find a hot business idea is to follow the money: Where are consumers spending the most? If that’s your approach, consider Intuit’s recently released findings from its Consumer Spending Index. It’s based on anonymized and aggregated data from more than 2 million Mint.com (an Intuit-owned budgeting tool) users who have agreed to share their demographic information such as age, gender, income, and location. The index measures spending habits from January 2009 to April 2013 and shows consumer spending is up nine percent from four years ago, and significantly so in certain sectors.

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  • The Next Generation of Cross-sell

Payments Journal

Too many financial institutions assume that cross-selling means offering products to every customer who walks through the door. According to Russell Lester, Director of Analytics at Intuit Financial Services, getting consumers to adopt lower cost services or channels can be a very profitable form of cross-sell. The cost of depositing a check using RDC on a mobile device is 10% of what it costs a bank to deposit a check in the branch. Using the previous example of an unprofitable DDA customer, it is easy to see how “cross-selling” them on RDC could result in a lower cost (and thus more profitable) relationship.

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FI Spotlight: USAlliance FCU Sees Cross-Selling Success

usalliancelogo

Banks and credit unions are always looking for new ways to cross sell solutions and encourage adoption of existing profitable services. For our most recent FI Spotlight, we spoke with Kris VanBeek, president & CEO of USAlliance Federal Credit Union. Kris shared insights on the implementation of Micronotes Cross Sell™ and encouraging further engagement with members.

 

KrisVanBeekCEOUSAllianceQ: In a few sentences, can you tell me about USAlliance Federal Credit Union?

USAlliance Federal Credit Union is one of the nation’s fastest growing credit unions. We were founded in 1966 as a credit union for IBM employees.  In less than fifty years, we’ve become a full-service financial institution with over $800 million in assets and over 60,000 members located throughout the globe.  We‘ve accomplished this through an extensive portfolio of progressive products and services all designed with one objective in mind – to help members achieve their personal financial goals.

We have big plans for the future. The key to achieving them is by adopting the most innovative and efficient technologies including online delivery and communication channels to support the needs of our growing member community.

 

Q: You recently implemented Micronotes Cross Sell™. Can you tell us a bit about the technology and the drive behind implementing a cross-sell technology?

Sure, but first let’s talk about the business drivers that led us to Micronotes Cross-Sell.

Financial institutions are keenly aware of the fact that the average consumer owns seven banking products yet only two are likely to be from the same institution. Realizing the enormous potential in cross-selling, the entire industry is focused on finding a way to anticipate when a customer is in the market for a new banking product and then making a compelling offer at the right time to convert the lead into a sale.

While cross-selling is a top priority, executing on the strategy presents a challenge because traditional marketing approaches such as direct mail, banner ads and in-statement offers lack the personalized, one-on-one experience that customers get when they come into a branch office. Also, those approaches tend to market to the masses as opposed to individuals, therefore resulting in a low ROI.

Given these factors, we started to explore a different approach to cross-selling and that’s when we discovered Micronotes Cross-Sell. The product was designed specifically for financial institutions to more effectively cross-sell through the online banking channel. It does this by combining big data with one-on-one interviews to recreate the in-branch experience.

For example, imagine you’re incurring a series of auto repairs and rental car expenses over a period of three months. When you go online to do your banking, you may be presented with a dialog box that asks, “Are you thinking about buying a car?” The conversation would then continue for about 18 seconds, ultimately leading to a personalized offer.

Micronotes Cross-Sell is able to do this by analyzing customers’ financial needs, asking relevant questions, listening to customers’ responses, providing advice, and making a relevant offer within seconds.

Q: What successes have you seen with the Micronotes Cross-Sell program?

We conducted a series of one-month digital marketing campaigns to a limited audience of our online customers. More specifically, we targeted 11,958 of our online banking customers and yielded the following results:

  • Interviewed 15 percent of our online banking population.
  • Converted 50 percent of interviewees into warm leads, generating 1,098 qualified leads.
  • Converted 8 percent of loan product leads to sales.

Based on these results, we’re continuing to develop campaigns using Micronotes Cross-Sell that will be made available to all of our online customers.

Q: Do you find other methods of member’s engagement such as social media beneficial to interacting with members/customers?

Yes. However, what’s important to note about member engagement through these channels is that immediacy and customer service must work together.

For example, if a customer has an inquiry, they should get a response from a live person immediately, and that answer should be delivered through the member’s preferred channel, for example, this may be during an online banking session or even through Twitter.

On the other side, it’s also our responsibility to proactively present our members with information that’s relevant to their financial needs. This may include operational updates, special announcements, and offers on new products that will ultimately save members time and money.

Q: What advice do you have for credit unions looking to more effectively cross-sell their solutions?

Given the continued rise in online banking, I would recommend bringing your technology and marketing teams together as you create a cross-selling strategy that taps into the growing needs of this audience. I would also recommend putting Micronotes Cross-Sell at the top of the consideration list because, honestly, it’s the most effective cross-selling tool we’ve ever used.

 

Want to hear more from USAlliance FCU? Follow them on Facebook.

Think your FI deserves special recognition? Submit your FI here.

 

Kris VanBeek is President & CEO of USAlliance Federal Credit Union. Prior to leading USAlliance, he was Senior Vice President of Information Systems and Risk Management at Digital Federal Credit Union in Massachusetts. His career encompasses a broad spectrum of experience in fields such as e-commerce, real estate, commodity markets and financial services. He is also an entrepreneur, having founded and led two companies. Kris is a frequent contributor to industry magazines on his areas of expertise and serves on several advisory boards.

 

Underwhelmed With Your Online Sales Results? Try Adjusting Your Focus

By Ron Shevlin, Senior Analyst at Aite Group

Many firms have built online application capabilities assuming that it will drive the acquisition of new customers and members; but when the results are less than stellar, some firms question the value of the Web as a sales channel. The problem might not be the channel, but, instead, how firms are selling and whom they are targeting.

As Aite Group talks to banks and credit unions about their online selling efforts, we see several commonly missed growth opportunities:

1. Cross-sell to your existing base. Your best cross-sell prospects can be found within your existing base. Many firms are challenged with a base that owns a single product, a low-balance checking account. Rather than bringing in more single product customers/members, focus on cross-selling deposit and credit products to your current website users.

2. Prioritize demand generation and conversion. Implementing online account opening capabilities ahead of building capabilities around demand generation and demand conversion can produce frustration. If you don’t fill the pipeline, there will be few potential accounts to open. The reverse is true, as well. Filling the pipeline with prospects, and providing landing pages and comparison tools that persuade them to buy a product can produce less-than-satisfactory results if effective online account opening capabilities are lacking.

3. Sense-and-respond to online sales opportunities. When we talk to firms about their online marketing and sales capabilities, their plans often include integrating the online channel with enterprise-wide CRM efforts and using the website to deliver messages that would otherwise have been sent through direct mail and email. While this is good, it misses the key opportunity that the online channel provides: To sense-and-respond to opportunities as they come up. Today, few banks and credit unions mine online bill pay or card (debit or credit) purchase activity to identify marketing opportunities.

What stymies your online sales efforts? Is it channel competition with the branches, lack of targeted online marketing capabilities, the inability to instantly fund and open accounts? To join the conversation visit In:Volve.