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Bank Robbing 2.0

May 15, 2012 By David Sutton Leave a Comment

Financial institutions have plenty to worry about these days: robbers, hackers, fraudsters, scammers, viruses, malware, trojans —and the list goes on. One little talked about threat to FIs and their customers is ATM fraud in the form of skimming.

Skimming is the act of hijacking account information through the use of a card reader, usually installed on an ATM and fabricated to look like a part of the machine. Thieves have even utilized the readers used to unlock after-hours ATM kiosks. Often, a camera accompanies the card reader attached directly on ATMs and records customers entering their PIN.

Fraudsters can then withdraw money directly from the compromised account or sell the information to other criminals. Guns, drugs and other illicit materials can then be purchased with the stolen funds and card information, or criminals can perpetrate identity theft.

A recent post on the Krebs on Security blog, a banking and finance security blog, shows the latest in skimmer technology recovered from a compromised ATM. The unit is an all-in-one card reader with a built-in pinhole camera, seamlessly attached to an ATM — pretty sophisticated stuff.

One expert estimates more than $350,000 stolen from ATMs worldwide every day via skimming. With ATMs seemingly everywhere one could go – grocery stores, movie theaters, malls, gas stations – there is no shortage for opportunity. This reveals another part of the problem: unless you are a bank security expert, chances are remote that anyone from your FI has mentioned skimming or how to minimize the risk.

Here are some simple steps both FIs and their customers can use to lower the chance they will be victimized:

  1. Before inserting your card, always scrutinize the ATM for parts that look out of place, been added on or just plain don’t belong. Check for mismatched and uneven seams or other irregularities.
  2. Use your hand as a shield while you enter your PIN. This is perhaps the easiest preventative measure one can take. It will also prevent shoulder snoopers from spying on you.
  3. Educate yourself about skimming (and other forms of fraud). FIs can do a better job teaching their customers about skimming to help customers and members minimize the risk of being victimized. Hang a poster next to the ATMs or print warnings right on the machines, so it is fresh on the ATM user’s mind.
  4. Remind customers to check their account activity often, and report any unfamiliar transactions to the FI.

As FIs continue to utilize ATMs for both convenience and cost-savings, the frequency of skimming attacks will only increase in both volume and sophistication. Should these attacks be thwarted, FIs, customers and law enforcement must stay vigilant and ahead of the criminals and their ever-advancing technology.

Does your FI already have preventative measures in place against skimmers? Let us know in the comments section below or Tweet @bankingdotcom.

Editor’s Note: David Sutton has a BA in economics and a MS in business journalism, and his articles have appeared on Forbes.com and in the Boston Business Journal. David has had a bank account since he was three.

Filed Under For Financial Institutions Tagged With ATM, financial institutions, fraud, security

3 Reasons Customers May Break up With Your Bank and How to Avoid Them

February 2, 2012 By Karen Licker 1 Comment

*Guest post by Karen Licker, Social Banker & Content Contributor (Independent) at J.D. Power and Associates

Just like with couples, the relationship between retail banking customers and their financial institution is complex.   As with any relationship, a healthy connection between two parties is one that develops over time and is typically based on mutual respect, trust, honesty and support.

Most of us know that it takes effort for healthy relationships to work!  Whether we like it or not however, breakups do happen and in the case of bank customers, they get over them quickly and move on to another bank relationship.

The following are a few valuable insights about why retail bank customers may break up with you and how you can implement a few change initiatives to maintain a healthy connection with your customers….to avoid the bank break up.

Reason #1:  Callous Communication – Problems become a customer’s biggest problem

Problem prevention needs to be a high priority for all financial institutions, given the incidence of problems (22% of customers[1] indicate experiencing a problem) and the significant impact that problem incidence has on overall customer satisfaction.

Prevention Tips

  • Ensure customers understand fee structures, deal honestly with them and explain the fees right up front – it improves awareness of fees and minimizes complaints.
  • Engage new customers during account initiation to identify their needs and sell them the products that meet those needs …..it lowers the incidence of future problems if they are happy from the start.
  • Empower bank representatives (branch and call center) with the necessary authority, and provide proper training that will allow them to address any customer misunderstandings at the first point of contact.   It will eliminate confusion for future problems.

