What We’re Reading: Corporate Mobile Banking, Security, Mobile Gift Cards

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.

 

  • Websites that adapt on the fly

ABA Banking Journal

The days of online banking being limited to desktop computers are over. Modern consumers are increasingly interacting with their banks using mobile devices such as tablets and smartphones. Understanding the popularity and value of on-the-go banking services, a handful of financial companies are beginning to introduce websites with “responsive design” to optimize their digital resources across the online and mobile channels.

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  • Microsoft Joins FIDO Alliance Security Standards Group

American Banker

The FIDO Alliance, a consortium of vendors promoting authentication standards that includes Google, PayPal, Lenovo, BlackBerry and Nok Nok Labs, announced a major new member today: Microsoft. The Mountain View, Calif.-based FIDO Alliance (FIDO is short for Fast IDentity Online) is creating a protocol that will let applications, browsers and servers speak the same language for authentication. This could become a universally accepted alternative to passwords, which are considered by most to be too easy to game and too hard to remember.

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  • Corporate Mobile Banking? Not So Fast

Bank Systems & Technology

Capital One research suggests security concerns are delaying many business customers’ adoption of mobile for corporate banking, while there is growing interest in commercial cards and self-service capabilities. Fewer than half — 48% — of the finance professionals surveyed by Capital One at the recent Association for Financial Professionals (AFP) Annual Conference said their companies have plans to implement new treasury management tools and/or services this year. Those plans include implementation of corporate mobile banking for a relatively small portion — 12% — of the 68% of responding firms that do not already offer the service, according to Capital One.

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  • Weak Security In Most Mobile Banking Apps

Dark Reading

Security experts this month tested 275 Apple iOS- and Android-based mobile banking apps from 50 major financial institutions, 50 large regional banks, and 50 large U.S. credit unions. Overall, they found that eight out of 10 apps were improperly configured and not built using best practices software development. Among the big-name banks whose mobile apps were tested by security firm Praetorian include Bank of America, Citigroup, Wells Fargo, Goldman Sachs, Morgan Stanley, Capital One Financial, and Suntrust Banks.

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  • Putting the Pieces in Place: LifeLock and Lemon Wallet

Javelin Strategy & Research Blog

At first glance, LifeLock’s $42.6 million acquisition of Lemon may not seem to fit quite right.  To some it may appear that LifeLock is buying access to Lemon Wallet’s user base, but an app with 3.6 million downloads does not justify that kind of investment on its own.  As for LifeLock getting into the mobile payments game, the last thing the market needs is another also-ran.   Fortunately, all is not as it seems because LifeLock may have actually found a way to avoid the rampant customer turnover which has been plaguing the identity protection industry.

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  • Bank Opportunity #307: Online/Mobile Gift Cards

Net Banker

Regardless of the form factor, a favorite holiday gift is money. Some people like to give crisp 20s, the hand-written check still has a certain charm (as long as the recipient has mobile deposit capture), but the biggest growth area has been the plastic gift card. Banks should have owned this trend, at least in the United States. Those 100,000 branches would have been good distribution points, a place that you trust far more than the express checkout lane at Safeway. Financial institution still have an opportunity to be major players in digital gift car distribution, especially mobile.

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  • Banks shouldn’t use text messages for two-factor authentication

PC World

A widely used security feature intended to protect access to online bank accounts is becoming increasingly ineffective, as cybercriminals develop advanced malicious software for Android devices, according to a report released Wednesday. Many banks offer their customers two-factor authentication, which involves sending an SMS message with a code that’s entered into a Web-based form.

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What We’re Reading: Mobile Banking Scorecard, Social Media, Big 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.

  • Fifth Third CEO: Social Media Keeping Banks Honest

American Banker

The Consumer Financial Protection Bureau was created to ensure that banks treat customers fairly, but Facebook and Twitter are even more effective at keeping banks honest, argues Fifth Third Bancorp (FITB) Chief Executive Kevin Kabat. In a speech that largely focused on the regulatory response to the crisis, Kabat said social media is now taking a central role in helping banks assess their standing among customers and shareholders. Banks don’t really need new guidelines and mandates from regulators, he said, since every action — from the introduction of a new product to new disclosures on checking accounts — can be censured in real time.

