Tax Time & Financial Institutions: Data from Digital Insight

The tax filing deadline is rapidly approaching, and for many consumers that means looking through last year’s financial records for various items like charitable contributions or tax deductions. Digital Insight, which offers TurboTax ® for Online Banking to its financial institution (FI) customers, took a deep dive into how consumers are using tax software and how it can benefit FI’s. Through tax exit studies and surveys, Digital Insight was able to see how the tax preparation software helps FI’s with customer engagement and retention. Below are key findings from the study, and you can view a more in-depth analysis here.

And, you can view previous Digital Insight studies on mobile banking behavior and online banking. 

Intuit, TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties’ trademarks or service marks are the property of their respective owners.

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What We’re Reading: BAI Retail Delivery, Banking Trends, Innovation

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom.

 

  • The Case for Keeping Mobile and Online Banking Separate

American Banker

Some people expect to be mobile-first customers.  To date, however, many banks require customers to first enroll in online banking – partly due to security and compliance concerns, partly due to integration challenges. Even so, some banks are separating mobile from online.  U.S. Bank, for one, already lets people enroll in mobile directly and activate some services without needing additional online setup. (The bank also offers imaging technologies that simplify the deposit and payment process, including mobile photo bill payment).  “Experience is king,” said Chris Peper, U.S. Bank’s vice president of mobile channel management.

Read more 

 

Bank Systems & Technology 

  • Mobile Banking Best Practices Highlighted at BAI

Several leading banks shared some of their experiences, challenges and lessons learned at BAI Retail Delivery 2013 today at a panel discussion titled “Mobile Influencers: Lessons Learned, Mobile Today, Mobile Tomorrow.” Some of the key themes that emerged from the discussion included the evolving relationship between online and mobile banking, the growing value of mobile check deposit and the use of mobile coupons and shopping offers.

Read more 

 

  • Banks Should Act Like Startups When it Comes to Innovation

Bank Systems & Technology

A session at BAI Retail Delivery 2013 emphasized creating new ideas and having deep customer empathy. When it comes to pursuing innovation, banks need to adopt the mentality of a startup. That was the theme of a session titled “Creating an Innovation Framework that Works” at BAI Retail Delivery 2013 featuring Nicole Lorch, SVP Retail Banking at First Internet Bank and Jeff Lauterer, Leader, Product Operations for online banking services provider Digital Insight.  According to Lauterer, innovation occurs in any industry not just by creating new products, but by tweaking existing products in such a way that demand increases so much a company needs to hire extra employees just to handle that product. He cited Taco Bell’s “Taco Loco” — a recent addition to the fast food chain’s menu featuring a Dorito as a taco shell — as one prime example of this. “Innovation can happen anywhere,” Lauterer noted. “The key is bringing in a culture of innovation that is sustainable and continuous.”

Read more 

 

  • Mobile banking without a phone: Here comes the bank van

Christian Science Monitor

With the rise of tech-driven banking in developing nations, why is this rubber-to-the-road method of reaching customers gaining traction? In Uganda, many of the rural unbanked still prefer the physical presence of a banker, even though they have access to the technology for mobile banking. “The market reality is that people want bank services closer,” according to Tonny Miiro, managing director of Uptime Solutions Uganda, one of the banks in Uganda that is using vans to reach more far-flung residents. “That is what we are doing. It is important that government comes up with more policies that call for more inclusive bank services provided by financial institutions, as there is demand.”

Read more

 

  • Google Data Reveals 2013 Banking Trends

The Financial Brand

Seven years ago, practically no one searched Google for anything related to mobile banking. And then… the iPhone came along. Now consumers see smartphones as an integral part of the financial toolbox. Consumer interest in mobile banking is climbing at a sustained 30° angle, with no signs of letting up.

Read more 

 

  • Are mobile wallets being made by the wrong people?

Finextra

The leaders in mobile wallet technology? Undoubtedly retailers. Starbucks and McDonald’s are already building these wallets in response to customer demand.  But with mobile wallet use predicted to rise in 2014, should banks or mobile operators—who are better positioned to offer levels of security customers expect—be building them instead? The challenge is that the business case for building a mobile wallet shows little direct financial benefit on its own to a bank or MNO (mobile network operator), while a retailer can leverage the wallet to drive loyalty.  But there’s actually no reason why banks should ignore the potential gains that will come from customer spending data and loyalty programmes that can be launched based on this information.

Read more 

 

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.

Read more 

 

  • 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.

Read more

 

  • 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.

Read more

 

  • 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.