Reason #2 – Unmet Needs – You’re not giving them enough of what they want

To successfully manage customer expectations, it is critical to offer the product features and services that meet customers’ needs, such as direct deposit; electronic statements with check images; and overdraft protection. When customers are offered six or more features or services, satisfaction is 58 points higher than when customers are offered fewer than six features or services.

Prevention Tips

  • Show them some love, and offer customers the other innovative products and services that meet their needs at the time of account opening—more than the standard banking products (i.e., checking, savings).
  • Explain the benefits of the services associated with these products (i.e., overdraft protection), not just the features
  • Proactively contact customers.  They love personalized follow-up service, and it leads to greater product penetration and increased satisfaction.
  • Creatively communicate with your customers and use interactive channels —customers who cite communication via email, phone, or at the branch have a higher incidence of opening new accounts than those customers who are just contacted via mail.

Reason #3:  Feeling Underappreciated – In-branch or phone customer service is painful

It is key for financial institutions to focus on providing basic customer service elements in branch offices and on the phone.  From the moment a customer steps into the branch or calls on the phone, each point of the interaction shapes perception of the banking relationship as a whole.  The optimal in-branch or phone experience begins with a focused lobby management program designed around key elements of customer satisfaction is vital.

Prevention Tips

  • Show them you care and provide personal service during customer visits to the branch.  Some include activities such as: greeting, calling the customer by name; offering further assistance; and thanking them for their business after completion of the transaction.
  • Show them you care and provide personal service during call center calls.  Some include activities such as: greeting customers in a friendly manner; providing their own name to the customer; having the customer’s information available; handling any problems without transferring customers; and concluding with offering the customer further assistance and thanking them for their business.
  • Courtesy counts, so provide a level of service that shows patience, respect and empathy.   This not only increases satisfaction, loyalty, and retention but also has a significant impact on reducing future problems.
  • Ensure executive management and company-wide ownership of basic service elements and initiatives. Managers must regularly communicate to employees the bank’s priority on satisfaction.

[1] J.D. Power and Associates 2011 Retail Banking Satisfaction Study

Filed Under For Financial Institutions Tagged With bank relationships, customer satisfaction, financial institutions

Social Banking

January 25, 2012 By Banking.com Staff Leave a Comment

The infographic from ZoneAlarm which we highlighted recently warns users of security concerns related to online banking and has an interesting ranking on online activities. It lists shopping at number one, followed by banking at number two, and social networking at number six.

Actually, this kind of ranking is obsolete. In the real world these activities are distinct; in the digital world, they blend seamlessly, and the sooner professionals in every field adapt to that reality, the better.

Take shopping. Real-world retailers have long been losing market share to their online counterparts, but there’s now a host of social media tools to help them to fight back. A new generation of shoppers—the one that goes shopping with an iPhone and a million applications—can be lured away from what they’ve been doing online.

You like a dress you see in a store? Tried it on, want to buy it? Take a picture, press a button, and there’s an application that tells you instantly how many stores within a one-mile radius has the same dress at a lower price. Perfect fit, instant gratification. Or let’s say you bought a dress last week, and you happen to walking past that store again—an in-store app senses you’re close by and sends you a text: “Thanks again for buying that dress last week. And since you’re so close, if you come in within the next hour, you’ll get these shoes, which match your dress perfectly, for 40 percent off.” Talk about impulse shopping.

OK, so banking isn’t shopping. But just one generation ago, when the Internet itself emerged, remember what it did to stock trading. The economy was bubbling over back then, a ton of dot-coms was galvanizing the marketplace, and people had money to invest. So everyone from Merrill Lynch and Charles Schwab to newer players like eTrade and ScottTrade got in on the action with a raft of online trading tools. Bottom line: people got into the market because they could, they did research because they could, they traded relentlessly because they could.

Social media represents the second coming of the Internet. Retailers, educators, service providers of every stripe are scrambling to offer applications that play to their specific audiences. In many cases, this means getting customers not only to what they’ve done before, but take advantage of entirely new capabilities.

