Reality Check

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.

In case you missed it, Google released a video last week showing off their new augmented reality glasses. Pretty neat stuff. And now according to American Banker, the glasses can be utilized for financial services.

So far PNC Bank is the only financial institution to offer a use for the augmented reality device — a bank and ATM finder. Pretty handy really, but I am having a hard time seeing how this is much of an improvement over a map on a smartphone or tablet. Do we really need to walk around with a cyborg-like eyepiece and display?

Google should be concentrating on getting Google Wallet off the ground. Launching 10 more Sprint phones supporting Google Wallet at Mobile World Congress was a good start. Previously only the Nexus S 4G offered the required NFC infrastructure. When coupled with the need for retailers to commit to the system as well, the outlook was pretty hazy.

Google did just acquire TxVia, the mobile payments tech company, in theory to shore up the much-criticized security issues hampering the wallet. It’s safe to say Google is not yet ready to abandon the mobile payments ship despite earlier rumors that Google is shelving the project amid all the competition.

And, let’s face it, mobile payments are very popular lately with everyone and their mother trying to get in on the action. PayPal, the incumbent in the online payment space, recently released a card reader aimed at merchants. Called PayPal Here, it was a direct shot across the bow of mobile payments leader Square, and their dongle.

Perhaps some futuristic glasses are just what Google needs to propel them to success in mobile payments. They are creating at least a little buzz in an otherwise dry and jargon-filled market. The glasses actually make a lot of sense in an urban setting, where the real-time information would be most helpful. And let’s be honest, anything would be an improvement over people walking around staring down into their smartphone.

To summarize: we now have a battle royale brewing that includes software, cellphone, banking, and other technology companies; executives bouncing around between competitors; and new players entering the fracas (Tappmo, founded by ex-Google Wallet engineers, to name one).

By the time this is posted the landscape will most likely have shifted again. Don’t forget about Facebook either. They’ve been mentioned on this blog before as another army in the payment war.

It will be interesting to see what partnerships are formed to try to gain an upper-hand in this scrum.

No one knows how long the mobile payments war will drag out and who will be left standing. Or, if they will use augmented reality glasses, a dongle, a camera or some other newfangled, yet to be invented, device to dominate the mobile payments market.

As it stands right now, I’ll take augmented reality glasses over another dongle any day.

Social Media Statistics: By-the-Numbers, January 2012

Below are interesting statistics on social media usage. Feel free to share your favorite social media statistics in the comments section or Tweet @bankingdotcom.

  • 52.1% of all sharing on the web is driven by Facebook, with Twitter generating just 13.5 percent of all shares. (Source: Clearsping)
  • 256% increase in mobile data usage by teens in the US age 13-17 over the past year. The average teen used 320MB of data per month on their phone. (Source: Nielsen)
  • 3% of adults say they get news and information about local restaurants, bars and clubs from social media, while 38 percent claim to use Internet search engines. (Source: Pew Internet)
  • 49,000,000 the number of US visitors to the Google+ platform in December 2011, a 55 percent increase from November. (Source Hitwise)
  • 82% of the world’s online population are reached by social networking sites, representing 1.2 billion users around the world. (Source: comScore)
  • 79% of European online adults engage with social media, 86 percent of US adults do the same. (Source: Forrester)
  • 19.7% of the total Facebook user base is located in the United States. (Source: AllFacebook)

Curious what social networks your financial institution should focus on in 2012? Check out this infographic.

 

 

 

 

 

 

 

 

 

* Graphic provided by:

Image: tungphoto / FreeDigitalPhotos.net

The Next Frontier: Mobile Money

By Eric Dunn, Senior Vice President, Payments Initiatives, Intuit

The adoption of smartphone-based mobile banking is one of the fastest trends in digital banking. While today’s smartphone applications, for the most part, mirror the functionality of bank websites with balances, transfers and bill pay, a new frontier is opening with the proliferation of mobile wallets and payment solutions. Already, hundreds of thousands of retail point-of-sale terminals support near field communications (NFC) protocols such as PayPass (MasterCard) and PayWave (Visa). Industry forecasts for smartphones suggest that at least 50 percent of new smartphones will be NFC-capable within 18 months.