Read more

 

  • 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.

Read more 

 

  • 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.

Read more 

What We’re Reading: Government Shutdown, Vendor Management, Cloud

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.

  • Banks Vow to Be Flexible with Customers Affected by Shutdown

American Banker

Banks are stepping up to meet the needs of customers who could miss their next paycheck or two due to the government shutdown. Several banks in the Washington, D.C., region say they are urging customers affected by the shutdown to contact their local branches if they are concerned about meeting loan payments or getting socked with hefty fees for overdrawing their accounts. Some, including Capital One Financial (COF) in McLean, Va., are actively promoting assistance programs while others say they will handle situations case by case.

Read more 

  • Bank of America Launches Next Gen Banking Centers

Bank Systems & Technology

Bank of America has announced the launch of five additional “express banking centers” dedicated to offering self-service technology to handle services and common transactions in Boston, Charlotte and New York City.

Read more 

  • MRDC Fraud Alert: Double-Triple Dipping

Credit Union Times

The headline on the story at an Oklahoma television station’s website said it plainly: “Mobile Banking Used To Steal Thousands From OKC Business.” The story elaborated that Paris Limo in Oklahoma City had been looted of some $15,000 by an employee who apparently made it a habit to deposit the same paycheck in multiple checking accounts, effectively doubling or tripling his income. Jimmy Paris, the company owner, acknowledged that nobody reconciled the payroll account on a monthly basis. All of which raises the question: how widespread is double dipping with mobile remote deposit capture? Alan Bernstein, president of Vertifi Software, a CUSO that offers MRDC to hundreds of credit unions, said, “This is totally contrary to what we have experienced in the three years we have provided MRDC.”

Read more 

  • The Morph from Vendor Management to Vendor Performance Management

Gonzo Banker

These days, when we are asked to work with any FI on looking at alternatives to systems, it very seldom is for quantitative reasons – vendor stability, financials, etc. At the end of the day, almost 100% of the time, it is because the FI does not feel that the vendor met commitments and managed the relationship well. And, when the incumbent vendor bids to keep the business, conversations always center on what went wrong with the relationship and how the vendor will promise to fix it. At that point, it’s usually too late for the promises to be credible.

Read more 

  • Gartner: 50% Of Enterprises Use Hybrid Cloud By 2017

InformationWeek

Actual hybrid cloud computing deployments still “rare,” Gartner says, tempering optimism about future adoption rates. Gartner predicts that almost half of large enterprises will be engaged in a combined, public/private cloud operation, often described as “hybrid” cloud computing, four years from now. Gartner analyst Thomas Bittman makes the projection in an Oct. 1 report, “Private Cloud Matures, Hybrid Cloud Is Next.” The report implicitly assumes that the opposition to public cloud, which looms large in many enterprise IT surveys, will fall away in the near future, at least for limited hybrid operations.

Read more 

  • Online Bank Customers Are Surprisingly Short-Tempered

The Street

42% of digital banking users will leave a website or mobile site after experiencing poor customer service. Survey respondents may not be coming entirely clean with study researchers, at least when it comes to showing patience online. “Of all of the survey questions we posed to consumers in this study, the answer that was most surprising is that 22% of consumers are willing to wait up to three seconds for pages and images to load on a bank’s website or mobile site,” says Jared Polidoro, vice president of U.S. client services at Maxymiser. “But what they were telling us doesn’t match their actual behavior.”

Read more 

  • Android biometric sensors on way ; Tech alliance pursues standard

USA Today

Michael Barrett cringes every time he has to enter a password on his smartphone. But six months from now, Barrett says, he will be able to choose from the latest Android models that will come equipped with a biometric sensor capable of letting him swipe his fingerprint to access a wide range of his online accounts. That’s the scenario being proactively pursued by the FIDO Alliance, a group of 48 tech companies, led by PayPal and Lenovo, hustling to implement a milestone technical standard. “The intention of FIDO is absolutely that it will allow consumers to have access to mobile services that they can use with very low friction, while keeping good security,” says Barrett, president of the FIDO Alliance. “That’s explicitly what we want to build.”

Read more 

 

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

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom.

