What We’re Reading: Biometrics, Photo Bill Pay, Mobile Wallet

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.

  • U.S. Bank Pushes Voice Biometrics to Replace Clunky Passwords

American Banker 

When U.S. Bank announced Wednesday that it’s testing voice biometrics for possible use by customers to access account information, it joined a line of banks that have been testing this technology, including Wells Fargo (WF) and Barclays. Voice biometric software users log in to an application or website by speaking a word or phrase. That word or phrase is compared to a previous recording the customer has made, to verify it’s the same user. Many industry observers have been saying for at least a year that the password is dead and more secure alternatives to authentication, such as voice biometrics and iris scans are needed to verify a user’s identity when banking online or via a mobile device. Some press accounts Wednesday stated that the goal for U.S. Bank’s pilot is to improve customer data security.

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  • Mobile Photo Bill Pay Continues Shaky Start

Credit Union Times

Major players are investing in mobile photo bill pay as a natural next step to mobile deposit checking but the tool may have a long way to go to catch up with taking pictures of checks with smartphones. In the past year, 600 to 1,000 banks have installed mobile RDC and less than a dozen have done the same with mobile photo bill pay, said Bob Meara, an Atlanta-based senior analyst for the New York-based research firm Celent. “Mobile RDC is this wonderfully convenient invention and it scores highly on all the consumer surveys, but if you ask the same question about mobile photo bill pay, people just don’t get as excited about it, for a variety of reasons,” Meara said. “It’s just not as compelling.”

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  • It’s Time to Rise Above the Risk and Compliance Whining

Gonzo Banker

According to The Cornerstone Report, 7th Edition, bank assets per enterprise risk management FTE decreased from $147 million in 2010 to $55 million in 2012. Furthermore, the gap between median and 75th percentile performers was much wider than the gap between 25th percentile and median performers.

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  • MCX and Paydiant Mobile Wallet – and Capturing the Consumer

Javelin Strategy & Research Blog

MCX announced it would be adopting the Paydiant mobile wallet, a cloud-based, white label platform. MCX is a consortium of 70 prominent brands with 110,000 locations representing over $1 Trillion in annual payments volume and 700,000 loyalty cards. MCX includes companies like Wal-Mart, Best Buy, CVS, Bed Bath & Beyond, Target, Exxon, Southwest, and today it extended to QSRs like Wendy’s. FIS, rated Javelin’s Best in Class Mobile Banking Vendor provides MCX with payment processing, routing and settlement for mobile commerce transactions.

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  • Study finds small business mobile banking services lacking in US

Mobile Payments Today

U.S. banks need to make a greater effort to capitalize on their small business customers’ appetite for mobile banking services, according to research by Aite Group. This will involve providing their clients with business-specific mobile banking offerings instead of rebranded consumer mobile banking services, the U.S. consultancy says. In September 2013, Aite Group surveyed 1,003 U.S. companies with revenues of under $20 million for two reports: “Monetizing the Small-Business Opportunity” and “Why Banks Should Offer Mobile Banking to Small Businesses.” The survey found that about 32 percent of those businesses bank via mobile devices, according to Christine Barry, research director for Aite Group’s Wholesale Banking practice.

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  • Banks See More Confidence But Face Threat From New Providers

Wall Street Journal Blog

After a period of sharp decline coming out of the financial crisis, the banking industry has seen a rise in consumer confidence for two years in a row, according to a new survey of 32,000 banking customers in 43 countries. The study, by Ernst & Young, showed that globally, one-third of customers reported an increase in confidence in the banking industry compared to a year ago.  This marks a rise from Ernst & Young’s prior survey in June 2012, when just 22% reported an increase in optimism. In 2011, only 13% percent reported an increase in confidence in the banking industry, compared with 44% who reported a decrease.

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What We’re Reading: Mobile Wallets, Mobile Payments and Mobile Metrics

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 Bank Tries to Beat Big Banks at Their Own Tech Game

American Banker 

With 22 branches and $2.2 billion in assets, Rockville Bank is on the smaller end of the banking spectrum. But the lender has made a big commitment to virtual banking. The Rockville, Conn., company decided last year to create a position dedicated to overseeing its mobile, online, ATM and customer support center services. Now the role has been filled by a woman on the front line of digital banking for nearly two decades: former Bank of America (BAC) online and mobile product executive Donna Patel. Rather than attempt to beat big banks in the race for whiz-bang apps and sophisticated platforms, Rockville plans to focus on harnessing technology to better serve its customers.