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  • Study: Banking’s branch of tomorrow

ATM Marketplace

In new research, “Arriving Now — Banking’s Branch of Tomorrow,” Mercator Advisory Group reviews continuing evolution of branches today in banks and other financial institutions, according to a news release about the study. “With recent advancements occurring in the self-service banking channels — including ATM, online, and mobile banking — coupled with an expansion of teller duties in both full- and assisted-service roles, branches continue to evolve at many financial institutions, with branch reconfiguration at the center of many FIs’ branch strateg[ies],” said Ed O’Brien, director of the banking channels advisory service at Mercator, and author of the report.

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  • Chase Tops Keynote Mobile Banking Scorecard

Bank Systems & Technology

Banks are moving towards offering more robust, transactional mobile services and capabilities, the scorecard finds. Chase achieved the top overall score in the 2013 Mobile Banking Scorecard from Keynote Competitive Research, the industry analysis group of San Mateo, Calif.-based Keynote Systems. The scorecard compared the mobile banking offerings of the top 15 U.S. banks and ranked the banks across four mobile categories: text, mobile Web, iPhone app and Android app. The banks were ranked in four categories, functionality, ease of use, quality & availability and privacy & security.

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  • Sibos #2 – Your Weather Forecast for 2014

Celent Banking Blog

The headline is that Sibos is back. Swift would argue that it never went away, but after the rather damp squid that was Osaka, the difference was clearly different, with the halls full and buzzing. Swift clam 7,648 delegates, which breaks out to roughly 44% Europe, 29% Middle East & Africa, 16% Asia Pacific and limping in last, 11% Americas.  Considering the size of the delegations from the large US banks, the latter number shows that Swift needs to continue to make sure the conference returns to the US regularly.

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  • How CUs Can Use Big Data To Drive Big Revenue

Credit Union Journal

The ever-growing file of aggregated, disparate information known as “big data” is leaving many credit unions with more questions than answers. A new report, however, shines some light on how CUs can use predicative analysis to increase revenues. “Big data is something we have recently begun to focus on but we are new to it,” said Robert Keats, vice president of information technology for Grow Financial FCU. “I believe there probably have been some missed opportunities in the past, but if we had all the data in front of us, and understood it, better decisions could be made.”

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  • Behind eBay’s $800M buy: Braintree will replace PayPal’s developer platform

GigaOm

eBay’s $800 million purchase of Braintree is primarily motivated by one big factor: PayPal’s need for a nimble and flexible commerce platforms that met the demands of the new generation of startups and mobile app developers. That’s according to John Lunn, PayPal’s global director of developer networks, who spoke with GigaOM Thursday morning.

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  • Chase leads US mobile banking segment

Telecompaper

According to new mobile banking data from Keynote, Chase achieved its fourth consecutive win for Overall Score. Following Chase was Wells Fargo and Bank of America, with US Bank moving into the top tier, tying with Bank of America for third place.

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What We’re Reading: Customer Surveys, Cloud, Big 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.

 

  • What’s new is what’s happening

ABA Banking Journal

It’s big deal when your company is named in a list of the “world’s top 100” anything, and it’s a really big deal when your company is listed on Forbes’ “World’s 100 Most Innovative Companies.” So the people at FIS—or more specifically, Fidelity National Information Services—should rightly feel pretty good about their recent placement on this very list, at the 98th spot. It’s the only U.S. financial technology provider there, which includes such other companies as Apple, at a surprisingly distant No. 79, Pepsi, at No. 58, and Google, at No. 47.