As the new frontier of smartphone-based mobile payments is unfolding, there is uncertainty for financial institutions.  How will banks and credit unions participate?  Some industry players — PayPal, Google, the wireless carriers and others – are designing mobile payments ecosytems in a way that could reduce the role of banks.

As a business partner to many financial institutions, Intuit wants to share some of our newest thinking about the mobile payments landscape, and in particular how banks and credit unions can preserve or expand their role in payments during the evolution to digital and mobile. Specifically, Intuit has been working closely with terminal manufacturers and others in the mobile payments ecosystem to develop a working prototype of an NFC-based payment solution that is complementary to smartphone-based mobile banking.

What’s on your mind about mobile payments?  Is this a payment option your financial institution is interested in offering? To join the conversation visit In:Volve.

Google Buys Motorola Mobility…And So Begins The Dark Ages

By Gene Marks, originally posted on Forbes.com.

Editor’s Note: Gene Marks is a small business management columnist, author, and speaker who also owns and operates The Marks Group PC, a highly successful 10-person firm that provides technology and consulting services to small and medium sized businesses. The Marks Group PC, launched in 2004, has grown to help more than 500 companies and more than 2,000 individuals throughout the country. Gene writes weekly online columns for The New York Times and Forbes, as well as monthly and bi-weekly columns for Bloomberg Business Week and American City Business Journals. Intuit has, on several occasions, contracted Gene to provide marketing-related services.

Last week I finally, finally purchased a Motorola D3 smartphone. I’m loving it! And I’m loving Google!  So you’d think that I’d be loving the news that Google is purchasing Motorola’s cell phone business, right?

I’m not. This is like the beginning of the end of the Roman Empire. And the beginning of technology’s dark ages. At least for many small businesses like mine.

Lots of reasons are given for the acquisition. Most experts believe that it’s motivated by certain patents that Motorola owns which will help Google defend itself against infringement lawsuits brought on by Apple.

ZDNet’s Jason Hiner agrees, but also offers this reason: “…it’s pretty clear that Google also wants to have the option of producing its own hardware devices so that it can build prototypes, concept hardware, and leading edge devices to demonstrate its vision and point its ecosystem partners in the right direction.  With Apple’s continued success in mobile, BlackBerry’s large (albeit fading) market share, HP’s new hardware/software unification with WebOS, and now the Google-Motorola deal, it’s becoming clear that vertical integration is winning in mobile. Going forward, look for the latest, greatest, high-end devices to all be vertically integrated, while many of the low-cost, copy-cat devices will come to the market later and be made by mass market manufacturers like Samsung.”

This is all great for Google. But will this news help my small business? Unfortunately, no. The empire is breaking up. Chaos is approaching. Life, particularly for my business, is about to become more complicated.

Chart 1 (here)

Chart 2 (here)

No one can argue with the above two charts. PC shipments over the past few years have been consistently below the peak levels from the 1990’s. And other devices, like tablets and mobile phones, have taken off. This is the main reason why HP decided last week to get out of the PC business and focus instead on software to power all these gadgets. Workstations and servers are on their way to becoming generic boxes, waiting for the customer to install their operating system and applications of choice.

None of this is good news for small business. Like the people of ancient Rome we complain about our conditions and our leaders. We say we want better choices. But really we just want things that make life easier. And things that work. Inexpensively. Which is the way it used to be.

Because once upon a time there was just one evil empire and it was named Microsoft. Every computer shipped was shipped with Windows. And people complained about them all the time. The company faced anti-monopoly lawsuits from both individuals and governments. We frequently grumbled about Windows: its bugs, the blue screens of death, the bloatedness of it all. Its software was targeted by endless armies of hackers. Of course, these being more civilized times, no on attempted to assassinate its CEO. But pies were thrown. Competing operating systems, like Linux, were more like harassing barbaric tribes.

These were the days of Pax Microsoft. And during those days, technology flourished. Software developers developed software. Lots of it. And primarily for businesses. And business owners like me were more productive. Microsoft’s biggest selling product became Office. And other software vendors created applications for accounting, order entry, inventory management, communications and customer relationship management.