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  • Loyalty Startup Seeks Credit Union, Bank Partners to Help Feed the Hungry

American Banker 

Mogl, a startup that’s created a restaurant loyalty mobile app, continues to gain credit union and bank partners for its program, which provides cash back for meals out, with the option of donating the money to local food banks. Financial services partners could benefit by becoming top-of-wallet while also helping to feed the hungry, and in turn, improving their brand images. Currently, the California startup counts nine credit unions, one bank, and two airlines as partners. Three additional credit unions are finalizing their participation in the program. Unlike some apps that use Yodlee or Intuit to power the user’s ability to link in outside accounts, Mogl has users enter in – or swipe in — their payment data. The information is sent to the card associations, which send back a token. Mogl does not store any card data.

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  • Two In Five Americans Will Use Mobile Wallets By 2017

Business Insider 

One-fifth of U.S. smartphone owners used a mobile wallet in 2013. That comes out to 40 million Americans, according to Parks Associates. The market research firm forecasts that this number will grow 183% to 113 million, or 43% of smartphone owners, by 2017. One factor that will likely drive growth is an explosion in payments technologies coming onto the market, which will have broader application beyond payments, including mobile loyalty programs and in-store marketing. These will give a greater number of smartphone users and merchants a reason to start using and accepting mobile wallets.

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  • How OnPoint Community Plans to Build Enthusiasm For Mobile Payments

Credit Union Journal 

OnPoint Community Credit Union is using person-to-person payments as the foundation of building consumer comfort with mobile as a channel for money movement. The $3.4 billion-asset credit union is adopting Fiserv’s Popmoney system, which includes a mobile and online version. Popmoney allows consumers to direct funds to a recipient’s mobile phone number, e-mail addresses or bank account number. “We’ve had very little mobile payment capability, so this is our entry. The opportunity is there to allow members to move money to other members and non-members’ accounts,” says Jim Armstrong, senior vice president of technology and human resources for OnPoint.

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  • Check Your Mobile Metrics

Credit Union Times 

Just five years ago, mobile banking seemed futuristic, the stuff of sci-fi; but today, it has emerged as a must have. That’s a powerful statement by Credit Union Times Correspondent Robert McGarvey in this week’s page 1 story (5 Mobile Banking Trends to Watch in 2014). How many credit unions still think of mobile banking as an optional, whiz-bang feature?

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  • Who are your most valuable Twitter followers? A new firm from ex-Dwolla staff wants to find out

The Next Web 

Payments platform Dwolla has lost its head of business development and its developer evangelist. Alex Taub and Michael Schonfeld have moved on to start their own company called Modern MAST that will develop products aimed at commerce, advertising tools, and APIs. In a post announcing the move, Taub says that the separation from Dwolla was an amicable one and that the two now-cofounders decided that it was the right time to begin their own venture. Why advertising technology? Over the next five years, it’s estimated that $350 billion will be allocated towards next generation ad tools and Modern MAST wants a piece of that.

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What We’re Reading: Unbanked, Twitter, BYOD

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.

 

  • Gruenberg: Cell Phones May Hold Key to Access for Unbanked

American Banker

The Federal Deposit Insurance Corp. plans to issue a report next year exploring whether cell phones could help draw consumers not served by a bank into the mainstream financial system, the agency’s chief said Thursday. “We want to take a hard look at this issue from the perspective of economic inclusion to try to assess what the potential is here in a careful way of using this technology to expand access,” FDIC Chairman Martin Gruenberg said at a conference hosted by the Consumer Federation of America.

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  • New Twitter Rules Stymie Credit Unions From Promoting Themselves

Credit Union Journal

New rules from Twitter have thrown a wrench in the social media works for some credit unions that want to use promoted posts to break through the clutter and highlight their offerings on the popular social networking site. Peach State FCU entered the social media realm in October with Facebook and Twitter profiles, using promoted posts on each site. (A promoted post pays the site to expose the tweet or post to a larger number of users.) But a recent change to Twitter’s rules sometime in November has shut out some credit unions from using this common business marketing practice. “We had some luck with Twitter in October doing promoted tweets and promoting the account as a whole,” said Meredith Olmstead, founder and social media marketing consultant at Social Stairway, who is serving as a social media consultant for Peach State.

