This Week’s Reads…

What We’re Reading: Finovate, Mobile Payments, Underbanked

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.

 

  •  Use of Overdrafts Hits 14-Year Low: Report 

American Banker 

U.S. consumers are overdrawing their checking accounts less frequently than at any time in the last 14 years, according to new survey data. So far this year, the average consumer at a bank or credit union is overdrawing their checking account about seven times annually. That’s down from a peak of nearly 10 overdrafts per year in 2008 and 2009, the economic research firm Moebs Services found. Banks and credit unions have responded to the decline by raising their overdraft fees, says Michael Moebs, the firm’s chief executive officer. The average overdraft fee hit $30 in the second quarter of this year, up from $29 in the previous three months.

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  • 5 Ways Mobile Banking Is Evolving: Finovate

Bank Systems & Technology 

Several new technologies demoed at Finovate this week showcased new ways that mobile is solving pain points for banks and their customers. Mitek won the first place prize at Finovate this year for its mobile photo account opening solution that it unveiled at the show. Mitek wasn’t the only company making use of the smartphone camera in a new solution at the event. Capital Access Network, a small business finance specialist, showcased their Mobile Funder, a tablet-based tool for financial sales/ISO representatives selling small business loans.

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  • McDonald’s Testing Mobile Payment App as U.S. Sales Stumble

BusinessWeek

McDonald’s Corp. is currently testing a mobile payment application in Salt Lake City and in Austin, Texas, Lisa McComb, a spokeswoman, said today in an e-mail. McDonald’s, which today reported U.S. same-store sales that trailed estimates for August, is looking for ways to make it easier for diners to load up on Big Macs, McWraps and smoothies. It’s not alone in seeking to ignite growth at a time when many Americans are eating out less. Burger King Worldwide Inc. offers a delivery service with a $10 minimum order in some U.S. cities, while Chipotle Mexican Grill Inc. has a mobile ordering app.

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  • Digital Case Studies – What’s Next: The Search for Disruptive Innovation

Celent Banking Blog

Over the past five years digital technology has evolved significantly. Many financial services firms have moved past the exploration stage and are now more committed to the mobile channel. There is increased demand for expanded capabilities and functions and users expect “always on” access through an app on their smart devices.  Celent has seen a rise in the focus on mobility solutions across the enterprise and this trend is expected to be a sustained area of investment for the short to medium term. In short, there is a broad consensus that digital channels and mobile platforms represent a critical path forward.

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  • A Mobile Wallet for the Underbanked

Fast Company

Banks and private startups are all pushing digital wallets–smartphone software packages that allow users to connect their bank accounts or credit cards to their phone, and then make payments through NFC, mobile money transfers, or other technology. Wipit, which offers mobile banking services through Boost Mobile, just received a new round of Series A funding from VCs Core Innovation, who join current investors H&R Block and Euronet Worldwide. The amount of funding was not disclosed, but Core managing partner Arjan Schutte will join Wipit’s board.

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  • Study: Smartphones, tablets drive close to half of all online banking

 Fierce Mobile Content

Forty-three percent of all online banking activity in the U.S. now occurs on smartphones and tablets, according to the annual xAd/Telmetrics Mobile Path to Purchase Study. Millennials are driving the trend: Forty-three percent of mobile banking users are under the age of 35, and one-third indicated that smartphones are the most critical device for their personal banking needs, the study reveals. In addition, 62 percent of younger bankers have completed a purchase on a mobile device and lean heavily on those devices in all phases from initial research through conversion.

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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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