Of course, the Caesars weren’t perfect. And neither was Microsoft. Why? Their Windows software was flawed, annoying, frustrating and an oftentimes faulty platform for which to write software. But, like the bureaucracy of Rome, the system worked. It was stable (for the most part). It was consistent. And, like the Roman Denarius, it was accepted in just about every business in the country.  Microsoft partnered with hardware companies but never owned them. They just wrote software for them. And we could buy software knowing that it was Windows compatible.

But now that’s all changing. Microsoft has slipped, and the Pax Microsoft era is coming apart. The Gauls and the Goths are invading. The world has gone mobile. And the empire is losing the mobile market to Apple and Google.

So now we no longer just have Microsoft Windows. We have Apple’s iOS and Google’s Android operating systems. More choice is good, yes? No. There is no one company writing software that’s runs all of our computers and devices. We now have three companies who have created three different and separate operating systems.

And now we have Google buying Motorola, so that (like Apple) the software and the hardware become as one. Before we know it, if we want an Android we’ll be “encouraged” to purchase a phone or other device manufactured by Google, just like we are now forced to buy iPads and iPhones for Apple software.  How much time until Microsoft admits it can no longer be just a software company and purchases a big PC manufacturer like Dell so that their software can become as one with hardware too?

And then what?  The empire breaks up. The technology world divides itself into three camps. And small business owners, many who do not have the resources to support all these different platforms, will need to make some choices. And live with them. So what will it be: Latin, French or German?

Software vendors will have to develop their products not for just one platform but for three. Most can’t afford to do this. These are not little “apps” for a smartphone. These are business programs which I need to manage my operations. Which means that if I choose, for whatever reason, to standardize my business on Google/Motorola/Android, then I will only be able to choose those applications written for that platform. I would need to replace the software that I already have for software that may be inferior, or lack features that I need to run my company.

And I’ll be limited as to what hardware I can purchase. For now, I can purchase PCs from a variety of different sources because I know they all run Windows and my business applications will be compatible. But in the future will I be forced to only purchase hardware manufactured by Apple because I run Apple applications? And will this hardware have all the features that I need? Will I have a broad choice of local support? Will it be compatible with other devices, like bar-code readers and document scanners that my business may require? Or will I be stuck? Stuck because I was forced to pledge my allegiance to one and only one King.

And what if I want to leave the camp?  The Emperors of Rome didn’t much like those that switched sides. And neither will Apple, Google or Microsoft. Suppose, after a few years, I don’t like the software I’m using to manage my orders process. In today’s world, migration from one software application isn’t easy, but it’s do-able. Most major business software applications are Windows-based and run on similar databases like SQL. So data can be mapped and moved. Will this be the case if I want to move from an Android based order entry system to an Apple or Microsoft based system? Or will, by that time, vendors be so territorial that they will encircle their kingdoms with walls and moats, making data too proprietary to move somewhere else?

And then there’s integration. Because instead of solving the biggest problem that business owners have had since the dawn of technology, the end of Pax Microsoft makes it worse. Even in the world of Windows, most of us have suffered trying to make our accounting systems talk to our service systems and our service and accounting systems talk to our websites. And that’s not to mention our never realized dream of being able to quickly and inexpensively communicate financial information with our customers and vendors too.  Most of us endure with entering the same data two or three times into disparate systems and hoping for the best. But at least these were all Windows-based systems. And as technology matured there was some hope that software developers would create applications that can one day make this integration a reality.

But these same developers are now distracted. They’re writing new apps for the Droid or iPhone. And the dream of having seamlessly integrated systems now seems unlikelier as Apple and Google rise to challenge Microsoft and break up the hardware and software infrastructure into competing camps. Maybe one day my Android-based applications and hardware will all integrate effortlessly. But it feels like we’re starting from scratch.  And even if that does happen, what if I still want to keep that great Windows app for managing salesmen commissions but also want it to share data with my Windows based accounting system?