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  • Mobile Wallet Collaboration Crucial for CU Success

Credit Union Times

A mobile wallet will only be successful if members adopt and consistently use the app to conduct daily transactions. Ultimately, merchants will play a critical role in the success or demise of each mobile wallet solution. Forging mutually beneficial relationships with merchants, navigating the various merchant requirements including point-of-sale technology preferences and negotiating pricing agreements can be a daunting, if not impossible,  feat for an individual credit union to accomplish, regardless of its size or resources.

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  • NAFCU – Strategic Growth Conference

The Financial Brand

According to data from FindABetterBank, consumers who are specifically interested in mobile banking services are very likely to believe they’ll bank 100% virtually in the future. While fewer banking “traditionalists” (those using checks, for instance) see an all-digital future, it’s still a healthy percentage — nearly two-thirds.

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  • Security and BYOD policy management key barriers to corporate mobile banking

Finextra

Corporate treasurers cite security challenges and bring-your-own-device business policies as the key obstacles to wider uptake of mobile banking platforms for treasury activities. Of 135 finance and treasury professionals collared by Capital One at the annual Association for Finance Professionals (AFP) gathering, barely one-in-three used a corporate mobile banking platform. Security challenges with sensitive corporate data was cited as the primary barrier to widespread adoption (66%), followed by obstacles for companies figuring out their BYOD policies (24%).

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  • Banks Face Losing To Google And Amazon, While Shortchanging Corporate Clients

Forbes.com

Two strong critiques of banking in the Financial Times today. Francisco Gonzalez, CEO of BBVA bank, writes that banks can expect competition from Amazon, Google and Facebook. BBVA is based in Spain but owns BBVA Compass in the U.S. Goonzalez writes that technology has transformed many businesses — next in line is banking. That may come as something of a shock to bankers who think they are on the cutting edge, but Gonzalez points to competitors in providing financial services including PayPal, Square iZettle, SumUp and Dwolla.

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  • Email Design: Discover Card’s “Statement Available” Message

Net Banker

Most statement alerts are simple one liners asking the user to do all the work: login, find the right tab, click on the correct button, and so on. Discover, on the other hand, positions key summary information right within the body of the email: statement end date, statement balance, credit available, minimum payment due, and due date. The company includes a button to view the statement at the top, but somewhat buries the payment link near the bottom. Analysis: This is one of the better (maybe best) statement-available message I get from the major brands. But it could still be improved

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Digital Money, Mobile Wallets & Latin America

In our world of 100%+ mobile penetration, companies in Latin America will soon need to think like their next wave of prospective customers, most of whom are unbanked. This means understanding their lifestyles, habits and needs in order to decide how to best generate value.

Similarly, recent global and regional corporate announcements regarding digital money and mobile wallets targeting Latin America’s unbanked consumers have casual and close followers wondering what this means for the region.

What exactly are they talking about?

Simply put, mobile wallets aim to create a phone-based equivalent of a physical wallet – a cloud and/or SIM-based collection of personal identification, financial and non-financial account information. The different money, payments and banking offerings refer mostly to the ability to purchase and perform other value-based transactions with a mobile handset.

In Latin America, these details are very important given the fact that more than 90% of mobile users are on prepaid plans – many of them unbanked – and use devices with varying features and capabilities.

Who are the key players?

We’ve seen the arrival of several initiatives to improve Latin America’s mobile payment transactions and incorporate unbanked users. These include: banks, telcos, retail chains, global acquiring and acceptance networks and specialized entrepreneurs who have launched initiatives in countries such as Mexico, Argentina, Venezuela, Peru, the Dominican Republic and Haiti.

What business are they after?

What each of them shares is a common motivation: to capture the favor of the increasingly mobile-dependent user, most of whom are unbanked, and hence their relationships, transactions, and related data.

Given the way the mobile phone has gradually replaced or replicated nearly every item on our nightstands (alarm clock), desks (email, browser), briefcases, purses and pockets (agenda, reading material, games, camera) and even our televisions, it stands to reason that the wallet would be the next object of interest.

What does this world look like?

