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Mobile Only Banking: The Pros & Cons for Financial Institutions

May 13, 2013 By Heather Youngo 1 Comment

If you commute to work, go to the grocery store or walk down a busy street, chances are you will see someone using their smartphone. As a mobile-only lifestyle becomes more common, financial institutions have started offering additional mobile products to keep customers engaged across a variety of platforms. But, with this shift to mobile only banking comes a challenge to financial institutions: the ability to effectively cross-sell, especially as mobile users rely predominately on their mobile devices to conduct banking tasks and visit the bank branch less frequently.

According to the Online Banking Report [1], “We are almost at the peak of online access, with just one million new online households added last year, the fewest annual total since Internet banking came on the scene in 1995. The growth going forward will almost all be on the mobile front. It’s been a fantastic five years in mobile, growing from less than 1 million U.S. households to about 28 million.”

Adding to this, an Intuit study of financial institution customers found that mobile only consumers are more actively accessing their financial information than consumers who only use a PC. Online only logins per customer average 9.96, while mobile only logins per customer average 16.6.[2]

Mobile banking has many of the same benefits that are commonly used in PC banking, such as transaction history, bill payment and transferring money between accounts. Other positive outcomes to promoting mobile only banking include a lower cost to the financial institution per customer, as well as sustaining the generational aptitude to use mobile banking products. Javelin [3] “estimates that each in‐person transaction at a bank branch costs financial institutions an average of $4.25, while use of the online channel averages $0.19 per transaction and the mobile channel averages a mere $0.10.”

There are also many benefits to the financial institution to promote mobile only banking as the upcoming generation is focused on mobile and have a higher earning potential compared to older generations. An internal Intuit study of 27 financial institutions[4] found that 84 percent of mobile bankers are Gen Y and Gen X, and Javelin pointed out that by 2025[5], Gen Y will account for almost half of the nation’s personal income (46 percent). Targeting these specific users is a strong opportunity for revenue growth for financial institutions in the future.

Financial institutions will need to consider altering their branch banking methods as more consumers switch to mobile only banking versus online only. One challenge that financial institutions face from mobile banking is the inability to grow cross-sell opportunities through the online and/or branch channel, especially to Gen X and Gen Y. These generations are the future of banking. Mobile vendors are working on features to solve how financial institutions will handle cross-sell when fewer customers are entering the branch and less are logging online because mobile only is taking over.

Ilya Shalman, a Senior Certified Project Manager at Cap Tech Ventures wrote [6], “Financial institutions continue to struggle with creating cross-selling opportunities across their mobile channels… while the entire product offering from the online consumer site could be integrated into a mobile app, most options are not available. The failure to focus on cross-selling across channels is not only detrimental to your channel integration strategy but ultimately a threat to your bottom line.”

Ilya offers three threats to cross-sell on mobile banking: lack of mobile real estate, mobile platform immaturity, and code rigidity to incorporate. However, there are possible solutions for these threats. In addition, Andera’s Melanie Friedrichs wrote, “When it comes to cross-selling, experts suggest that less is more – consumers who haven’t thought about other products are likely to gloss over the heavy text and hit next as quickly as possible. If they are presented with a small number of choices and they can absorb the offer with only a few words, they are more likely to pause and consider the offer.”

A majority of the customers enter the branch for deposit only interactions. The issue with deposit only transactions at the financial institution is that once mobile remote deposit capture grows and the younger generation begins to deposit checks through their mobile device versus the branch, branch interactions will decline[7]. There will be a need for customer service representatives at banks and credit unions to morph into cross sell warriors, targeting those customers that still enter the branch.

As mobile only banking continues to grow, one cannot help but consider the positive and negative aspects this situation may bring. Mobile only banking will surely decrease transaction cost to the financial institution, as well as targeting a high earning potential market in the upcoming generations. However, the challenge of cross-sell efficiency will need to be combated with new practices. In addition, with the rise of Mobile Remote Deposit, comes declining deposit activity in the branch. What do you think about the idea of mobile only banking? Will this become a strong benefit to the financial institution, or will it begin to cause challenges that the financial institution will have to consider and combat?

About Heather Youngo: Heather is a business analyst with Intuit Financial Services and leads the initiative on generating and maintaining the accuracy of financial institution profitability data. Heather holds a Bachelor of Business Administration degree in marketing from the University of Georgia.