So, a year from now, what will financial institutions enable their customers to do that they can’t do now? And which companies will be first out of the gate with exciting new capabilities? Let’s speculate.

Filed Under Social Media Tagged With financial institutions, social banking, social media

Bank Transfer Days, And Beyond

January 20, 2012 By Banking.com Staff Leave a Comment

In a sense, the much-heralded “Bank Transfer Day,” designated as such for November 5, 2011, fit nicely into the overall narrative for the year just passed. We had monumental, activist-oriented, from-the-ground-up, socially networked movements around the world, from Arab Spring demonstrations toppling near-permanent fiefdoms in the Middle East to the multi-branched ‘Occupy’ rallies here at home. In that vein, moving accounts from large corporations to down-home non-profits seemed like an idea whose time has come.

As with those other movements, Bank Transfer Day was a consumer-driven initiative calling for systemic change—in this case, a voluntary switch from commercial banking conglomerates to non-profit credit unions. Prompted by one consumer’s decision to protest one bank’s customer service and debit card fees, the action was quickly propelled to a massive audience through spontaneous yet skillful use of social media. Even the date selected had a symbolic origin: November 5, commemorating Guy Fawkes, who was charged with attempting to blow up the British House of Lords in 1605. (That event has also permeated pop culture via films such as V for Vendetta and the eponymous masks worn by some Occupy protesters.)

It’s unlikely anything could live up to the hype, and in many ways Bank Transfer Day didn’t. Financial institutions across the board saw a flurry of activity for a short time, the larger banks still won’t tell how many accounts they lost, and a few credit unions are using the term in their marketing collateral. Otherwise, the movement seems to have faded from the public consciousness. Still, financial services professionals who dismiss the root causes do so at their own peril.

This is not your father’s banking industry. More than a singular protest, the factors roiling the market now are both more prosaic, and more revolutionary, than Guy Fawkes could ever be.

Consumers today have far more tools to conduct transactions with, far more options to choose from, and far greater expectations of each provider than even a few years ago. At the same time, new entrants to the market are building on innovative services to lure business away from big business. And of course, regulatory mandates, not to mention the pending potential of the Consumer Financial Protection Bureau, will add more pressure to the industry, and those institutions that don’t keep pace with are set to lose, even lose big.

Consumers now demand, and expect, high levels of transparency, flexibility, convenience and access. Banking used to be shaped by the act of walking into a branch or getting on the phone; today, it’s one of the most common online activities, and institutions are virtually required to develop personalized and otherwise customizable applications that meet a broad range of user needs.

Some have done this, but many others haven’t. There’s also a significant lag between user behavior and corporate accommodation, at least in some markets—while some larger institutions are still struggling to develop brand-specific mobile applications, many smaller providers have already embraced newer alternatives such as Remote Deposit Capture (RDC).

As the innovations keep coming, we’ll track them on this blog, warts and all. But the inescapable, irrevocable conclusion is that, far from the clamor of protests and rallies, consumers today have a quiet but powerful toolset to draw from, and they’re not shy about drawing from it to make a point, or even a transfer. That’s what change is all about.

Filed Under Financial Management Insights Tagged With Bank Transfer Day, financial institutions

10 Resolutions Bank Marketers Can’t Ignore in 2012

January 4, 2012 By Jim Marous 1 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.

2011 was year that many bankers, and especially bank marketers would love to forget. Not only was focus diverted by the need to respond to new regulations for the second consecutive year (this time it was the Durbin Amendment), but the image of our entire industry was challenged as foreclosures and bank failures continued to be in the news.

We didn’t do ourselves any favors in 2011 either, as some of the larger banks learned the power of social media when they decided to increase (and then rescind) debit card fees, or when the industry fought internally with Bank Transfer Day.

The biggest impact of all of this noise was that attention was diverted from what should have been accomplished in 2011. As I reviewed my post from last year, Ten Bank Marketer Resolutions for 2011, it is clear that most bank marketers lacked the time/focus to make much progress on any of last year’s goals. So, in writing this year’s Bank Marketer Resolution post, I could have simply posted the same resolutions from last year (similar to what I do with some of my personal resolutions). Instead, I reached out to bank industry leaders from across the globe for their ideas. There was surprising uniformity in their suggestions, and a sense of urgency around the need to achieve much more than last year.