Look inside a typical Latin American consumer’s wallet today and imagine what their future mobile wallet might look like…

  • Better security: For the unbanked consumer, electronic money will continue to be more secure than carrying physical cash.
  • More local apps: User-friendly apps are great for simplifying the delivery of information and services.
  • Virtual labor marketplace: From street vendors to self-employed, blue-collar laborers, their services can be broadcast and found.
  • Bill-payment simplification: Paper bills, long lines and late bills are avoided – a win-win for both payer and provider.
  • More effective promotions: Mobile phones enable product promotions to bypass the challenge of a legally unrecognized residence.
  • Electronic documentation: From transit passes to IDs to receipts, all documents typically carried by an unbanked consumer will be provided electronically.

What does the future hold?

The ultimate goal of this mobile era should be the creation of a payments ecosystem – where open and accessible systems, once set in motion, flourish by attracting a diversity of interconnected and interacting players. There are several regional challenges to overcome, but it can be done.

Thankfully, the wireless industry has given us some concrete examples like GSM, Bluetooth and other consortium-led efforts. If we continue at the current pace, it could take our region 15 years and millions of dollars wasted in isolated iterations. However, if done properly, 15 years can be cut to five. 2018 sounds pretty good to me.

 

Anabel Pérez is President & CEO of NovoPayment, the leading payments technology services company in Latin America, providing prepaid/stored-value program design, implementation and Platform as a Service (PaaS). 

What We’re Reading: Online Banking, Mobile Wallets, Retail Banking

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.

  • Why Cost-Conscious Bankers Should Cheer an Appless Future

American Banker

Attention cost-conscious bankers: tiny University of Wisconsin Credit Union may have begun cutting a path to building mobile apps at a fraction of today’s typical cost. In what appear to the first such move of its kind, the $1.6 billion-asset outfit has done so by designing a mobile bill-pay function for an off-the-shelf web browser. The upside of this approach is that creating smartphone and tablet software is expensive, especially when it involves developing multiple versions for multiple types of devices. At most banks, that involves building apps for Android, Apple and even the fast-fading BlackBerry.

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  • Is Online Banking Dead?

Celent Banking Blog

Banks can’t afford to drop the online banking ball. There are several key reasons for this: The online channel is still the most popular with consumers of all ages. The results of our most recent consumer survey (September 2013) are quite clear.  While mobile is certainly growing in importance and popularity, online still rules. Most tablet banking apps are pitiful. Kudos to the banks that have ventured down this road as it’s an interesting and exciting space. However, we recently reviewed the tablet apps of the top banks in the US, and most can’t compete with the features, functionality or experience of classic online banking. I recently spoke with a bank that had just finished doing some customer research to evaluate how customers were using their tablet app.

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  • A Tale Of Two Futuristic ATMs

Credit Union Journal

As Fexco and First Data demonstrated their futuristic ATM concept, which allows consumers to use a mobile phone instead of a card for access, they emphasized that the CU or bank is at the heart of the offering – everything about the technology could be changed to the bank’s whim. And as Lamassu took the same stage to pitch a very similar device, which reads from a consumer’s mobile phone to access a Bitcoin wallet, a very different message came across: “Our machines are, in a sense, bankless ATMs,” said Lamassu co-founder Zach Harvey. Each company presented its product during the Payments Innovation Day session of PaymentsSource’s ATM, Debit and Prepaid Forum here.

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  • With IPO In Sight, Lending Club Looks To Upend Banking Industry

Forbes.com

Laplanche is recounting the five-day Transpacific yacht race in July from Los Angeles to Hawaii on the company-sponsored yacht. His team won the multihull division race with the second-fastest time ever. The most harrowing part of the race was when the vessel was struck by what looked like a telephone pole, seriously damaging the center board of the boat. But Laplanche recalls the incident like it was a walk to the corner store. Laplanche is no stranger to sailing; he started sailing at age 10, began sailing competitively at 14, and later won two French sailing championships.

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  • PayPal Nudges out Visa in Javelin “TIP” Mobile Wallet Rankings

Javelin Strategy & Research Blog

Who is winning the mobile wallet race? The answer might surprise you. PayPal moved up strongly in Javelin’s TIP (Trust-Innovation-Privacy) consumer rankings to grab the lead from Visa this year. PayPal is the most trusted brand among consumers compared to Apple, Google, Amazon and Facebook, and compared to the top banks, major payment networks and largest mobile network operators.