[1] Online Banking Report, Number 212, January 5, 2013, page 5

[2] Intuit Internal Internet Banking/Mobile study of 7 Intuit financial institution customers, February 2013

[3] Javelin Strategy & Research, A Tale of Two Gen Ys: On the Road to Long-Term Banking Profitability, page 6, January 2013

[4] Internal study of 33 Intuit financial institution customers, June 2010 through February 2013

[5] Javelin Strategy & Research, A Tale of Two Gen Ys: On the Road to Long-Term Banking Profitability, page 9, January 2013

[6] Ilya Shalman, with Michael Tevebaugh, Chris Crawford, Debbie Miller, Craig Miller: From “The Handheld Billboard – Cross Selling with Financial Services Mobile Applications”, from CapTech Blogs, July 2012

[7] Internal study of one Intuit financial institution client, November 2012

Filed Under Data & Research Tagged With financial institutions, Intuit, mobile banking, online banking

Mobile Banking Revolution (Infographic)

May 7, 2013 By Banking.com Staff 2 Comments

It’s no secret that mobile banking has taken off in recent years and continues to grow by leaps and bounds. To help illustrate just how much mobile banking is growing FICO pulled together an infographic with some impressive mobile stats. For example, did you know that by 2017 an estimated 1 billion people will be using mobile banking? Read on to learn more about the mobile revolution.

Mobile Banking Revolution

Filed Under Data & Research Tagged With gen y, infographic, mobile, mobile apps, mobile banking, mobile banking revolution

What We’re Reading: Small Business Banking, Mobile Growth and Social Media

May 6, 2013 By Banking.com Staff 3 Comments

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.

Small Business Owners to Banks: Meet My Needs

American Banker

Small businesses want banks to add more of a personal touch. Nearly a quarter of owners of companies with less than $10 million in annual revenue want their bank to make adjustments to meet their individual needs, according to a survey published Monday by U.S. Bank (USB). More than 20% of small businesses owners also want their banks to make more money available and to connect them with other small business owners. A fifth of those who participated in the study want their bank to serve as a financial mentor, according to the fourth edition of the Small Business Annual Survey.

Using Big Data to Fight Phishing

Bank Info Security

Using so-called big data to develop phishing intelligence systems that can connect e-mail attacks to specific criminal activities and groups over time is a good way to thwart targeted schemes, researcher Gary Warner of the University of Alabama at Birmingham says during an interview with Information Security Media Group. Rather than relying on e-mail signatures to filter out spam, Warner says organizations should rely on the e-mail data and statistics they collect. “We need to do more proper analysis of the log data,” he says.

Mobile Growing, But Still Not Preferred Channel

Bank Systems & Technology

Jason Malo, a research director in the CEB TowerGroup’s Retail Banking and Cards practice, reported that the majority of mobile bankers use the channel for alerts, with occasional transactional capability. According to a recent TowerGroup survey of mobile banking consumers, 54% said the most important mobile function to them was being able to receive notification from their bank about irregular account activity or changes to their account. That was followed by 51% who reported their most important mobile function was bill pay capabilities, while 46% listed notification of low account balance as the function they most wanted from mobile banking. 43% of respondents listed remote deposit capture capabilities as what they most desired from the mobile channel.

Banks plot major shrinking of branches

Crain’s New York Business

To cut costs bankers say hello to banking’s brave, new, cramped world. At about 1,000 square feet, [a new prototype branch is] 75% smaller than the traditional Wells Fargo outpost upstairs. Driven by changing consumer behavior and the urgent need to reduce costs, banks are devising ways to cut their branches down to size. Wells Fargo opened its first next-generation branch in April in Washington, D.C., and is looking to open seriously shrunken branches in New York and other major cities. JPMorgan Chase & Co. has started building branches that are 25% smaller than older models.

A New Social Media Platform For Advisors

Financial Advisor Magazine

The progress of social media is inexorable and inevitable. Yet many financial advisors are still trying to figure out how to play the game without getting into hot water with regulators. Finect, a New York City company, has recently rolled out an online platform aimed specifically at the financial services industry. The company believes it can help financial advisors meet their professional and compliance needs in the social media era. “Financial advisors are tiptoeing around social media and are looking for help to move forward,” says Jennifer Openshaw, Finect’s president.