So here are the resolutions bank marketers should not ignore in 2012 according to industry leaders:

1. Validate The Value of Marketing Through Measurement: As highlighted in my recent post 100 Years Later, Marketers Still Have Difficulty Measuring Up, there is still a tremendous gap between what bank marketers implement and what is measured. Not only are there almost 20% of marketers who don’t find measurement of results imperative according to recent research by Ifbyphone, but less that 50% of any channel is measured. Dan Marks from First Tennessee says, “Bank marketers should resolve to measure and optimize true marketing ROI – having the courage to seek out the unproductive part of the marketing mix and replace it with other activities that generate real shareholder returns.” Serge Milman, CEO of Optirate states, “In 2012, bank marketers should resolve to have a more diligent focus placed on business drivers that can help manage and grow the bank,” while Bradley Leimer, vice president of online/mobile strategy at Mechanics Bank said that,  ”The number one resolution for bank marketers in 2012 must be to ‘put data first,’ since the proof of any program resides in the measurement of results.”

Jeffry Pilcher from The Financial Brand added a common sense resolution that is not always followed . . . “stop doing things that don’t work.” It is clear that if only one resolution can be accomplished in 2012, the measurement of attribution and program results is the most important.
2. Don’t Confuse Channel Economy with Channel Effectiveness: One of my resolutions from last year that needs reinforcement is that bank marketers should leverage the measurement mentioned above to ensure that the right channel (and mix of channels) are used for the right customers. While social and digital media seems less expensive, it doesn’t work as well on its own as it does when mixed with traditional channels. In fact, recent research discussed on this blog has shown that for financial services, many of the traditional channels are more desired and effective than new media. In addition, many bank customers are not reached at all with phone, email or social media programs. As mentioned above, 2012 should be the year of improved measurement and improved attribution analysis, which will help to answer the questions around which channels should be used.

3. Be Customer-Centric: Ron Shevlin, senior analyst from Aite Group and author of the book and blog Snarketing 2.0 stated in a recent post, “banks need to be perceived as doing what’s right for their customers and not just their own bottom line.” One of the banks I work with stated it best when they said that customer centricity means:

    • Know who the customer is and what they want
    • Look out for the customer and help them make the right decisions
    • Reward the customer for their patronage with tangible and intangible benefits

Saying you’re customer-centric is not enough, though. “When claiming your bank is customer-centric, actions speak louder than words,” warned Elizabeth Lumley, special projects editor at Finextra. This was especially evident in 2011, when many large banks made fee changes that created an uproar in social media, resulting in reversals of those decisions. To this new phenomenon, Chris Skinner, author of the Financial Services Club Blog suggested, ”Bank marketers should resolve to make 2012 the year where good communication and real transparency ensures that we don’t get screwed by social media campaigns.”

4. Build a Social Media Strategy That Compliments Your Overall Marketing Plan: Instead of engaging in social media because other industries are doing so, it is time to treat social media like other channels, with defined goals, strategies and expected ROI outcomes. “While simply having a Facebook page or Twitter account may have been sufficient in the past, customers are expected to utilize these channels to connect with their bank even more in 2012,” says Karen Licker, financial consultant and social banker (independent) for J.D. Power and Associates. “Given the public nature of these contacts, bank marketers should have a resolution to be aware of these conversations and direct customer outreach, and be equipped to respond quickly to questions or issues raided via these channels.”

Nicole Sturgill, research director for delivery channels at TowerGroup, suggested that bank marketers should resolve to engaging the front line in social media since many don’t realize they are being talked about. Alex Bray, managing consultant at IBM recommended, “Bank marketers should create a clear vision for social media based on a genuine customer value proposition while killing vanity projects that don’t add value.” Added John Owens “In 2012, bankers will need to understand the role and importance of social media to better serve clients and receive feedback.”

