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.
Money, technology and accounting in real time—with all deference to spiritual learnings, that might just be the mantra for modern life. At the very least, it makes for a potent brew that says a lot about how we do just about everything we do.
The trinity is in the news in our industry because late in March, mobile payment and merchant services provider Square launched a new integration program with accounting software specialist Xero. Built around a new API (application programming interface), the deal enables transaction data from Square to be fed directly into financial records managed by Xero. That’s a big market and growing: Xero claims 200,000 paying customers in more than 100 countries, with a cloud platform approach that allows a wide range of business applications—from large companies like ADP and PayPal to new entries—to be integrated easily into the ledgers of Xero users.
Of course, in many ways, that’s exactly what Quickbooks does too. Which is why, when the most recent version of Quickbooks was released last fall, owner Intuit also announced a major partnership with Square. That deal, which formally launched a few weeks later, is specifically designed to help small businesses that use the mobile payment service to automatically feed data from those transactions into their books. By all accounts, the arrangement has proved quite successful.
As observers have been quick to point out, these companies are competing furiously with each other. For example, Xero has a Quickbooks conversion service to draw users from its desktop rival, and Intuit has launched Quickbooks Online as its own cloud-based alternative. Meanwhile, Square is increasingly branching into other accounting-related services.
While the market has been waiting for options such as Facebook Credits and Amazon Coins to gain traction, Square is putting its money—in a sense literally—where its reputation is with Square Cash. This is not really another form of currency, per se, but it does represent another form of financial flexibility in the digital era. With this personal payment app, users can ‘email money’ to other individuals with nothing more than a debit card.
For the record, plenty of other companies offer similar services. Larger entities like PayPal and Google allow person-to-person payments, and as in every other category, there are newer entries like Dwolla and Ribbon are also in the mix. And let’s not forget clearXchange, the consortium created by Bank of America, Wells Fargo and JP Morgan Chase. This is clearly a work in progress: Capital One just joined, but founding member Chase has yet to come online.
And that’s really the problem in a nutshell. This is a market that exhibits all the characteristics of the technology sector—it moves forward at warp speed, seemingly solid players get nudged aside by startups, fierce competitors find ways to cooperate with each other, fickle users constantly change in their behaviors and tastes, and products go from killer app to legacy in a heartbeat. Meanwhile, banking industry giants seem to be just lumbering along—a consortium with huge names that makes more of a ripple than a splash.
Why does so much of the really exciting stuff always come from the technology side? Why do innovations from the banking industry never seem innovative enough?
It’s not as if tech companies will be replacing banks anytime soon. The barrier to entry on that side of the fence is much lower, hence there’s more experimentation, and as a result more successes (and more failures). What they do enables us to do what we do—nothing more, nothing less.
But remember, much of the customer base is now made up of a generation that never goes inside a bank branch, has precious little brand loyalty and expects instant digital gratification in every sphere of life, work and play. Other industries such as retail and music have had their very existence undermined by these tectonic shifts, some of which they never saw coming. Our world keeps changing too. Are we changing enough, and fast enough?
Bitcoin has been hitting the headlines a lot of late and becoming an increasingly common form of transaction.
Of course, one of the most intriguing things about the currency is the significant accumulation of worth. In the last 12 months it has hit highs of 1,000% of its 2012 value. On the way there’s been a real rags to riches story, many of which seem almost akin to the gold rush or oil prospecting of the 20th century. We’ve heard all sorts of stories of people who purchased the crypto currency a few years ago end up with millions made from a few dollars.
Along the way we’ve seen a number of people that have accumulated large sums of money, use Bitcoin to invest in property. This has led to a number of interesting and intriguing – so let’s have a look at the Bitcoin property tales.