In-Branch Tablet Banking Kiosks: Ideas, Opportunities and Costs

Financial Brand

The introduction of the iPad brought with it a whole new world of marketing opportunities for banks and credit unions. What are some examples of things bank and credit union marketers are currently doing with tablet kiosks? Jon VanderMeer, CEO/Kiosk & Display: The capabilities for kiosks and tablets is about 99% the same, only the form factor is different. Potential tablet uses include: In-branch demos, training and troubleshooting, onboarding new customers into online banking, and digital alternative to printed brochures where branch visitors can review and compare products.

Financial Pain Ensues When Custodians of Health Fail to be Good Stewards of Privacy

Javelin Strategy & Research Blog

The healthcare industry stores massive amounts of PII, and it is incumbent on them to protect that data from theft. According to Javelin research, approximately 1 in 9 data breach victims in 2010 were fraud victims – this correlation grew to 1 in 4 as of 2012! Social Security numbers are the keys to the castle when it comes to financial accounts. In our 2013 Banking Identity Safety Scorecard, 80% of the institutions examined still allowed consumers to authenticate themselves with SSNs.

Mobile Remote Deposit Capture and More Convenient Banking

Main Street

Mobile remote deposit capture (MRDC) has become banking technology’s must have for 2013. But MRDC is just the beginning of how the camera changes banking. Next up: picture bill pay. It works like this: You get a bill. You could input biller data – account numbers, addresses, all those details – into online banking. Or you could snap a picture of the bill and let the software – developed by the same folks who created MRDC – populate a payment form with all that information that has been harvested from the bill.

Banking by Voice Gets Test From U.S. Bank

The Street

Smartphone users are just getting used to issuing voice demands to make phone calls, get directions or ask for dining-out options. Now mobile phone users may be getting another audible option: using voice commands to conduct personal banking. U.S. Bank is testing a voice-banking service that enables customers to check account balances, review transactions and pay bills solely through voice activation. For now, U.S. Bank is limiting the app test campaign to its FlexPerks Travel Rewards program and to its employees; the voice-activated technology comes from Nuance Nina Mobile, and is now limited to iPhone and Android phones.

Filed Under Industry News Tagged With big data, cybersecurity, mobile, mobile banking, small business, what we're reading

What We’re Reading: Mobile Money, Outages and PFM

February 21, 2013 By Banking.com Staff Leave a Comment

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.

JPMorgan Chase Endures Website Outage

American Banker

JPMorgan Chase’s (JPM) website was shut down for some Friday, stopping bank customers from retrieving their accounts. The New York bank took to Twitter to tell customers its online banking was “experiencing intermittent issues” that the company was working to resolve. The outage endured for a few hours, bank spokesman Tom Kelly told American Banker. “We’re back to normal response times now,” Kelly said. JPMorgan Chase is researching the cause of the outage, Kelly said.

Moven From Mobile Banking to Mobile Money

Bank Marketing Strategy

February is definitely a pivotal month for the start-up previously known as Movenbank, having changed its name to Moven, winning the best of show honors at Finovate Europe and gearing up for a February 25 closed beta launch of its mobile-optimized financial services application. Similar to Simple, while not having a banking charter, Moven provides a unique customer experience interface with a traditional banking organization working in the background (with banking licenses, FDIC insurance, etc.).

A Look At What Citi Is Doing With Online Platform

Credit Union Journal

After Forrester Research dubbed Citi’s online banking site the best in the U.S. recently, Tracey Weber, Citigroup’s head of internet and mobile banking and Bank Technology News’ Mobile Banker of the Year for 2012, spoke about the bank’s latest initiatives. The developers made the site simpler, cleaner, and easier to navigate, she says. “We elevated a lot of the quick tasks that you do on a regular basis, like paying a bill, without having to continually have to find your way back to the dashboard. We also integrated PFM and account integration into the dashboard.” Citi partners with Yodlee for PFM and account aggregation.

Four Common Misjudgments About Whether Consumers Want PFM

Javelin Strategy & Research Blog

There is a spirited conversation occurring in a Personal Finance Management subgroup on LinkedIn, spurred by Mary Wisniewski’s column in American Banker about how “PFM Defies Definition.” The heart of the discussion points to the growing awareness that PFM must break free from the 1980s definition of budgeting and investment tools for do-it-yourself PC enthusiasts with a masochistic delight for details, tracking, and quantitative analysis. The financial services industry makes a number of fundamental mistakes in their thinking and approach to PFM.