 

  •  Use of Overdrafts Hits 14-Year Low: Report 

American Banker 

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

Read more

  • 5 Ways Mobile Banking Is Evolving: Finovate

Bank Systems & Technology 

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

Read more

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

BusinessWeek

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

Read more 

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

Celent Banking Blog

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

Read more 

  • A Mobile Wallet for the Underbanked

Fast Company

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

Read more 

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

 Fierce Mobile Content

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

Read more

Online Banking Engagement: Data from Digital Insight

Digital Insight has been conducting a comprehensive and ongoing study of financial institution customers. From these studies, the company has been able to provide a deeper view of banking customer behavior across several categories, such as mobile and online banking. Earlier this year, we examined mobile banking behavior and now we are taking a look at how online banking is an integral engagement tool for financial institutions. Below are key findings from Digital Insight’s online banking study, and you can view a more in-depth analysis here.

As we continue this series of data, we will be publishing blog posts on additional topics on Banking.com. *For information on the on the methodology used for the study you can download the PDF

Mobile Only Banking: The Pros & Cons for Financial Institutions

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.

Woman Holding Phone 2

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, a Digital Insight 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 Digital Insight 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 Digital Insight 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] Digital Insight Internal Internet Banking/Mobile study of 7 Digital Insight 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 Digital Insight 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 Digital Insight financial institution client, November 2012

The New Normal

One reason the technology industry is so unique is that it has—or more accurately, successful companies have—developed the art of self-cannibalization. It’s a neat trick, and everyone can learn from it.

As technology consumers, we’ve come to expect that every product will invariably get ‘better-faster-smaller-cheaper.’ For their part, most technology vendors know that if they don’t deliver advances at a lower cost, someone else will. As a result, companies build around a business model that routinely cuts into their own profit margins. It’s counter-intuitive yet vital.

It’s not necessarily a discipline that travels well across industries, although there are exceptions (anyone remember how much flat-screen TVs used to cost?). But elsewhere, the price tag for everything from cars to houses continues to rise. With technology, it almost always goes the other way.

The banking industry seems to be in the process of learning these lessons. At a number of industry events recently, leading lights from the world of financial services have gone public with the need to change some fundamental operating assumptions. At its heart is the vexing question the technology industry has long confronted: Can customers benefit only at the expense of the vendor?

This is the new normal, and everyone needs to change accordingly.

To be clear, the banking industry does face major challenges. While overall economic belt-tightening surely takes its toll, governmental pressure hasn’t helped either. For example, regulations that place curbs on debit card and overdraft fees have hit the industry hard; banks could collectively lose revenue in the $12 billion range.

But the problems are even more systemic. The new normal is worlds removed from the past—customers now routinely expect more from less, and they have more options than ever before. Even a question as basic as branch banking is now the source of constant headaches. On the retail side, this model has been the cornerstone of virtually all market-facing initiatives. But as customers do more online, this model has been thrown into turmoil. Today, every institution must conduct extensive cost-benefit analyses on which branches to close and which, if any, to open. Of course, this affects everything from staffing to capital expenditures on real estate, which in turn affects the bottom line.

In the same vein, the plethora of mobile apps available from every financial institution means that everyday processes have been completely transformed. For example, it’s estimated that, rather than walking up to a teller’s window or even stopping by the ATM, customers now deposit checks via their mobile devices 10,000 times a day. And if that’s the case now, imagine what the numbers will be in five years. For the record, as related by William S. Demchak, President of the PNC Financial Services Group, this change in user practices customer saves $3.88 per transaction. That’s money the bank gets to keep.

So new technologies and changing user habits benefit the customer and benefit the bank—everyone’s happy, right? Sure, but this is why additional and alternative revenue models are so important. Key question: if customers no longer have to go to the bank or even an ATM to deposit a check, would they be willing to pay a very small fee for the convenience?

In other words, does technology enable only savings or additional revenue?

This is why the lessons to be learned from the technology industry are so important. It has weaned the market to want new products—the latest smartphones, software upgrades, cool accessories—regardless of the validity of the model they already have. There are plenty of Apple iPhone 4s to be had for very little money, but everyone wants the iPhone 5. And that’s just one reason why Apple recently had the highest market cap of any U.S. company in history (though it’s fluctuated since).

Not every company can be the paragon of innovation that Apple is, of course, and financial services is a very different industry. But as we’ve covered on this blog before, the former has benefited greatly from disruption and innovation, leading to an endless supply of emerging market leaders, while banking seems to have the same players and same business models year after year.

Banking’s new normal brings not just disruption but opportunity. There are new markets, new capabilities, new technologies and new customers. All of that should surely add up to some new revenue.

What We’re Reading: Continuity, Mobile Usage and Mobile Commerce

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.