Norway has done well throughout the economic malaise the rest of the world found itself in the throes of. However, it didn’t stop a Norwegian man Kristoffer Koch put $22 into Bitcoin in 2009. Mr. Koch remembered he had the assets after hearing of the dramatic rise of the currency. Turns out he had over 5,000 Bitcoins and used part of the windfall to purchase an apartment worth a quarter of a million dollars. At current levels he still has millions left over – not a bad call on a $22 investment.
One of the biggest headlines we saw when the currency began making headlines back in March was that of Taylor More. More sold his him for $400,000 in Bitcoin – he received around 5,750 Bitcoins at a cost of around $60 a coin. It was a risk at the time but it’s paid off handsomely and the coins are worth a lot, lot more than the price of the home now. It was a very quick thinking, smart move but a gamble nonetheless. These new millionaires with appreciating assets are the sort of people who can help to buy your house.
China has really taken Bitcoin to its heart – well until recently that is. The Chinese government has stopped its banks from trading the crypto currency and is becoming increasingly stringent on its use. However, before things went a little downhill, the Chinese were investing in Bitcoin and also real estate.
In fact, one real estate development could be purchased in Bitcoins. The Shanda Group was offering Chinese people the chance to purchase apartments from its 300 unit block for one Bitcoin to 1,000CNY. This resulted in plenty of Chinese offloading Bitcoins and though the value of the Bitcoins went up afterwards they have fallen since and the developer will have lost out significantly. It’s a quite obvious showing of the gamble Bitcoin investment is.
However, it was a bit of a watermark moment as it was the first time the currency was used en-mass to purchase property.
Bitcoin is an interesting idea and one that’s set to cause plenty more news in the property market and also in the world of finance and investment. It’s been used for a number of interesting areas and though it may not be the future of money, it’s certainly intriguing nonetheless.
Cormac Reynolds has written for a number of sites and is a strong believer in Bitcoin and it as a means of transaction for property among other areas.
In all spheres of the banking industry, that one thing that is inherent in them all is the risk and coming challenges for banks – digital disruption. No matter on what topic of banking one discusses such as revamped branch banking or incorporating the voice of consumer and employee, in more ways than one he or she will actually refer to the digital disruption trend that is giving birth to many of those opportunities and challenges.
In all these years, it has already been witnessed, how digitally-driven industries can succumb to disruptions like television, newspapers and publishing. More, those same disruptions in some tangible ways have affected the financial industry as well – much earlier than anticipated. This has laid bare the fact that a lot of financial institutions are yet to prepare themselves for the scope and intensity of the impending disruptions.
As far as technology is concerned, organizations across the world have taken huge and applaudable steps. For instance, fast moving consumer goods (FMCG) companies have created Facebook pages, media houses have replaced their source of revenue from print to that of digital one. There is lot to learn for the banks and other financial institutions from these business practices.
Still, these accommodations to capture newer digital realities account for only a fraction of the shifting value. Its pretty difficult to coerce big business organizations to incorporate greater amount of digitization in the way they participate in their respective markets. This is all the more challenging since nobody can confirm from exactly where and when would the next disruption come.
However, not acting in the living present and lying inert would do more harm than good. This is due to the fact that digital disruptions don’t just devastate evolving technologies, but also how people use various technological devices and platforms. Actually, technological advancements have not only revolutionized the content that are shared, but they’ve also actively started to shape up the manner in which people interact with one another across the continents.
Every little bit of data – like search queries, telephonic conversations, mails, etc – that are exchanged get stored by the help of various technology tools. These tools are such that they can produce as well as utilize information to enhance the different platforms/devices of data exchange. However, the risk of operational setback remains. This would particularly happen because of the large-scale proliferation of data, channels and tools that are active participants in building relationships.
A lot of commenter have notified about the exponential rate of adoption in terms of mobile connectivity. Still, they fall back in talking about the possible implications of such uncontrolled growth of mobile connectivity usage. Even though a part of the global population has been able to take advantage of seamless connections at time and places of their choice, and that many of them think that they’ve experienced disruptions caused by the proliferation of technology, yet in reality they haven’t, not even a bit of it.