Banks to spend $118B on tech, mobile banking in 2013

Mobile Payments Today

Retail banks worldwide will increase their IT spending by 3.4 percent this year — to a total of $118.6 billion. Industry analysts at Ovum predict that spending in Asia will rise 5.1 percent, followed by North America at 3.3 percent, and Europe at 1.8 percent. In a new business trends report, Ovum said that mobile banking would be a “clear IT investment priority in 2013.” The company suggested that total spending for online channels — including online and mobile browser-based services — will grow by 6.2 percent in 2013.

More Than 12 Million Identity Fraud Victims in 2012 According to Latest Javelin Strategy & Research Report

PYMNTS.com

The 2013 Identity Fraud Report released today by Javelin Strategy & Research reports that in 2012 identity fraud incidents increased by more than one million victims and fraudsters stole more than $21 billion, the highest amount since 2009. The study found 12.6 million victims of identity fraud in the United States in the past year, which equates to 1 victim every 3 seconds. The report also found that nearly 1 in 4 data breach letter recipients became a victim of identity fraud, with breaches involving Social Security numbers to be the most damaging. Over the past year, companies are responding more quickly which means a consumer’s information is being misused for fewer days than ever before, and the mean cost per victim has been flattening.

Finance and the American poor: Margin calls

The Economist

In December the Federal Deposit Insurance Corporation (FDIC) released a survey that found roughly one in 12 American households, or some 17m adults, are “unbanked”, meaning they lack a current or savings account. The survey also found that one in every five American households is “underbanked”, meaning that they have a bank account but also rely on alternative services–typically, high-cost products such as payday loans, cheque-cashing services, non-bank money orders or pawn shops. Not all the unbanked are poor, nor do all poor people lack bank accounts. But the rate of the unbanked among low-income households (defined in the FDIC survey as those with an annual income below $15,000) is more than three times the overall rate.

Mobile Banking Now Vital To Customer Acquisition

The Financial Brand

A survey recently fielded on FindABetterBank uncovered that 88% of shoppers who said mobile banking is a “must have” feature are already mobile banking users. Therefore, as more consumers download their bank’s mobile apps and begin using them, you can expect the number of consumers demanding mobile banking when they’re shopping for a new institution to increase steadily. Few people, however, defect from an institution simply because mobile banking isn’t offered.

Every company now a digital business

ZDNet

The convergence of social media, mobile computing, analytics and the cloud is transforming the way businesses operate. Companies that adopt available technologies to “go digital” will be better positioned to take advantage of rapidly shifting business opportunities and leap ahead of the competition, according to Accenture’s Technology Vision 2013 report. Since technology is now core to virtually every aspect of a business, every company is a digital business and all senior leaders–not just CIOs–must be able to understand, embrace and drive value from new technologies that affect their organizations, it added.

Filed Under Industry News Tagged With acquisition, Citi, customer experience, finance, fraud, margin, mobile banking, movebank, payments, PFM, what we're reading

The Mobile Revolution: Remote Deposit Capture

February 6, 2013 By Jason Weinick 3 Comments

The tablet revolution. The post-PC era. The smartphone explosion. No matter what label resonates the most with you personally, the idea is the same: personal computing is changing. People are spending more time with smaller devices, such as tablets and smartphones, and less time on desktops and laptops.

Recent data from Forrester Research, Intuit and Bain & Company point to this mobile revolution:

Approximately 90 percent of adults own a mobile device, of which smartphones are rapidly approaching half of all mobile devices in the marketplace.
Approximately 96 percent of U.S. households have at least one wireless subscription.
Roughly over 1/3 of online bankers are actively using their mobile device to engage with their financial institution, and mobile bankers are accessing their financial information 59 percent more often than non-mobile online bankers.
Roughly three-quarters of branch interactions are routine (deposits, withdrawals and account balance inquiries), driving up costs and diverting resources from more important interactions.

The new online and mobile lifestyle requires digital banking as a new way of delivering a connected lifestyle. Customers would like to bank anytime, anywhere and on any device. Giving your customers the ability to deposit checks anytime and anywhere using a mobile banking app is the next revolution in that connected state.

I recently had the opportunity to analyze the behavior of customers who utilized mobile remote deposit, which was offered by a financial institution who uses Intuit Financial Services for their online and mobile banking platforms. The analysis solely focused on customers who had an open checking account and made at least one deposit into the financial institution in each month of the analyzed time period.