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  • Bank Fees Rankle Otherwise Satisfied Customers: Survey

American Banker 

Checking account fees may help banks pad revenue, but a new survey suggests that ATM and overdraft charges can send customers running. Over a third of Americans said they would be very or extremely likely to switch banks to avoid paying fees on their checking accounts, according to TD Bank’s inaugural survey of more than 3,000 consumers. In fact, 14% of respondents have already moved their business for those reasons. Some types of charges aggravate customers more than others; 38% of respondents said that nonbank ATM fees were the most frustrating type of charge. Another 27% awarded that dubious honor to overdraft charges. Just 13% picked minimum balance fees as the most annoying type of charge.

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  • Microsoft and Nokia: What Kind of Marriage Will It Be?

Celent Banking Blog

Microsoft announced that it has purchased Nokia’s mobile phone business. According to the announcement, “Under the terms of the agreement, Microsoft will pay EUR 3.79 billion to purchase substantially all of Nokia’s Devices & Services business, and EUR 1.65 billion to license Nokia’s patents, for a total transaction price of EUR 5.44 billion in cash.” Both companies have been struggling to adapt to changes in mobile computing – Nokia has lost its leadership in handsets, and Microsoft was rather late in announcing its latest Windows mobile operating system, which remains a distant third to Apple and Android.

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  • ‘Stache & Save’ Helps Kinecta Connect On Facebook

Credit Union Journal

Kinecta FCU here boosted its Facebook engagement by using mustaches and an online slot machine. Kinecta launched it “Stache & Save” campaign as a way to increase engagement on its Facebook page and grow its number of likes. To do so, it created an online slot machine, and when users pulled the digital handle, it rotated through three different mustaches. Three matches made for an instant winner of a $50 gift certificate and was entered into a drawing for a $2,500 gift certificate.

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  • Big Data and Payments Drive Loyalty in Business Banking.

Finextra

In the ‘consumer edition’ of the blog it was suggested that banks can reinvigorate their payments brand and influence customer loyalty by integrating incentives and offers to their payments solutions. The premise is that banks are missing out on an opportunity to become more influential in where people shop and what they buy, rather than just how they pay. Offers can be driven by analytics into a combination of historical payments information and big data analysis of demographics, location positioning and peer group analysis. Such a strategy requires more than an offers solution, or a mobile banking app.

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  • The Path to Innovation Goes Through the Cloud

Huffington Post

As cloud adoption reaches the tipping point, some sectors are seeing newer market entrants threatening to overtake legacy players mired in tradition. Gartner predicts that the worldwide cloud services market will grow 18.5 percent in 2013 to total $131 billion, up from $111 billion in 2012. Yet, many of the world’s oldest professions such as accounting, legal and banking have been slow to tap the cloud to make it rain. The flexibility of cloud computing – being able to try before you buy, scale easily and use the device that suits you – allow savvy businesses to respond quickly to market trends and demands.

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  • 6 Tips for Safer Smartphone Banking

TIME.com

More than half of American adults have a smartphone today, and more of us are using them to check balances, pay bills, deposit checks and conduct other banking business. Luckily, experts say there are steps that even non-technophiles can easily take to safeguard sensitive information. Password-protect your phone. Stay off public wi-fi networks. Use the bank’s app. Don’t save your log-in data. Keep up with updates. Log off when you’re done.

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What We’re Reading: Mobile Deposit, Payments and Mobile

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.

 

  • First Niagara Website Redesign Drives 30% Increase in Traffic

American Banker

Since the First Niagara’s website re-launch, traffic has gone up 30% and the time customers spend on the site has gone from 10-15 seconds to two minutes and thirty seconds. “They’re actively shopping and looking for information on the site,” Thomas Bontempo, senior vice president and digital marketing director says. “We’ve improved online account opening and are now getting 500 funded new accounts online a month. That’s still not where we need to be for a bank our size, but we’ve taken the right steps and it’s the right direction.” Customer satisfaction rose from 64% to 72% after the redesign, according to a survey the bank conducted.

