What Causes Profitability?

August 12, 2014
/   Spotlight

Digital Insight proves that digital bankers actually drive increase engagement and profitability with their financial institution.

Cause and Effect: If you build it, will they come?

July 23, 2014
/   Spotlight

Many financial institutions assume that digital banking is lucrative because the most valuable customers happen to bank online. While there is certainly a correlation between online bankers and higher profitability, quantitative evidence suggests that...

Cause and Effect: If you build it, will they come?

/   Spotlight

Many financial institutions assume that digital banking is lucrative because the most valuable customers happen to bank online. While there is certainly a correlation between online bankers and higher profitability, quantitative evidence suggests that...

Intuit 2020 Report: The Future of Financial Services

April 11, 2011
/   Insights

Today, Intuit released the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry...

Platform Shift in the Making

February 13, 2013
/   Insights

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...

Infographic: How to Spot a Fake Check

March 8, 2013
/   Insights

The team over at TROY pulled together an infographic on how to spot a fraudulent check. With more consumers using remote deposit capture to upload and deposit checks through their smartphones, it’s important to...

Fast Facts: Student Loans

January 22, 2013
/   Insights

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast...

The Top 10 Trends in the Digital Banking Industry

December 18, 2013
/   Spotlight

2014 is rapidly approaching and as the year wraps, the Digital Insight team has pulled together the top 10 trends in the digital banking industry based on data and trends from studying financial institutions....

Financial Literacy Month: How are you celebrating?

March 22, 2013
/   Insights

With April approaching, it’s almost time to kick off Financial Literacy Month! Strongly supported by the United States Congress and the Financial Literacy and Education Commission, Financial Literacy Month aims to promote the importance...

Question MarksThere’s no question that in our business we’ve seen more than a few ‘disruptive’ technologies. You could even argue that the entire industry has become conditioned to the notion of disruption—every day, it seems, there’s a new startup, a new device, a new paradigm, and of course a flood of new apps, all designed to make life easier for professionals and consumers alike. All of these inventions have done their part to move the industry forward.

But what if the changes don’t go far enough?

What if many of the innovations don’t reinvent the industry as much as they refine existing capabilities? What if the new technologies we marvel at are time-savers (which is surely a good thing) more than game-changers?  What if basic functionality has gotten much easier but is still too hard?

There have surely been ground-breaking advances along the way. A number of online-only banks have sprung up to offer services that are both more varied and less costly than some of their traditional counterparts, ramping up competition in the process. A full roster of mobile applications from startups and multinationals alike has changed consumers’ core perceptions of day-to-day money management. Mint.com helped shift the landscape with technology that identifies and organizes transactions made in virtually any account, boosted by search algorithm that finds personalized savings opportunities.

Simple logo

BBVA recently announced a deal to acquire startup Simple. Image source: Gizmodo.com

The innovation isn’t letting up anytime soon, and the money is there to support it. Just last week, BBVA, a Spain-based multinational whose U.S. subsidiary Compass operates close to 700 branches, announced a deal to acquire Simple, a fledgling venture that has taken numerous apps to market. By itself, the deal is not exactly gigantic—the $117 million price tag is puny compared to, say, the $19 billion that Facebook is willing to shell out for What’sApp.  (Now there’s a deal that’s got many marketers scratching their heads.)  But the Simple acquisition is interesting for a number of reasons.

First, Simple is not a bank in any sense, in fact, it doesn’t even hold customer accounts. (That function is currently managed by Bancorp, though BBVA will eventually take it over.) More interestingly, perhaps, Simple is essentially built on the notion that traditional banks do things wrong. Its founders have been loudly critical of existing practices, which is why they don’t charge fees but instead create services around data-driven behavioral patterns.

The key belief here is that while banks are content to show consumers what they have left in their checking accounts, those same consumers must also do mental gymnastics to incorporate factors such as rent and groceries before deciding what they can actually spend. Simple’s services helps with that thinking, and will in turn propel changes in end-user behavior. Moving forward, these are the kinds of innovations that the market will demand.

Some industry professionals are making the case to go even further. Aman Narain, global head of digital banking at Standard Chartered, stresses that insight into current finances does not by itself enable action. So what actually might help?

Imagine a personal finance application that estimates a user is spending too much on cabs when it rains, automatically checks the weather, and makes a recommendation via the mobile device to carry an umbrella or raincoat. There are endless possibilities: It could match financial information with health concerns to guide decisions at a grocery store or a restaurant.

Yes, the Big Brother aspect to all this is obvious. It’s a little intimidating to think that the smartphone, in its own way the most personalized computer ever, could be so personal as to make the best decisions about what we spend money on, entirely based on our own best interests. Yet that’s exactly how the best technology works—it doesn’t make decisions for us, but it changes the way we make decisions. And those products have a much, much bigger and better memory than we do.

In our business, the core product is money—it’s personal, visceral and vital, and it helps enable the acquisition of every other product. That makes comparisons to advances in other industries seem like a stretch. Our industry has good reason to be proud of the innovations we’ve taken to market. We’ve come a long way. But we can, and must, go much further.

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Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.

Brad Strothkamp

http://www.forrester.com/rb/analyst/brad_strothkamp

James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.