Although the financial institution was less than six months into the product lifecycle, the results were extremely encouraging:

Does mobile remote deposit cause customers to frequent the branch/ATM less for their deposit needs?

Intuit research indicates the answer is YES. Mobile remote deposit is changing consumer behavior and transferring more of those routine, costly “human” touch points to a less costly channel. Customers which ultimately used mobile remote deposit were using the branch for 29 percent of their deposits prior to using mobile remote deposit. Once the consumer starting using the service, their deposit behavior at the branch decreased to 19 percent – mobile remote deposit diverted 10 percent of all deposits away from the branch. Customers who never used mobile remote deposit did not experience a shift in their branch behavior. Usage of the ATM for deposits also declined for mobile remote deposit customers – 9.2 percent in the “before” period vs. 6.5 percent in the “after” period.

With the cost of gasoline over $3.50/gallon in most places, from the consumer perspective, think how much it costs (including time inefficiency) to drive to your local branch and make a deposit. Mobile remote deposit saves consumers money and is a more efficient alternative that savvy customers will demand.

What will this shift in behavior – from in-branch to mobile remote deposit – mean for the brick and mortar business model? In the short-term, it doesn’t appear financial institutions are in a hurry to reduce customer service headcount or slow the pace of new branch openings. The digital banking channel has created a more efficient operation; however, should not be viewed as an alternative channel. Rather, digital banking is moving towards more of an extension of the branch and with the reduction of “routine” transactions, in-branch representatives can invest more of their time cross-selling products rather than depositing a check.

Does mobile remote deposit cause customers to increase their deposit activity?

Study results from Intuit indicate the answer is YES. Customers who used mobile remote deposit increased their monthly number of deposits by two percent, while those customers who didn’t use the service actually experienced a decline in their number of monthly deposits by three percent. Did the customer using mobile remote deposit magically begin receiving more checks once they started using the service? Likely not, but rather, instead of depositing a check into another financial institution, (perhaps for a savings or retirement account) they now deposited these funds into the financial institution which offered mobile remote deposit, which means the financial institution has further positioned themselves as the customers’ preferred financial institution.

Does mobile remote deposit lead to higher consumer acquisition and/or lower consumer attrition?

To be determined. When I measured the results of mobile remote deposit, the financial institution was less than six months into the product offering with its customers The hypothesis is that mobile remote deposit will strengthen the consumer relationship and thus extend the consumer lifecycle. Additionally, now that the financial institution is offering this value-added service, the belief is that this product will attract new customers to the financial institution and win business from the competition. This could be especially true for the Gen Y and Gen X segments. The comment “attracting a younger demographic” is posed as a strategic initiative in my conversations with financial institutions. Over 75 percent of mobile bankers are Gen X and Gen Y, so these demographics will be the most likely to utilize mobile remote deposit.

The customers most likely to adopt the mobile remote deposit feature are cost‐effective bankers. They monitor their finances through the Web or their mobile phone at a higher propensity than all other customers, which lowers operational costs for the financial institution. In short, customers who desire mobile remote deposit utilize technology that is beneficial for the financial institution and the consumer.

About Jason Weinick: Jason is a Senior Analyst with Intuit Financial Services and leads the initiative on client profitability analyses, providing banks and credit unions a valuable in-depth look into the value of the online channel. Jason’s background includes 15 years experience within the financial services sector, focusing on consumer behavior, risk modeling, reporting, and financial analysis. Jason holds a Bachelor of Science degree in Finance from Clemson University.

Sources: Forrester Research, May 2011; Intuit Financial Services Profitability Study, April 2012; Bain & Company Customer Loyalty in Retail Banking Americas, 2011

Filed Under Data & Research Tagged With data, financial data, Intuit, mobile, mobile banking, remote deposit capture

Going Luddite on Mobile

October 22, 2012 By Banking.com Staff Leave a Comment

Tracking the adoption of mobile banking is like putting human behavior under a microscope…again. In a sense, it’s very much like the adoption of online banking (or online anything else), only on a much faster scale. To some, it’s still odd working with professionals who can’t remember what business was like before the Internet. Imagine how we’ll feel when the colleague in the next cubicle has no memory of life before “there’s an app for that.”