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  • Brand expansion through branchless banking

ATM Marketplace

While transactions at financial institution branches across the U.S. are dropping by approximately 5 percent per year, PC and Internet use are on the rise. The trend toward nationwide and even global connectivity is providing a unique opportunity for FIs to reach new markets and drive services from declining bank branches directly into the homes and hands of customers. Conventional banking channels are reaching inherent limits while increased access to Internet and mobile are making banking from home far more attractive for consumers. A 2010 survey by the American Banking Association found that 36 percent of bank customers preferred to do their banking online.

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  • Best Practices for New Product Roll-Outs

BAI.org

Building out or improving remote delivery channels, such as online banking, mobile banking and electronic bill pay, with new products and systems represents one of the greatest opportunities a bank can face – and one of the greatest challenges, as well. Relying too heavily on vendor expertise has meant a missed opportunity for many institutions. While vendors have a lot of insight into best practices, they typically do not offer or bring that experience to their clients unless specifically asked. Leveraging internal resources and expertise, as opposed to simply implementing new software, will help banks bridge the gaps in a vendor’s statement of work (SOW) and successfully launch these important strategic products.

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  • The New Ecosystem for Mobile: Technology Alliances for M-Payments and M-Banking

Bank Systems & Technology

Banks and financial institutions are most effective when they can utilize technology and outsourcing services to give customers full accessibility to their accounts – but reduce their direct interaction with customers. To this end, we are seeing banking technology vendors continuously generate innovative ideas and solutions. During the past decades, we’ve witnessed the evolution of Checks and their Clearing Systems, Automated Teller Machines (ATM), Point of Sale (POS) devices, Interactive Voice Response (IVR) Systems and the list continues. The evolution of mobile technology has allowed banks to embed mobile in their front-end solutions offering flexibility, ease of use, and accessibility to their banked customers and account holders. Through Mobile Banking (m-Banking) services; users can review their balance, transfer money between accounts, and perform some sort of utility payments along with many other services that enables interaction between the account owner and the bank’s back office systems.

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  • China, South Korea lead world mobile commerce

Inside Retail Asia

Mobile commerce is playing an increasingly significant role across Asia-Pacific according to a new report.  The study found that 55 per cent of internet users in China made a purchase via a mobile phone in the fourth quarter 2012, making China the country with the world’s highest mobile shopping penetration rate. For an idea of just how dominant the mobile purchase channel is in Asia, consider the case of North America. There, just 19 per cent of US internet users and 13 per cent of internet users in Canada made a mobile purchase in the fourth quarter. In other words, China’s mobile purchase penetration rate is nearly triple that of the US. eMarketer estimates that 270.9 million internet users in China will make an online purchase this year – counting purchases made through mobile devices. By 2016, eMarketer projects that number to rise to 423.4 million, and mobile will clearly play a significant role in that transition.

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  • Evolution to Revolution: Real-Time Payments Initiatives Unfold

Javelin Strategy & Research Blog

The Australian Payments Clearing Association (APCA) was the latest multi-stakeholder group to approve a real-time payments initiative in support of evolving consumer and business needs for accelerated transacting. As noted in Javelin’s recently released report, Real-Time Payments 2013: Struggling Toward Revolutionary Change, many of the payments mechanisms in use today — as well as the networks that support them — were developed before the era of “always on” connectivity, before Internet commerce, and prior to the ubiquity of mobile devices. These new market components, however, are driving a global paradigm shift that is beginning to snowball.

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  • Mobile banking will break the 1 billion user mark in 4 years

Mobile Commerce News

By the year 2017, studies are showing that the use of these services will have skyrocketed. The latest mobile banking study data from Juniper Research has indicated that an increasing acceptance of this type of smartphone and tablet based service has caused users to bring the number of users up to nearly 200 million. It is expected that the growing use of tablets will play an important role of the industry’s adoption. In fact, while mobile banking over tablets represents 9 percent of the total number of customers at the moment, it is expected to represent 19 percent by the close of 2017, said the Juniper Research data. Consumers are taking on increasingly mobile lifestyles, which is allowing them to turn to this type of service more and more.