Hence, enterprises will have to battle out two-pronged pressure – one from the consumers and the other from the technologists that would direct them to transform themselves. Due to this fact, enterprises will have to understand how they would innovate newer services, control complexity of their systems and risks, connect with their consumer and so on. All these business requirements will depend on how well an enterprise understands the new relationship created by digital disruptions.
Yet, the giant leap will center around general acknowledgement which the banks must respond to. Major changes are about to come, driven by the consumers who feel elated and consider themselves as empowered through new technologies. So, what do these changes imply – a transformative opportunity or an inherent threat? The answer to this question would depend on how efficiently an enterprise can come to terms with digital disruptions.
Stuart Parker is an contributory writer .He is also a financial advisor and guest author for acclaimed blogs. Stuart has been writing for more than five years and helping people to get wise with their money. His interests include attending financial seminars, writing columns related to debt settlement, Debt relief, Debt help and visiting personal finance blogs.
For our most recent FI Spotlight, Banking.com had the opportunity to speak with Shannon Wilson, e-Marketing Channel Specialist at Travis Credit Union, a $2 billion credit union serving 12 counties in Northern California. Shannon shared some information with us about their 10 Grand For 1 Fan Facebook contest, which encourages Travis Credit Union Facebook Fans to interact with the financial institution. The goal of TCU’s 10 Grand For 1 Fan was inspired by Shannon to take TCU’s online presence to the top of the credit union industry. Of course, we wanted to hear more because, as Shannon said it best, “with 5,258 new Facebook fans in just more than two weeks – what’s not to ‘Like’?”
Q: You recently launched your Facebook contest 10 Grand For 1 Fan. Can you give us an overview the contest? What inspired this social media campaign?
Travis Credit Union is consistently ranked among the top 10% of credit unions in the social media space. I thought, “How can we attract a wave of new fans and engage the ones we already have?” Thus, we came up with the idea for followers to enter the 10 Grand For 1 Fan contest. I focused on three elements in this promotion: make it inviting, repeatedly engaging and, of course, measurable.
Q: What has your member response been to the 10 Grand For 1 Fan Giveaway? When will the winners be announced?
TCU members have really begun to interact with us more socially since the promotion was launched. We’ve received several positive comments, creative ideas and member testimonials. To create more enthusiasm during the contest, we’re giving away weekly prizes for the first eight weeks on Monday mornings. Additionally, if the TCU facebook page reaches 50,000 likes by March 31st, 2013, we will give one lucky fan $10,000.
Q: Has membership grown significantly during the campaign? Has it increased engagement on your Facebook page?
Travis Credit Union is seeing a positive growth in its membership due to the social engagement of the campaign. In addition, it has seen growth through all of its social media outlets, with the highest growth on Facebook: a 145% increase in followers and a 99.01% increase in engagement since the promotion began.
Q: Are you looking to drive engagement with your credit union within a certain demographic?
Travis Credit Union is looking to drive engagement with those between the ages of 18-55 years of age. We also want to build a reputation with those younger folks that will be our future members.
Q: Do you see the 10 Grand For 1 Fan Giveaway driving more in-branch users to digital solutions and vice versa?
The end goal of this promotion is ultimately engagement that will lead to the growth of our membership online and into the branches for more complex loan products.
Q: How are you planning to continue to expand your digital banking offerings for members?
Travis Credit Union is always looking ahead to expand our digital banking offerings to our members, including through mobile applications, online loan applications, and other financial services. The goal is to make our products and services as seamless and easy to use as possible for all our members.
Shannon Wilson has 10 years of experience in marketing and is currently driving the online marketing efforts at Travis Credit Union. Mrs. Wilson’s experiences includes: online and social media, search marketing, email and online CRM, online promotions and acquisition, user experience, online conversion, performance based campaigns and the list goes on.
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