The issue seems to have taken on extra relevance because there’s been a flurry of articles recently about how mobile banking is not being adopted as widely as it should because of security concerns. Even the Better Business Bureau (BBB) is offering tips on safe mobile banking practices.

There’s nothing wrong with good, sensible advice, but maybe we need some perspective here.

First, let’s be clear about the adoption of mobile banking: It’s growing at an astonishing rate. As far back as 2011, an eternity in tech years, research firm Yankee Group projected in its Mobile Money Forecast that global mobile transactions would grow from $241 billion last year to $1 trillion-plus by 2015. That’s a staggering CAGR (compound annual growth rate) of 56%–how many other trends can we say that about?

More to the point, the practice continues to grow without huge amounts of education or even promotion. Just a few years ago, the term ‘mobile app’ didn’t even exist; now there are literally millions of them, and most of us are blasé about what we choose to download and use on a regular basis. The mobile device has effectively blurred the distinction between personal and business use and forced our employers to keep up rather than push us to try new software.

Sure, putting money into the mix changes things. It’s one thing to download a video game for playing while on the road and entirely another to use a new button to make an impulse investment or just transfer funds. But what’s remarkable is not how few people do exactly this and more, it’s how many do it every day.

Again, good advice is always welcome, but it’s likely that most of have already heard (perhaps many times over) what the BBB is telling us we should do to protect out investments. Don’t follow links; don’t download authorized applications; keep devices secure. That said, we probably need to keep hearing it.

It used to be said that while Windows PCs got hacked relentlessly, Macintoshes were pretty safe. That’s statistically accurate, and therefore true, but one reason is that the customer base for Apple products was comparatively small. Hackers went after Windows users for the same reason that Willie Sutton allegedly gave for robbing banks: that’s where the money is. Well, guess where the money is now.

There will always be some, from the hyper-cautious to the Luddites, who resist mobile banking. The alternate reality is that there’s already a vast customer base for mobile banking, and they deserve the greatest attention (which is exactly what cyber-criminals are giving them).

The mobile experience for every human action will continue to evolve and gain in popularity, and banking is no exception. There will be viruses and data breaches, and a few will gain enough of a profile to scare off some potential users. But the technology itself offers too much flexibility, productivity and convenience to completely outweigh the risks.

There’s a downside, and we need to keep it in mind. But as industry professionals, it’s our job not to be overwhelmed by the threats but instead focus on keeping the practice as secure as possible. Our customers—and there are many of them—need that.

This article originally appeared as a guest post on MyBankTracker.com.

Filed Under Industry News Tagged With banking news, banking services, mobile apps, mobile banking, mobile payments, mobile wallet, online banking, PFM tools, security

What We’re Reading: Mobile Payments, Bank Fees and BAI Retail Delivery

October 19, 2012 By Banking.com Staff Leave a Comment

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

Small Institutions Face a Dangerous Technology Gap

American Banker

Community banks and credit unions are well behind the innovation curve, enough to draw alarms from one of the segment’s most ardent advocates. “What is amazing about our industry is your customers and members use Amazon and Hulu and Square and we think it’s OK that when those customers and members walk into our branches they are going back 30 years,” said Louis Hernandez, chairman and CEO of Open Solutions. Open Solutions operates the DNAappstore in which smaller banks and credit unions can be certified to develop and share tech products, which are called DNAapps.

Finance CIOs reveal plans to recover from recession

Computer Weekly

The Financial Services Report research out by IT giant Fujitsu analysed the activities and plans of 55 banks across the retail, investment and wholesale banking sectors. CIOs were asked for their top three IT priorities for the next three years. Over half (51%) listed reducing cost as a top priority, while 27% said upgrading IT systems, 22% improving customer experience, 20% mobile banking and 18% said moving to the cloud. A total of 85% said the IT department is attempting to meet the needs of the business by doing more with less. Mobile banking is high on the agenda. A significant 71% of the CIOs surveyed said mobile banking is important for customers compared to 49% that were asked the question three years ago. The biggest overall benefit of mobile banking is the ability to generate new revenue streams, with 80% citing it as a key benefit. Better customer retention is a key benefit according to 76% of respondents.