5. Leverage Big Data for Better Conversations: There is a lot of discussion in the marketplace about the use of ‘big data’ to transform customer communication and the customer experience. There are very few places where more customer insight is available than in the financial services industry, where we not only have access to demographic and financial service ownership data, but also transactional insight that gives us a view into financial and purchase behaviors. But big data is nothing new, and should not be overwhelming in an environment where the ability to process data has also grown exponentially.

Unfortunately, as was found by Ron Shevlin from Aite Group earlier this year and in a soon to be published report, bank marketers are still not very comfortable with communicating online or through mobile channels using available insights. This may require new talents and new teams according to Brett King, founder of Movenbank, and author of the best-selling book and blog Bank 2.0. ”In 2012, bank marketers should have a resolution to build a team that can create compelling customer journeys in real-time,” states King. “Marketing is no longer about ‘pushing’ messages,” continues King. Fred Hagerman, CMO of Firstmark Credit Union adds, ”Bank marketers should have a resolution to combine web analytics and database knowledge to drive even more relevant communication.”

6. Build Customer Value From Day 1: While there has been a great deal of discussion around the cost of a checking account since the December 9 American Banker article on the subject, there is no disputing the fact that fees alone can’t make a relationship profitable. As a result, it is imperative that bank marketers look at customers as valuable assets to the bank that need to be nurtured and grown through increased engagement, relationship expansion and retention. As stated by Matthew Wilcox from Zions Bank, “2012 is a year when all bank marketers should resolve to have multichannel new customer onboarding programs as well as highly targeted relationship growth initiatives. To not have these programs in place would leave valuable money on the table and risk losing potentially valuable relationships.”

7. Build Bank Value Daily: The past few years have been difficult for our industry, with the faith and confidence in many leading financial organizations being shaken. In 2012, consumers will look for solid value in products and services with every purchase and decision they make. Those organizations that don’t reinforce the value they provide – every day – will be challenged. Dan Marks said that bank marketers should resolve to “refine, renew, and reinforce the bank’s key brand distinction across the entire enterprise – everyone should know and exhibit how the bank uniquely serves customers’ needs.” Steve Cocheo from the ABA Banking Journal suggested a rather straight forward resolution, “Bank marketers need to accentuate trust and value in the communications they develop and strategies they build.” Bank consultant, Lori Philo-Cook seconded this resolution when she recommended, ”Bank marketers should resolve to find new ways to communicate with customers in order to rebuild trust and strengthen relationships.”

8. Innovate: Plain and simple, 2012 is a year where bank marketers should try new things and support innovation done in other areas of the bank. Bryan Clagett, CMO and investor at software services provider Geezeo put it best with his recommended resolution, “Bank marketers should not be afraid to experiment and think outside the box in 2012.” For those organizations where budget, philosophy or other variables may make true innovation challenging, payments pro Scott Loftesness provides a suggestion, “Bank marketers should prepare to be a fast follower, especially in mobile for 2012, unless they have the budget to be an innovator.”

9. Focus on Personal and Professional Development: While the skills needed to do effective bank marketing remain pretty much the same (targeting, messaging, measuring, etc.), the channels available have definitely increased. Therefore, bank marketers can no longer rest on their laurels and hope to succeed in the new marketing environment. More than ever, there needs to be a dedication to becoming familiar with the changes in the marketplace from a product and channel perspective. As stated by bank consultant Jeff Marsico, “The goal for bank marketers is to earn a place at their bank’s strategic planning table and to be more than just an ad budget.” Being aware of the changes in the marketplace can help earn this respect.

For me, I find that following industry leaders on Twitter and subscribing to industry blogs (like mine) are a great way to keep up to speed. Throughout this post, I have provided links to some of the industry pundits who share valuable insights and research on Twitter. Following them will go a long way towards keeping you in the loop. Watching who they follow will further expand your depth and breadth of knowledge. Bob Williams from Harland Clarke put it well in his suggested resolution, ”Bank marketers should resolve to listen, discuss, think, read, and write. In short, they should be part of the conversation.” Community banker David Gerbino provided a more basic, yet important resolution that, “Bank marketers need to resolve that they will understand finance, financial reports, and know how to calculate product profitability.”