Some may say that these issues will all be resolved by The Cloud.  But if that’s the case then why does every cloud based provider today have separate applications for mobile devices? Won’t they be forced to ultimately choose sides as well? And what about all those companies who prefer not to have their data delivered through a cloud based application because it doesn’t suit their business model? More choices. More complications.

I’m not saying that life during the Roman Empire was all bliss. And I’m not saying the Microsoft Windows era has been a perfect one for small and medium sized companies. Apple and Google make great products. Did I mention that I love my new D3?  But I know my history. And when the Roman empire became fragmented the world entered a period of chaos and suffering. I’m concerned my company faces the same technology future.

 

Social Media Statistics: By-the-Numbers, August 2011

Below are interesting statistics on social media usage. Feel free to share your favorite social media statistics in the comments section.

  • 89% of US companies use social media for recruiting (Source: Jobvite)
  • 71% of online Americans use video sharing sites, a 5 percent increase over 2010 (Source: Pew Internet)
  • 69% of travel companies have seen traffic growth from Facebook; 46 percent have seen the same from Twitter (Source: Tripl)
  • 34% of US cell phone owners have shot video with their phone, while 26 percent have watched video on their phone (Source: Pew Internet)
  • 27% of time spent on Facebook is spent on either the Homepage or Newsfeed, with just 10 percent spent on apps (Source: comScore)
  • 20,000,000 visitors world wide for Google’s fledgling social product, Google + (Source: comScore)
  • 500,000 merchants have signed up for location-based social network Foursquare (Source: Foursquare)
  • 80% of advertisers renew their campaigns with Twitter (Source: eMarketer)

Working on building your Twitter following? Here are 10 tips from All Twitter.

The World’s Most Innovative Companies: Where Are the Financial Institutions?

Forbes recently released its list of the World’s Most Innovative Companies, aiming to answer the question, “Which leading-edge corporations are most likely to succeed now and in the future?”

The list, which is based on an eight-year study, used a unique methodology to calculate the companies that made the final cut. Rather than ask executives to vote on which companies should appear, factors such as financial performance, investors’ bids on stock prices and expectations of future results (new products, services, markets) determined the companies on the list.

Tech giants such as Apple, Amazon, Google, Oracle, Intuit and Salesforce were on the list, as well as consumer facing companies Starbucks, PepsiCo and Hershey.  One sector without a large presence on this list: financial institutions. You can view the complete list here.

As the Banking.com staff read through the list, we wondered, why aren’t there more financial institutions on this list? What are your thoughts? Leave us a message in the comments section below.

Are Office Depot, Google and Wal-Mart Disrupting Small Business Lending?

In recent weeks Office Depot and Google announced credit programs aimed at small businesses. Office Depot is partnering with Superior Financial Group, a non-bank SBA lending company, to offer small business loans up to $25,000.

Google is offering small businesses a credit card that can only be used to pay for AdWords, Google’s keyword advertising program. Google’s credit card offers a very competitive interest rate and no annual fees.

These companies join another corporate giant – Wal-Mart – in providing credit services to small businesses. Wal-Mart, also in partnership with Superior Financial Group, started offering small business loans last year.

These firms illustrate a broader trend of nontraditional competitors targeting the financial services industry. These new competitors include some the world’s largest corporations and best-funded, venture-backed startups. They are hoping to use disruptive innovation based on both new technology and the shift to online banking to attract customers and gain share in the financial services industry.

Disruptive innovation is a term coined by Harvard Business School professor Clayton Christensen. It describes a process by which a product or service creates a new market or reshapes an existing market by delivering simple, low-cost innovations to a set of customers who are ignored or underserved by industry leaders.

Industry leaders ignore these customers because they aren’t viewed as important enough, or profitable enough, to pursue. After a disruptive competitor establishes themselves with this group, these firms often move up-market, eventually challenging traditional competitors for their best and most profitable customers.

The classic example of disruptive innovation is Southwest Airlines. Southwest initially targeted price sensitive vacation travelers, a segment considered unattractive by the airline industry. Ignored by larger rivals, Southwest moved up-market and over time firmly established itself with business travelers, the airline industry’s most coveted customers.

We think something similar may be happening in the small business credit space.