How Checking Account Fees and Terms Vary by State

New York Times Bucks Blog

No one likes to pay bank fees. And they are even more annoying when it is clear that the amount and variety of fees can vary depending not only on where you bank, but also on the state where you live. The Pew Safe Checking in the Electronic Age project, part of the Pew Charitable Trusts, recently analyzed the fees and terms offered to consumers in the 50 states, using the country’s 12 biggest banks by deposits. Nationally, for instance, Pew found that 89 percent of checking accounts had a monthly fee. The median fee was $12, and the median minimum balance amount necessary to avoid the monthly fee was $2,000. The median length of a bank disclosure, meanwhile, was 69 pages. And the median number of “extra” fees – categories beyond the 12 most common fees charged by many banks – was 26.

At BAI: The Mobile Wallet Wars Are On: Onsite Coverage

Credit Union Times

The mobile wallet wars will be over inside two years. That was the chilling prediction offered on Thursday at the BAI Retail Delivery conference by Carl Tsukahara, chief marketing officer at Monitise. The U.K.-based mobile apps developer recently acquired ClairMail, which had succeeded in staking out a foothold in the U.S. market “but as Monitise we are unknown in the U.S.,” Tsukahara shrugged. Tsukahara’s message to financial institutions is that the time has passed for sitting on the sidelines because non-banks – think PayPal, Google, Amazon, possibly Apple – are circling and they seem ready to attempt to disintermediate financial institutions. Tsukahara cited third-party research that showed 50% of consumers indicated a preference for PayPal as their mobile wallet provider. Thirty-percent (30) liked Google. A similar number liked Apple.

Who’s Securing Mobile Payments?

Bank Info Security
Google and Facebook are in the mobile payments arena. But consumers still expect their banking institutions to secure the mobile wallet, says Alphonse Pascual of Javelin. What role must banks play? Pascual, who focuses in security, risk and fraud at Javelin Strategy & Research, says banking institutions must declare their roles as security experts in mobile payments, and they have to stake their claims early. As more non-traditional financial players take seats at the emerging payments table, the burden of security leadership and fraud prevention will fall on the shoulders of traditional financial-services providers, he says.

How to Cut Bank Fees

Barron’s

Get ready to see banking costs and balance requirements go up while free checking is put on the endangered-species list. That’s the expensive state of banking, according to BankRate.com’s 15th annual checking survey, which concludes that banks are in a “fee-ing frenzy.” The average monthly fee on basic checking accounts rose 25% over the past year to a record $5.48, says the survey. The average minimum balance required to avoid that charge on “free” checking accounts rose 23% to $723 nationwide, also a record. Neither a checking nor basic savings account pays enough interest these days to bother calculating. Accounts still called “free” have dwindled from 76% of all checking in 2009 to about 39%, notes McBride, and will grow scarcer.

Filed Under Industry News Tagged With banking news, fees, mobile banking, payments

Intuit Financial Services’ Innovation Conference: Mobile Trends, Technology Transformation, and Personal & Small Business Finances

October 15, 2012 By Banking.com Staff 2 Comments

In early October, Intuit Financial Services hosted its annual user conference, the Intuit Innovation Conference, in Nashville, Tenn. The conference brought together industry leaders from banks and credit unions across the country, and discussed key topics affecting the financial services industry. To provide a broad spectrum on issues, Intuit hosted an array of esteemed keynote speakers included Steve Forbes, Chairman, CEO, and Editor in Chief at Forbes Media; Tom Kelley, General Manager of IDEO; and, Dan Ariely, behavioral economist and author.

The Banking.com staff got a chance to pull key tidbits from the event, which focused on mobile trends, technology transformation, and personal and small business finances. Below are some top tweets and highlights from the conference:

Mobile:

Tablet users touch their financial institution (FI) 30 times per month across multiple devices (tablet, phone and PC) not including text banking touches.
Smart phone remote deposit users deposit approximately 2+ checks per month at an average of more than $420 per deposit. Cost savings to FI – $3 each deposit over using a branch.
30% of customers now factor mobile solutions into why they choose their primary FI.
Average mobile phone user now spends 12 minutes/day on the actual “phone,” two hours/day doing other things.
Mobile is the primary way people interact with their FIs today and growing; mobile banking up 63% to 57 million in 2011.
10% of online banking users are now using their tablet.