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  • Three Essential Priorities for the Retail Banking IT Roadmap of 2014

Tower Group Blog

As we move into the Q4 2013, retail banking IT executives should consider three crucial priorities as they begin to assemble an IT investment roadmap for 2014. Optimize the IT Delivery Model: The pace of technology development and acquisition continues to accelerate, amplifying the difficulty of integrating new technology with outdated legacy systems. Target Channel Investments to Maximize Customer Engagement: Customers are rapidly migrating to digital channels, performing an increasing proportion of banking tasks through online and mobile channels rather than through the branch or call center. Identify the ROI of Investments in Mobility: Many banks are making significant investments in mobile technology despite a lack of clarity about mobility’s impact on loyalty or revenue.

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What We’re Reading: Digital Wallet, Social Media and Data

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.

  • Digital Wallet Race Is Far From Over

American Banker

Payments players with digital wallet aspirations — including Visa, MasterCard, Google, PayPal, Apple and Isis — are all vying for customers’ virtual pocket books in a race to truly electronic transactions. Yet none have had much luck, so far. There have been delays in launches (e.g. Isis’s delays on launching in its two pilot cities); changes in the way at least one major, digital wallet innovator processes its transactions (think: Google Wallet); and, most importantly, a lack of features appealing enough to spur widespread adoption. “Mobile wallets have been around for a while, and even for us, in the industry, we are only just starting to adopt these technologies,” says Philip Philliou, a payments consultant. “I don’t think anyone is far ahead in terms of disruption. We are still early on.”

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  • 3 Things Banks Must Do to Survive the Mobile Payments Jungle

American Banker

The mobile wallet market appears to be wide open to new entrants, with banks having a slight edge. While more than 20 percent of U.S. online consumers prefer to use their checking account for digital wallet services, 17 percent prefer PayPal, according to Gartner. That gap could quickly close in the next few years. To survive in the mobile payments landscape, banks need to do three things: Integrate mobile into existing offerings. Rebuild loyalty. Banks need to leverage emerging customer analytics techniques, coupled with geo-location services through mobile devices in order to make relevant offers at the right time. Redefine success. It’s no longer sufficient for banks to measure success by counting the number of mobile payments and online users.

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  • All Those New Channels Affecting Accuracy of Data

Credit Union Journal

Credit unions face many challenges as channels diversify and members demand digital options. According to a recent Experian QAS survey, financial institutions are operating through an average of four different channels, the most popular being the organization’s website. While these new channels are exciting endeavors, many credit unions are experiencing problems with collecting accurate contact data. According to that same data, 91% of financial institutions suspect their customer/member and prospect data might be inaccurate in some way. On average, respondents think that as much as 18% of their data might be inaccurate. Even worse, another 27% of respondents are unsure how much of their data is inaccurate.

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  • Introducing The Social Media Power 100 Rankings For Banks And Credit Unions

The Financial Brand

The Power 100 is an interactive list of retail banks and credit unions who have achieved the most social media traction. Components of the Power 100 score include Facebook ‘Likes,’ Facebook engagement rate, Twitter followers, tweets sent, YouTube views and YouTube subscribers. The top 15 institutions in the banking and credit union category are as follows: Chase, Capital One, ICICI Bank, E*TRADE Bank, Bank of American, Axis Bank, GT Bank, Wells Fargo, Citi, Commonwealth, FNB, Navy FCU, Bank of Nova Scotia, NAB and TD Canada.

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  • DDoS: The Worst Case Scenario

Javelin Strategy & Research Blog

Since September of last year, Izz ad-Din al-Qassam has engaged in cyberwarfare against U.S. financial institutions, and it is a war with which they have had a great deal of apparent success if we believe that their goal was to inconvenience U.S. bank customers by rendering online banking portals inaccessible for a number of hours at a time. More than information sharing on best practices is needed – financial institutions should pool resources to ensure the availability of excess network capacity, and network operators must be involved in the effort to identify infected servers and to subsequently stop the malicious traffic its source.  And while intelligence support is a good start, the Federal government must identify those responsible and cripple their ability to continue this campaign.

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  • Facebook tries to get more in your face

Los Angeles Times

It’s hard not to detect a whiff of desperation in Facebook’s new please-don’t-go interface, which is determined to keep people within the social network as long as it can. Facebook Home is intended to dominate Android smartphones, making Facebook your first and last port of call as you traverse the wireless wonderland. It will keep Facebook features front and center, rather than require users to use an app.

