What We’re Reading: Bank Websites, Mobile Fees, Security Gaps

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.

 

  • Value-add mobile features offer potential revenue play

ABA Banking Journal

Retail banks can realize the full potential of mobile banking by offering segmented consumer experiences and advanced digital wallet capabilities, according to a study by Cognizant and Monitise. This, the study states, represents a new opportunity for retail banks to drive customer loyalty, attract new business, and generate more revenue. Tablets have emerged as a unique and valued user interface with 41% of survey respondents wanting to use tablets compared with smart phones, and 60% of tablet owners preferring a tablet for mobile banking. Feature personalization like rearranging tabs and functions is also important to more than 75% of the consumers surveyed. Offering this flexibility can give banks a competitive edge and help retain customers.

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  • Whither wallets?

ABA Banking Journal

ComScore’s study earlier this year painted a pretty dismal portrait of the digital wallet future. This company specializes in measuring consumer awareness of all things digital and when it queried a lot of people about digital wallets in particular, it found that only 51% of U.S. consumers had any understanding about what digital wallets are about, with the exception of PayPal. “Digital wallets represent an innovative technology that has not yet reached critical mass among consumers due to a variety of factors, including low awareness and a muddled understanding of their benefits,” says Andrea Jacobs, payments practice leader at comScore. Again, with the exception of PayPal-of which 72% of respondents were aware and 48% of respondents had actually used-only 12% of respondents said they had used some other form of digital wallet.

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  • How to Perfect Your Bank’s Website

American Banker

Up until the last decade or so, many banks and credit unions didn’t even have websites allowing consumers to access existing accounts, open new ones or apply for loans. Today, however, financial institutions not only have these sites, they are more focused on the mobile experience and creative apps that allow consumers to, for instance, deposit checks via their phones or get texts after they use an ATM. However, financial firms should make sure that their website is helping generate and retain customers before launching into more advanced mobile ventures. A website should influence customers to talk about their experience in a positive way, which helps expand a bank’s presence.

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  • Why Banks Are Finally Embracing Cloud Computing

American Banker

Banks are warming to cloud computing after nearly a decade of hesitation about trusting their data to outsiders. Seventy-one percent of bank executives surveyed in a recently released report say they plan to invest more in cloud computing, nearly four times the figure a year earlier, according to PricewaterhouseCoopers. (About half of the 115 large banks surveyed around the world are based in the U.S.) One reason for this shift, according to Julien Courbe, PwC’s financial services technology leader, is that vendors of public cloud services have made their offerings to banks more secure and reliable.

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  • 4 Ways Banks Can Improve Their Fraud-Fighting Efforts

Bank Systems & Technology

Today, we see threats associated with denial of service attacks, potential disruptions of sites, not necessarily intrusion onto sites. Over the years, banks have grown accustomed to the balancing act between protection and convenience. As threats change, protection measures must change, as well. Some protection measures are more transparent to the customer. Many customers use the same personal computer to conduct online banking, and their financial institutions are able to recognize the familiar computer as a method of authentication.

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  • Pay for Mobile? Banks Think So; Looking for ROI

Credit Union Journal

How to make money off mobile banking? — That was the question on the minds of bankers at the recent Mobile Banking Summit here. For banks, mobile app development projects can cost $1 million to $5 million, and often boards and executive committees want to see some kind of ROI first. For banks, the obvious answer is fees. Some in the industry feel it’s reputationally risky to charge fees for mobile banking services. Some believe mobile banking initiatives pay for themselves because the channel is much lower cost than branches.

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  • Surge in Mobile Banking Creates a Security Gap That’s a ‘Wild West’ for Fraudsters

Entrepreneur.com

Online banking has become ubiquitous as more people turn to their smartphones to carry out daily tasks. Still, while it may be more efficient, using your phone to make financial transactions could raise security risks. Portland, Ore.-based online fraud detection company iovation tracked online financial transactions across 1.5 billion devices in July and found that 20 percent were done through a mobile device or tablet. That’s an increase over the 18 percent of online financial transactions done on a mobile device between January and July of this year, and 11 percent last year, according to a statement the company released today.