The customers targeted by Wal-Mart, Office Depot, Google and others are very small businesses, most with less than $1 million in revenue -  a segment seen as unattractive by many financial institutions. But by ignoring this segment, financial institutions are providing an entry point for new competitors who may leverage this beachhead to become significant players in the financial services industry.

 

About Steve King:  Steve is a Partner at Emergent Research. His current research and consulting is focused on economic decentralization, the growth of small business and the future of work and workplaces. Steve has extensive consulting, marketing and general management experience with both large and small companies.  Steve is a senior fellow and board member at the Society For New Communications Research, a research affiliate at the Future of Work and an advisory board member at Pond Ventures.

About Carolyn Ockels:  Carolyn is the Managing Partner at Emergent Research.  Her current research and consulting is focused on economic decentralization, the growth of small business and Gen Y.  Carolyn has extensive consulting experience, and prior to Emergent Research managed Cambridge Energy Research’s Asian energy consulting business, led market research in Japan for RCM Capital Managment, and held a variety of domestic and international consulting positions with the economic forecasting and planning consulting firm Data Resources, Inc.

Social Media Statistics: By-the-Numbers, July 2011 Part II

Below are interesting statistics on social media usage. Feel free to share your favorite social media statistics in the comments section.

  • 178,000,000 million US Internet users watched online video content in June for an average of 16.8 hours per viewer (Source: comScore)
  • 58% of Twitter users who have tweeted about a bad experience have never received a response from the offending company (Source: Useful Social Media)
  • 46% of corporate communicators say they use Radian6 as their primary social media listening tool (Source: Access)
  • 50,000,000 websites are powered by WordPress (Source: WordPress)
  • 10,000,000 users for fledgling social network Google+ (Source: Google)
  • 1,000,000 registered Twitter apps, up from 150,000 last year (Source: Twitter)
  • 36,000 businesses have signed up to use Google+ in just two weeks (Source: The Next Web)
  • 550,000 Android devices are activated per day (Source: Google)

Use Google Analytics? The Social Media Examiner outlines how to track Tweets, Facebook Likes and more.

Google Wallet: How will it affect banks and merchants?

The Google Wallet announcement made a few weeks ago continues to spur discussion of its implications. Banks and merchants wonder how this service will affect their customer interactions, specifically how it will change merchant funded rewards.

Once Google Wallet launches to a wider audience, the company will be able to see purchases customers are making in real-time, and be able to record spending history. The company, who already has come under scrutiny for keeping users search data, will have an upper hand with concrete insight into customers’ spending habits. On the flip-side, banks continue to market this data to vendors, giving them access to customers’ spending habits via merchant-funded rewards cards and incentives.

Daniel Thomas, a Mindful Insights analyst and contributor to NetBanker poses the question, “So, merchants are going to need to decide: should they allow Google to make the reward offer or the banks?  Surely, they won’t compensate both for bringing in the same purchase. That leaves the decision in the hands of the consumers. Do they want to receive points and cash back from Google or from their bank?”

Outside of privacy concerns, what are your thoughts on how the Google Wallet will affect financial institutions and merchants?  Let us know your thoughts by tweeting at @bankingdotcom or responding in the comments section below.

From Fiction to Reality: Streamlining the Financial Information Flow

Novels often look to the future to correct the problems of today. Cory Doctorow’s Makers explores how future generations could handle the mass flow of information we receive every day by automatically prioritizing alerts, emails and feeds.

Jim Bruene of NetBanker relates this ideal outlook to how companies like Google are prioritizing information via the Priority Inbox, visually directing the user to the most relevant and important emails and items. With the constant influx of financial account data and information it can be hard to find the pertinent information that you want. Bruene takes a cue from Doctorow’s novel by saying,

“I’m looking forward to the time when my bank, card issuer and/or third-party aggregator does the same for my finances: alerting me to odd transactions, excessive charges, and potential savings. And more importantly, helps me take action to resolve the issue.”

You can read Bruene’s full article here.

How are you trying to show the most relevant financial information to customers?  What do you see as the biggest problems, and which tools are trying to solve them? Let us know in the comments below.