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  • Credit Union Takes an Early Lead with E-Signatures

SYS CON Media Blog

Aaron Pugh recently published a story on credit unions using e-signatures on CreditUnions.com. He writes that only eight and a half percent of credit unions larger than $20 million in assets currently offer e-signatures to their customers even though the market for e-signatures as a whole has shot up 48 percent from 2011 to 2012 according to Gartner Research. Among the early adopters in the industry is the Teachers Credit Union in Ontario, Canada. The member-owned financial organization serves employees of education and their families throughout the province. The 15,000 members conduct business through multiple branch locations, ATMs, online and via mobile banking.

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What We’re Reading: Privacy Rules, Mobile Wallets and Banking Acquisitions

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.

  • Four Ways the FTC’s New Privacy Rules Affect Mobile Banking Apps

American Banker

The Federal Trade Commission has been toughening its stance on consumer privacy protection, and this directly affects the mobile applications banks offer their customers. On Saturday the agency issued a report, Mobile Privacy Disclosures: Building Trust Through Transparency, that offers advice on keeping using consumers’ data private. It offers recommendations to four sets of stakeholders: operating system providers (like Apple and Google), app providers, advertising networks, and app developer trade associations. Banks that provide mobile banking, PFM, trading or wallet apps fit in the app provider category.

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  • Bank Tech Vendor Shakeup Continues: FIS to Acquire mFoundry

Bank Systems & Technology

The consolidation trend in the bank technology solution provider space continues to accelerate, with news today that Jacksonville, Fla.-based FIS has signed a definitive agreement to acquire the remaining 78% interest in mobile banking and payment solutions provider mFoundry. Previous to this transaction, FIS held a 22% interest in mFoundry (Larkspur, Calif.), which was founded in 2004 and now serves more than 850 clients in financial services and retailing. According to a statement from FIS, the addition of mFoundry “enables FIS to leverage its technology assets across a broader client base.

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  • The Latest Trends That Will Redefine Online Banking

Business 2 Community

Online banking has had a tremendous effect on banks because people can now complete financial transactions by visiting secure websites that are maintained by brick-and-mortar or virtual banks, credit unions or brokerage houses. While this is convenient consumers are also concerned that their financial information may be accessed by hackers via the Internet, and banks are intent on providing security for their customers and keeping up with the latest technological trends at the same time.

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  • ‘Me Too’ Rules in Mobile Banking

Credit Union Times

Anthony Genovese, a vice president at payments company Compass Plus stated that central advice from Compass Plus to credit unions is to “focus on the importance of the mobile channel” and to take steps to make use of uniquely mobile features such as built-in GPS (the phone knows where it is), a camera, and in an increasing number of phones NFC, the near-field communications payments chip. Genovese added that “the stickiness of mobile user is questionable. Financial institutions aren’t offering many features that compel users to keep using the channel.”

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  • Apple Patent Reveals Peer-To-Peer Mobile Banking Idea, Using iTunes As Bank

Fast Company

Fast Company checks in with last year’s Most Innovative Companies to see how their big ideas fared in 2012–and how they’ll play out in 2013 and beyond. Apple has just revealed one of its more out-there ideas in a patent application titled Ad-Hoc Cash Dispensing Network. The proposed patent, in short, is a peer-to-peer lending concept that would use iTunes accounts as a connection to let people loan or borrow small amounts of money to each other. The patent, which was reported on by the Unwired View website, shows just how far outside the box the thinking goes over at Cupertino.

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  • Will You Be Ready When Mobile Wallets Turn Banking Upside Down?

The Financial Brand

Financial marketers had better wrap their heads around the impending mobile-dominant landscape, and fast. Mobile devices will soon be the central tool consumers use to manage banking relationships. When consumers start embracing mobile wallets and making digital transactions, banking will never be the same again. Around every 10 or 20 years, something big comes along that completely transforms the world of banking — ATMs, debit cards, the internet. Unquestionably, the next big thing to rock banking will be mobile wallets.

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  • The Forgotten Secrets Of The Enterprise Giants: Virality, Word Of Mouth, And Other Radical Experiments

TechCrunch

Today, Intuit is generally recognized as the only party to “own” the accounting channel, but they came at it via a totally radical approach that its competitors seem to have forgotten (which is probably why Intuit has had such firm footing for decades, despite legions of challengers). Don’t be afraid of failure. Be afraid of not trying. Salesforce, Concur and Intuit weren’t, and now we can’t imagine a world without them.

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  • Bank of America’s online banking crashes Angry customers vent frustrations on Twitter.