10. Don’t Be Afraid to Break From The Herd: The banking industry is notorious for having a ‘herd mentality’, following each other’s lead as opposed to thinking independently. In the past, the logic for doing this was usually based around risk aversion. Today, following other bank’s can be both risky and can inhibit value creative. Look at the events around the raising of debit card fees by Bank of America, where many large banks followed the strategy of Bank of America only to have to follow the bank again as they rescinded the fee. The same can be said for the jumping into the social media waters without a defined strategy. While almost all banks are doing something in social media, very few can define the value it is bringing to their bank or what the ROI on this investment is.

2012 should be the year of breakout opportunity for those bank marketers who want to embrace the challenges associated with change. It is definitely not ‘banking as usual’, but is the environment where market leadership is gained and disruption creates new business models and customer segments.

I doubt if any bank marketer will succeed at all of the above resolutions. There may even be better resolutions than the industry experts provided above. If you have one that we missed, let me know. If you think some of the resolutions above are not valid, let me know as well.

I look forward to your comments and to a very exciting 2012.

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

Filed Under Financial Management Insights Tagged With bank marketers, banking in 2012, financial institutions, Future of Banking

What Will 2012 Bring for the Banking Industry?

December 21, 2011 By Banking.com Staff 4 Comments

As we wrap up 2011 and head into the New Year, we asked some of our readers to share their thoughts on the banking industry in 2012. This past year has been filled with mobile and tablet innovation, but will that carry on in 2012? How will social media impact financial institutions in the next year? Here’s what the experts are saying:

  • “Of those banks that are currently using social media as a channel to communicate with their customers, much of the focus has been on appealing to Gen X and Gen Y customers,” says Karen Licker, Financial Consultant & Social Banker (Independent) for J.D. Power and Associates. “Clearly Gen X and Gen Y customers comprise the majority of those subscribing to and using social media, but the number of Pre-Boomers and Boomers who do so as well is growing at a considerable rate.  In addition, Based on J.D. Power’s 2011 Retail Satisfaction Survey, nearly one in five Gen X and Gen Y customers state that they are likely to utilize social media for banking-related topics in the future, and more than one in 10 Pre-Boomer and Boomer customers are likely to do the same.  Banks should be prepared to interact with and satisfy the growing Pre-Boomer and Boomer customers too!” *see Chart 1 below
  • “2012 will finally see the tipping point for mobile banking. Mobile moves beyond today’s limited functionality and starts to become the primary remote customer channel. Look for some interesting corporate bedfellows to emerge as the financial services ecosystem starts validating mobile payment business models and the importance of controlling new methods of money transfers and payments. We will see continued disruption in the space, as it relates to payments, security protocols, features like proximity rewards, integrated p2p and a2a with social tether, account opening, and more. Expect feature rich device agnostic applications that enhance usability and user experience across a range of mobile and tablet devices.” Bradley G. Leimer, Vice President, Online and Mobile Strategy at Mechanics Bank (@leimer)
  • “2012 will be the year of improved customer lifecycle management. With the fees and interest margins associated with accounts falling, there is a need to acquire a new customer more efficiently, onboard each new customer more effectively, achieve a higher level of relationship engagement and gain a greater share of wallet. Financial organizations will also need to focus more resources on retaining current clients since replacing these households has become so expensive.”  Jim Marous, Senior Director, Marketing Services, Harland Clarke (@JimMarous)
  • “In the credit card space, service alerts have steadily grown in importance over the last few years,” says Michael Beird, Director of Banking Services for J.D. Power and Associates. “Based on J.D. Power’s 2011 Credit Card Satisfaction Study, cardholder satisfaction increases by 98 index points (on a 1,000-point scale) when service alerts are offered and used. Email (80%) is the most common form of service alert, and is followed by phone calls (23%); text messages (15%); and secure online messages (8%). Interestingly, secure online messaging is the lowest-used service alert feature, but it results in the highest satisfaction (783). While issuers still have to do a better job of informing their customers about the availability of the service, it’s clear that customers are seeking ongoing and proactive communication from their banks. Informing customers of status issues and concerns in real time, via text, email or secure online, is an emerging service that will likely grow exponentially in the year ahead.” *see Chart 2 below

What do you think 2012 will bring for the banking and financial services industries? Leave us a comment below or Tweet @bankingdotcom.