Technology Transformation:

Web and mobile is eliminating intermediaries like traditional editorial process. Media model of last 150 years has been blasted away.
Mobile is changing the media model again. Everything in marketing must be customized to the individual. There are more specialized segments than ever before.
Contingent workforce will be 40% in few years (following passions, seeking work/life balance). This offers a new set of financial complexities that financial institutions will need to consider.
Digital trends shaping future behavior:
- World without borders
- Participatory networks
- Mobile first & only
- Humanizing the data
- Reputation rules
“The Digital channel has increased engagement 3x to 32 times/month” – Intuit Financial Services General Manager, CeCe Morken

Personal & Small Business:

2/3 of personal businesses don’t track their mileage for tax time or they track it incorrectly.
50% of small businesses use manual methods (pen paper) to manage finances.
Average value of personal business to an FI is $5,000 in revenue per year. Consumer value is $500.
Personal small business market segment is growing. Forecast is 32 million by 2018.
Personal businesses take longer to make buying decisions than consumers and larger businesses.
“74% of #smallbiz owners aren’t wowed by their FI”-Christine Barry of @AiteGroup

A recurring theme of the conference was mobile in the banking industry; how important is a mobile presence to you? Does your FI meet your needs with its mobile solutions? What do you expect from your FI’s when dealing with mobile? Leave us a comment below.

Filed Under Industry News, Social Media Tagged With #IFSNC, Intuit Financial Services, mobile, mobile banking, tablet banking, twitter

Mobile Transactions: Playing with Numbers

August 17, 2012 By Banking.com Staff Leave a Comment

Could it be that the only numbers growing faster than mobile transactions are statistics about mobile transactions?

According to a new one just out from ABI Research, mobile shopping will make up nearly a quarter of all global online shopping revenue by the end of 2017. That’s great news for companies invested in this arena, since it clearly represents a sharp spike over the current market, which other estimates place at 10%. However, the same source indicated back in February 2010 that mobile shopping would reach $119 billion in 2015, representing about 8% of the overall e-commerce market.

That’s obviously comparing apples to oranges, but the larger problem is that it’s virtually impossible to accurately predict what’s going to happen with regard to technology use. Technological capabilities are always advancing, and user habits are constantly evolving, but the two phenomena frequently seem unrelated. The emergence of new capabilities does drive usage, of course, just as human needs drive the development of those capabilities, but they seldom happen in tandem. The flood of statistics that keep changing illustrates this problem.

In particular, the intersection of money, technological capabilities and behavioral change make for a strange brew. This is the very essence of a moving target.

Consider mobile payments. Portio Research told us back in March 2010 that 81.3 million people worldwide had used mobile device to make payments the previous year. By the end of 2014, this was predicted to rise to nearly 490 million, or 8% of all mobile subscribers. In June 2011, Yankee Group was putting dollar signs into the mix, reporting that global mobile transactions would reach $241 billion in 2011, and jump to more than $1 trillion by 2015. Fast forward another year, and Gartner was reporting that the number for worldwide mobile payment transaction values in 2011 had been $105.9 billion, and will surpass $171.5 billion in 2012. Bringing it back to users, meanwhile, Gartner said there had been 160.5 million in 2011, and is set to jump to 212.2 million this year.

One more demonstration of how the numbers stack up, even if they don’t add up: Yankee Group identified EMEA as the mobile money hot spot, accounting for 41% of mobile transaction value in 2011, compared to 35% for North America, 22% percent in Asia-Pacific and just 1% percent in Latin America. Others saw it differently: According to IDTechEx (R&M), Feb 2011, Japan had 47 million users adopting tap-and-go phones in just three years, and at the very same time, ComScore was revealing that that in December 2010 alone, 10% of Japanese mobile subscribers had used their mobile wallet to make a purchase—a undeniably a high number.

And how about mobile banking? Try this: In the spring of 2010, Global Industry Analysts (GIA) predicted that the global customer base for mobile banking will reach 1.1 billion by the year 2015, while Berg Insight put the corresponding number at 894 million users. In the summer of 2011, Yankee Group brought the figure down further, to 500 million.

Enough already? For sure. In fact—and again, let’s acknowledge that all this involves mixing apples and oranges and a whole lot besides—it may be time for a moratorium on analyses and predictions. Instead, let’s focus more on what we can do to drive the market rather than track where it’s going.

Smartphones, tablets and other mobile devices still coming down the pike are not just smaller PCs—they represent, and drive, a sea change in behavior. It’s our responsibility to offer applications and services that are flexible, convenient, customized and secure. And the only numbers that count are the ones where we beat even the most optimistic projections.