USA Today

Bank of America says its online banking website crashed Friday, leaving customers unable to access their accounts. Starting late Friday morning, customers trying to log on saw a message that the site was “temporarily unavailable.” The lender announced a few hours later that the problems had been resolved, but not before it endured a fire storm of complaints and criticism. Angry Bank of America customers took to Twitter to say that they were left frustrated, trying to do their banking on the first day of the month.

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  • Identity: The New Security Perimeter

Wired

Traditional security perimeters encircling corporate networks no longer meet the needs of today’s enterprise. As businesses move to cloud computing, employees are able to gain access to their work apps and corporate networks through almost any internet-connected device. The breadth of access, and choice of devices, breaks down traditional security boundaries and forces IT to seek a new security model that can deal with this anywhere reality. Security, therefore, must evolve from an on-site protection model and adapt to securely provide access to off-premises devices.

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Going Luddite on Mobile

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.

New Technologies Are Coming for Unbanked, Underbanked

*This post originally appeared on MyBankTracker

In the past year, countless prepaid cards have flooded the nation to target the large portion of the American population that is either unbanked or underbanked. Acknowledging that the market for these alternative financial products is rapidly growing, more tech companies are catering to this group of consumers.

According to a recent survey by the FDIC, in 2011, 8.2 percent of U.S. households do not have bank accounts, up from 7.6 percent in 2009. And 20.1 percent of U.S. households have bank accounts, but rely on alternative channels for financial services (e.g., check-cashing, payday loans and money orders), up from 18.2 percent in 2009.

Even traditional banks have jumped on the bandwagon to compete against non-bank prepaid-card companies and get a piece of the prepaid-card market.

Last fall, Regions Bank started rolling out asuite of products and services that included a prepaid card and check-cashing and Western Union services. In July, Chase, the largest bank in the country, launched the Liquid prepaid card that does almost everything that a regular Chase checking account can do.

“As banks have steadily inflated the cost of banking, more and more depositors are seeking substitutes for bank accounts with escalating costs, high minimum balances and surprise fees,” said Jim Wells, president of Wellspring Consulting, a firm that specializes in solutions for the unbanked and underbanked.

But, with the proliferation of financial technology, the focus is shifting to serving the unbanked and underbanked through mobile devices.

Last week, at a Finovate conference, two companies demonstrated their versions of a mobile wallet for the unbanked or underbanked consumer.

The CAT (Cash and Transact) mobile wallet, by Emida, is an app that is based solely on the consumer’s smartphone. Through participating retailers, users can refill their CAT accounts with cash (for a convenience fee of $1.50). Then, they can use the funds to pay for purchases through the app.

The Flip mobile wallet, from PreCash, is an app that allows users to perform instant mobile check deposit and make expedited bill payments — two services that were never before available on a prepaid card account.

“Although these mobile-enabled, prepaid card-based accounts are attractive to far more than just low-income consumers, one key to success will be in making the services available via even the simplest of mobile devices,” said Wells.

In countries where financial institutions are hard to come by, mobile devices are the preferred channel for financial transactions. For example, more than 17 million mobile subscribers in Kenya use a mobile-phone-based money transfer service called M-Pesa, which enables users to deposit and withdraw money, pay bills, buy phone minutes and send money to bank accounts or other users.

In the U.S., the decreasing cost of smartphones may make it seem like everyone has a smartphone — but non-smartphones are still the most common mobile devices among the low-income population.

According to the Federal Reserve, 64 percent of the unbanked have access to a mobile phone (18 percent have a smartphone) while 91 percent of the underbanked have access to a mobile phone (57 percent have a smartphone).

Regardless of the types of mobile devices, the demand for alternative financial products and services is there.

And, history tells us that unbanked and underbanked consumers could be the users of the next wave of financial innovation.

In last year’s fall Finovate conference, card-linked offers made regular appearances on stage. Since then, card-linked offers became more available to bank customers. Bank of America, Capital One, American Express and many other financial institutions began providing card-linked deals.

Considering that the conference offers a good idea of what products and services we’ll see in the near future, it wouldn’t be a surprise to find that, by this time next year, there are more prepaid card accounts and other financial services that live on mobile devices.

 What are you offering your customers? Let us know in the comments below!

What We’re Reading: NACHA Round-up, Social Media and Mobile Wallets

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.