  • Bankers’ Next Storm Challenge: Continuity

American Banker

As Hurricane Sandy starts to make its way inland, bankers from Virginia to Maine have shifted their efforts away from emergency preparedness to focus on post-storm crisis management. The decision to open or close branches took place over the weekend, along with choices on staffing data centers and contacting employees. A number of banks also used social media to inform customers how to set up and use online banking should their branches remain shuttered for several days. Bankers are looking ahead at the coming week with a realization that many of the customers, and some of their branches, could be knocked out of commission for the foreseeable future. The storm’s timing was particularly taxing for banks that process clients’ payroll payments, making that a top priority for some management teams.

Read more

  • Is the ‘Branch of the Future’ Here?

GonzoBanker

The “Social Branch”. The social branch is the model most people immediately associate with the “branch of the future” concept. Queue the tranquil lobby music! This is the open, inviting atmosphere with amenities so abundant that customers will come to hang out, drink free coffee, receive amazing personal service from new account reps floating about the lobby with tablets in hand, and get the fastest service available by tellers perched proudly behind their teller pods. However, for the most part, organizations implementing this concept as a tactic to drive more customers through the door have struggled to justify the effort spent. The social branch is likely to be a hit with FIs in urban markets that have a strong brand and a level of customer loyalty high enough to drive feet through the door for more than just routine transactions. Rural markets will be hard pressed to get this to succeed.

Read more

  • Checking Balances, Viewing Transactions Are Top Mobile Usages, Study Finds

Bank Systems & Technology

The study, conducted for Virtual Hold Technology by The Adcom Group, also found consumers grow increasingly frustrated when problems arise with mobile apps that prevent them from completing a task. Checking on account balances and viewing transaction histories are the most common tasks customers perform in financial mobile apps, according to a study from Akron, Ohio-based Virtual Hold Technology. The study, conducted for Virtual Hold Technology by The Adcom Group, surveyed 600 U.S. smartphone users between May and June on their mobile financial habits. More than 94 percent of those who have downloaded financial smartphone apps said they use them to check account balances, while 90 percent use them to view transaction history. Sixty-five percent of users transfer funds while 60 percent schedule or modify payments or online bill-pay. Only less than 1 percent indicated they use mobile apps to deposit checks, locate ATMs, cash in reward points or send money to others.

Read more

  • Image Processing Tech Limitations Could Stymie New Mobile Banking Apps

American Banker

Financial institutions have been experimenting for a few years with new and creative ways of taking advantage of smartphone cameras to provide mobile banking services. They started with mobile check deposit and have moved on to mobile capture of mortgage documents and drivers’ licenses. But there are factors that limit how widely mobile cameras can be used to advance financial services. Technology analysts say gaps in processing and user interfaces will have to be overcome before mobile image capture can be optimized as a way to expedite myriad types of consumer financial transactions. Bob Meara, a senior analyst at Celent, says adoption of remote deposit capture — or using a smartphone camera to take a photo of a check to facilitate a deposit — has grown quickly after a slow start. But more exotic uses of mobile capture, such as snapping a picture of a bill for mobile bill payment, have not been as popular.  “I would say adoption has been lackluster,” he says. Research from AlixPartners that forecasts mobile photo bill pay adoption could reach 33 percent by 2018.

Read more

  • Tapjoy: M-Commerce to grow 300% by 2015

Biz Report

Mobile is predicted to have a big impact on holiday shopping for 2012, but the bigger picture shows sharp increases in mobile spending over the next three years. According to new data out from Tapjoy mobile commerce (US) could increase by as much as 362% over the next three years. The Tapjoy study further shows: 54% of Tapjoy customers shopped via mobile in the previous six months. 45 million smartphone users looked into the shopping app category (June 2012); nearly half use these apps. On average, smartphone users access shopping apps 17 times per month. 64% of those polled said they would make mobile purchases over the 2012 holidaysWhile ‘on mobile’ users are comparing prices (61%) and accessing promotions/coupons (51%) the most. But, shoppers are also accessing reviews, scanning mobile barcodes and taking product pictures while shopping.

Read more

  • Working To Make ACH Easier To Explain

Credit Union Journal

In 2010, NACHA – The Electronic Payment Association began a new messaging project initiative to develop clear, powerful messaging ensuring a common understanding of the NACHA Operating Rules, the ACH network, and ACH payments. The initiative involved the definition, adoption, and consistent use of industry terminology to explain the ACH network, ACH payments, and their attributes and advantages. The recently launched ACH Messaging Campaign and Microsite are very important from my perspective, because consumers and businesses really still don’t know and understand the ACH network. Numerous tools have been developed to help those in the industry describe ACH payments with clear, consistent terminology.

Read more

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.