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  • Mitek: 12 Million Americans Have Deposited Checks Via Mobile

Mobile Marketing Watch

The rate of adoption observed in mobile banking is surprising even the most bullish of industry advocates. According to the latest data available, Americans have now deposited more than $40 billion into their accounts by simply snapping a photo of a check. All told, some 12 million mobile users have now made a mobile deposit, a number that is poised to expand further in the wake of new partnerships and opportunities that make mobile banking options more readily accessible. Mobile Commerce Daily reported Tuesday, for example, that 708 banks and credit unions have signed agreements with Mitek – makers of the leading mobile document capture software – to provide mobile deposit options to customers.

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  • The knives come out: Mastercard will charge PayPal and Google for their mobile wallets (updated)

The Verge

Visa’s CEO Charlie Scharf said that “it is totally appropriate” to charge companies like PayPal and Google a fee when their digital wallets get used. Both PayPal and Google offer something called a “staged wallet,” which means that those companies act as a kind of intermediary between you and your credit card. That theoretically helps make your wallet easier to use — since it can contain multiple cards — but Visa and Mastercard really hate this approach because it means they can’t collect as much data about your purchasing habits. Scharf’s statement comes on the heels of an already-announced Mastercard program called the “staged digital wallet operator annual network access fee,” which is a long way of saying that it wil begin charging companies like PayPal when they use a Mastercard plugged into a PayPal digital wallet.

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Reality Check

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

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

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

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

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

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

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

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

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

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

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

About David Sutton: David has a BA in economics and a MS in business journalism, and his articles have appeared on Forbes.com and in the Boston Business Journal. David has had a bank account since he was three.

The Social (Payments) Network

While Google’s privacy policy and user-tracking have been under the microscope recently, Facebook has been quietly acquiring money transmitter licenses from state agencies around the U.S.

Is Facebook gearing up to battle PayPal and the ever-growing list of companies in the payments space? Are they just preparing for the increased scrutiny that going public will bring? Or, perhaps they plan to revolutionize the financial service industry with their more than 845 million users worldwide?

The point is no one really knows.

A recent article in American Banker shined a light on the social network’s recent activity with state regulators, confirming at least 15 states have granted money transmitter licenses to Facebook. Facebook already maintains a digital currency, Facebook Credits, for use with Zynga’s Farmville and some of its other online games. Point being: Facebook is well positioned to provide person-to-person (P-to-P) money transfers with real-world currency.

What would a Facebook-based financial institution look like?

Well a lot like PayPal actually, but with more traffic – people updating their status, posting pictures, checking up on friends, etc. P-to-P transfers seem a natural fit. Banks have begun to offer P-to-P and need to take Facebook seriously as a competitor. Bank transfers can be as easy and convenient as simply entering the recipient’s email address and the amount to be transferred. If you are already logged in to Facebook, it could only take several clicks, eliminating the need to switch to a bank’s site or PayPal.

Currently, advertising space is the only product sold by Facebook. It stands to reason Mr. Zuckerberg and company would jump at the chance to squeeze more revenue from his website’s users. Taking a small percentage of the P-to-P transfers would generate additional revenue.

Facebook collects information about users, their preferences and activities on their site, giving them a huge advantage over other FIs. Only Google comes as close to compiling as much user information.

The popularity of the payment space continues to surge with a seemingly never-ending line of companies ready to compete for a piece of the market. Case in point: Retailers Walmart and Target recently announced that they, too, will soon launch a mobile payment system. Starbucks and Subway launched mobile payment solutions last year.

Retailers like to provide payment solutions because it enables them to offer special deals to customers, avoid paying costly transaction fees to FIs, and provide greater security than a multiple vendor system. Perhaps most important is the additional information about each consumer, which can be culled and analyzed in order to maximize sales from each individual and thus increasing the retailer’s revenue.

Questions remain about if and how Facebook would handle basic banking functions like deposits, interest, and fees, but FIs would be wise to prepare for competition from yet another company.