  • Big Check Volumes Aren’t Just for Big Banks, a Small Bank Says

American Banker

Business clients that receive thousands of checks per month typically can’t get automated bulk check processing services from a small bank. And if the services matter to those clients, the small banks lose their business to larger rivals. But Farmers & Merchants Bank, a $4.7 billion-asset bank based in Long Beach, Calif., is launching an image cash letter service. In doing so, the bank is demonstrating an emerging option for smaller banks to deepen relationships with business clients, speed processing and take greater control over the quality of check images that are prepared for deposit.

Read more

  • Nacha Payments 2012 Round-up

Celent Banking Blog

Last week he was in Baltimore for the Nacha Payments annual event, a regular fixture on his calendar. He just wanted to share some impressions, some of his own, others themes from the many conversations he had. Mobile loomed large on the agenda. It’s not an area that he specifically focuses on but he was struck by the diverging opinions. On one hand, some banks were saying that those customers who used the mobile service were the most profitable. However, others also said they didn’t know how or when they’d make money from mobile.

Read more

  • Why Smaller Banks Should offer Image Cash Letter Deposit Services

Celent Banking Blog

Farmers & Merchants Bank, a $2 billion-asset bank based in Long Beach, Calif., is launching an image cash letter service. The accompanying press release caught the eye of American Banker resulting in a story today on the topic, Big Check Volumes Aren’t Just for Big Banks, a Small Bank Says, written by John Adams. In a previous post, he commented on why wholesale lockbox belongs in the headlines even though it has been around as a staple treasury management offering for five decades. The post emphasized that after all these years, the market opportunity for wholesale lockbox services remains significant.

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  • Social Media Needs ‘Socialnomics’

Credit Union Journal

Credit unions would be well-advised to take a course in “Socialnomics,” according to one person. Socialnomics is the intersection of social media and word of mouth, creating “world of mouth” advertising, according to Erik Qualman, an expert on social media and author of a book with that name. “Socialnomics is word of mouth on digital steroids,” he said, noting many consumers are moving past what had been considered a big deal just a few years ago-doing research online at home before going out to shop. “People are now using their smart phones to scan QR codes in stores, which not only lets them comparison shop, it lets them get recommendations on the product from their Facebook friends.”

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  • Mobile Wallets Have Uphill Climb to Consumer Acceptance

eMarketer

Will mobile wallets take off in the US? If marketers, carriers and other service providers expect technology that allows mobile phones to act as credit or debit cards to gain wide acceptance, they have a lot of work to do to convince consumers to adopt. According to March 2012 panel-based research by marketing solutions agency Catapult, just one-quarter of US consumers were at least somewhat interested in using a mobile wallet for in-store purchases. In contrast, 58% were uninterested—including 41% who reported a complete lack of interest. Correspondingly, in January 2012, market research firm TNS found that 60% of US mobile phone users were not interested in mobile wallet technology.

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  • Infographic: The Digital Lives of American Moms

Nielson Wire

Moms are at the center of their family’s offline life, so it’s little surprise that they’re also at the center of many of the biggest trends online as well. Whether to look up the latest product reviews or to connect with friends, families, and even brands through social networks, American moms are particularly active and influential online. American moms use social media frequently, with nearly three out of four moms visiting Facebook during March 2012. When using social media, moms are 38 percent more likely to become a fan of or follow a brand online, and moms who blog are more than twice as likely to follow brands and celebrities compared to the online average.Moms visit blogs more often, and are 27 percent more likely to visit Blogger and 26 percent more likely to visit WordPress.com than the general online population.

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  • Mobile Payments Expected To Surge (INFOGRAPHIC)

Huffington Post

Mobile payments are expected to hit 21.3 percent in 2012. Mobile payment technology is making it unnecessary to carry a wallet or maintain a bulky cash register at your checkout counter. By using devices and apps like Square and Google Wallet, small businesses are getting paid faster and customers are making more reliable purchases. Data from Deloitte show that mobile payment usage is expected to spring from 6.8 percent in 2009 to a predicted 21.3 percent in 2012.

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  • New free website e-mails you when you’re going over budget

Sun Sentinel

Plantation-based PowerWallet.com helps people manage their finances, sending reminders to pay bills — from credit cards to monthly cable charges — and alerting consumers when they’re near their budget limits. “It keeps your spending in control,” said PowerWallet co-creator and president, Bob Sullivan. “We looked at the market about a year ago and found people were having trouble with their finances.” So Sullivan helped set up the secure website that allows people to safely list their finances online, including their investments, bank accounts and bills.

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