*Chart 1

 

 

 

 

 

 

 

 

 

 

 

 

 

© 2011 J.D. Power and Associates Retail Banking Satisfaction Study, The McGraw-Hill Companies, Inc. All Rights Reserved.

*Chart 2

 

 

 

 

 

 

 

 

 

© 2011 J.D. Power and Associates Credit Card Satisfaction Study, The McGraw-Hill Companies, Inc. All Rights Reserved.

Filed Under Financial Management Insights Tagged With banking in 2012, financial institutions, Future of Banking, mobile banking, survey

Financial Institutions & Security in the Cloud

July 11, 2011 By Banking.com Staff Leave a Comment

Financial institutions are not strangers to cloud computing adoption. One of the earlier cloud uses in banks and financial institutions were for SaaS deployments, which allowed for more social media components to banking.

However, now FI’s face the issue of security due to the increased number of data leaks. As a result, cloud within IT strategies and architecture for FIs will increase the risk of a security breach among servers and networks unless there is an adoption of a multiyear cloud strategy to keep data protected – as was outlined by John Gubala of CapCo and Milo B. Sprague of Silicon Valley Bank in Wall Street and Technology.

A recent article in Bank Systems & Technology by Rodney Nelsestuen, a senior research director covering financial services and research for the TowerGroup, outlines  what he believes are the “3 Steps to Securing the Cloud’s Future,” which discuss the long term steps banks need to take to have a secure cloud architecture for a successful future in the cloud:

1) Network issues need to be resolved by having “an open and transparent industry dialogue about tomorrow’s physical network business model…and foster marketplace competition.” Marketplace competition and an open dialogue will aim to create a secure network that will reinforce all of the data that resides within the cloud.

2) Financial institutions must have a standardized cloud by working with groups such as the Cloud Security Alliance and the IEEE.

3) Mandated best practices in cloud risk management will reduce the risk of financial crime. As security breaches do become more prevalent and more money is being spent online than ever (Gartner predicts that cloud services revenue is forecasted to reach $148.8 billion in 2014– up from $68.3 in 2010), systematic structure will help to create a plan of action in case of any data leakage.

The plan of action aims to reduce the risk of cloud architecture, and financial institutions will reap the benefits of the cloud than has been experienced in the past.  By following the steps as defined by Nelsestuen, financial institution IT infrastructures can take steps to ensure security in the cloud and continue to find more uses of this relatively new technology.

Is your financial institution taking steps towards the cloud? Do you think regulation is the next logical choice for all banks to adopt the cloud for their IT architectures? Let us know in the comments section below, or Tweet @bankingdotcom.

Filed Under Financial Management Insights Tagged With banking services, cloud computing, financial institutions, security, social media

Have You Set Up Your Social Strategy Yet?

July 8, 2011 By Banking.com Staff 1 Comment

The Banking.com Staff regularly discusses with our readers the use of Web 2.0 tools such as social media to increase customer engagement and retention. Christophe Langlois of Visible Banking agrees that a concrete Twitter strategy is a great way to build on customer retention, relationship management and overall customer satisfaction with your financial institution.

Christophe speaks specifically about using Twitter and social media platforms in a recent video to ensure that banks and credit unions are properly servicing their customers and members through quick and reliable customer service.  In an age of virtual banking, any customer with a complaint makes a larger splash online due to the transparent and public nature of social media.

Social platforms are an important theater in which FI’s can turn an angry customer into a brand ambassador. Some prime examples of how FI’s are using social platforms to better serve their customers include: Bank of America, American Express, BNP Paribas Bank, Wells Fargo and Webank, amongst others. Since Twitter is transparent and public, FI’s can help sway public perception for the better by responding and reaching out to customers to solve their problems.

You can watch the full video at Visible Banking.

Have you designed a twitter or social media strategy for your financial institution? Is social media helping with customer engagement and retention? Tweet @bankingdotcom or let us know in the comments below.

Filed Under For Financial Institutions, Social Media Tagged With customers and members, financial institutions, social media, social media tools, twitter, Web 2.0

How Banks Can Better Appeal to an Evolving Audience

June 29, 2011 By Kate Blatherwick 2 Comments

By Kate Blatherwick

As the way we conduct our business and our personal lives becomes increasingly internet led, banking too must adapt and grow to appeal to an ever more internet-savvy audience. Online banking has already gone some way to revolutionising the way we manage our finances online – but this is just the beginning.

In order to better understand how banks might better appeal to an internet audience, it is important to first understand the current experience users are having and what they’d like to see change in the future.

With this in mind, research conducted by Zabisco was undertaken via social media and an online survey to gather opinions from which banking preferences can be drawn:

Of 30 participants questioned, 57.4% currently use online banking and 90% stated this was the banking method they prefer to use, showing a huge propensity to bank online over any other method. Interestingly, despite being more widely used by recipients than mobile or telephone banking, it was in-branch banking that came out as the least popular option…

When asked about their attitude toward mobile banking, almost 40% were unsure as to whether or not their bank offered a mobile banking app whilst only 23% expressed any concerns over their inherent security.

Clearly, a sample of 30 participants is not enough to base widespread predictions upon, but it does give us some interesting insights into how users feel about the way they bank – most notably, it seems the biggest hurdle to the adoption of mobile banking is awareness, rather than the UK market not being ready to adopt such technology as some articles claim.

How Banks Can Better Appeal to an Evolving Audience

In order to better service their customers, banks have got to seek new ways in which to appeal to their customer’s needs and improve their service offerings accordingly.

That means understanding the end user and sculpting services around their needs, not just the needs of the organisation or its internal members. The research stated here is the very first step to understanding how banking customers today behave, but it is by far the complete story. It is only by investing in that user understanding that banks can create a user experience that works as well for the customer as it does for them – and that’s no mean feat.

Bio/Information

Kate Blatherwick works in the client services team at Zabisco, a  digital agency who produce engaging designs and content for websites  and mobile. Working in both London and Nottingham offices, Kate is project lead on a variety of clients including Barclays, RBS and Natwest.

Zabisco works with a range of financial services clients and, in the companies experience, the ongoing success of these banks is dependent on them taking a more user centered approach. To find out more about user experience and how banks can improve their, visit the Zabisco website at www.zabisco.com.

Filed Under Financial Management Insights Tagged With banking services, banks, financial institutions, mobile banking, online banking

Social Media and Banking Regulation

June 28, 2011 By Banking.com Staff Leave a Comment

Financial institutions who implement social media programs are now facing the challenge of new rules and regulations of such interactions. Unlike other industries that can interact with consumers on a product level, financial intuitions have to tread lightly on social media platforms to ensure their messages are being pushed out in accordance with industry regulations.

American Banker reported that in January of 2011, the Financial Industry Regulatory Authority  issued, “specific guidance to broker-dealers and securities firms about tracking and archiving social media correspondence, as well as many other issues pertaining to social media interactions.”

When social media drives the communication between corporations and the public, financial institutions must comply with the regulations that apply to their industry. Mark Schwanhausser, a senior analyst for Javelin Strategy and Research said that, “Social media is rewriting the rules and [increasing the] speed with which banks have to respond.”

Some large banks, such as Citigroup Inc., have chosen to work with various companies, including CoTweet, Socialware Inc. and Hearsay Social to support their social media strategy, while other banks are reluctant to share information on which technologies they use to run their social programs.

Jesse Engle, vice president of social media for ExactTarget weighed in with his thoughts on implications of social media stating, “[Banks] no longer have a choice [of whether] they will participate in social media…the volume of people who want to engage with companies via social media is increasing, and their level of expectation is also increasing.”

Is your financial institution using social media to engage customers? How do you ensure social media programs are in compliance with changing regulations? Let us know in the comments section below, or Tweet @bankingdotcom.

Filed Under For Financial Institutions, Social Media Tagged With financial institutions, social media, twitter
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