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  • Global core banking market to hit $10bn in 2017

Finextra

Global spending on core banking technology is set for steady, if unspectacular, growth over the next four years, breaking the $10 billion barrier in 2017, according to research from Celent. This year, around $8.6 billion will be invested by banks around the world on core systems and Celent is anticipating a four per cent rate of growth over the next few years. Breaking down the spending, maintenance is set to rise at 6.1%, compared to just 2.4% for new projects. Fiserv remains the dominant vendor in the market among small banks with less than $1 billion in assets, commanding 39% of the market, more than twice as much as nearest rival, Jack Henry & Associates. Among bigger banks, the market is more splintered, with FIS, Temenos and Misys leading the way.

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  • The $1.5B Opportunity in Mobile Banking

FOX Business

If banks want to add another $1.5 billion to their collective bottom line, they should work on promoting mobile banking opportunities and, in particular, mobile deposits. That’s according to a July report from Javelin Strategy & Research, which found that banks could see significant savings if they did more to leverage mobile banking. The report notes that not only do mobile transactions cost less to process, but that mobile customers tend to be younger and more affluent — two traits that make them desirable targets for banks: Mobile deposits can save nearly $50 per customer and better banking apps might help.

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What We’re Reading: Tech Savvy Consumers, M&As, Credit Union Websites

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.

 

  • Mobile Banking Activity Continued to Grow in June

American Banker

Banks continued to report increases in mobile banking usage in June, according to the latest Mobile Banking Intensity Index. The overall value of the index, 72.5, was roughly in line with the intense growth of last month’s reading of 73.8. Mobile check deposit continues to be adopted quickly among these banks’ customer bases: the index value for mobile deposit was 87 for June. In one component of the index value, 77% of respondents said the volume of activity of retail customers using mobile deposit was higher in June than in May.

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  • Fintech Vendor M&A Activity Down First Half of 2013, Study Finds

Bank Systems & Technology

A new report by Berkery Noyes showed vendor mergers and acquisitions diminished in the first half of 2013, but a pickup in M&A activity may be on the horizon. The volume of mergers and acquisitions among financial technology vendors slowed in the first half of 2013, with total value for M&A deals in the industry falling by more than $8 billion compared to the second half of 2012, according to a report recently released by investment bank Berkery Noyes.

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  • NFC mobile payments: overcoming the barriers for banks

Banking Technology

Now the increasing prevalence of smartphones (not to mention mobile banking) has in turn resulted in a greater push for mobile payments; there have been several well-documented attempts to converge NFC and Smartphone technology to this end (albeit with limited penetration to date). Examples include Orange Quick Tap (in conjunction with Barclaycard) and NatWest’s trial of PayTouch. Yet there are a number of significant issues that face firms looking to innovate in this burgeoning arena.

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  • Why CU Websites Need To Be Less Like Brochures & More Like Amazon

Credit Union Journal

Jeff Chesky, CEO of Insuritas, who spoke as part of NAFCU’s Annual Conference, said that too many CUs’ websites look like digital brochures rather than the Amazon-esque sites consumers have grown accustomed to from other providers, where they can make purchases. Unlike Amazon, he said, credit unions don’t have to work to create love or trust—but most haven’t yet created an online experience as easy as Amazon’s. Moreover, he said, local webmasters and marketing directors generally aren’t equipped to do so. “Your marketing director in your credit union will never have the bandwidth or the capacity to convert your credit union’s webpage into an e-commerce site,” he said.

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  • Staying Relevant Demands New Tools, Innovation

Credit Union Times

Credit unions’ competition is not just big U.S. banks. Recently in San Francisco, Bank of India billboards were seen marketing the convenience of deposits in overseas accounts. With technology evolving, our idea of member service will need to evolve to remain relevant in today’s social, global and crowd-sourced world. Credit unions tout their great member service, higher savings rates, lower loan rates and fees but never their innovation and simplicity.

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  • How To Shatter The Mobile Banking ‘Glass Ceiling’

Financial Brand

According to a study on mobile banking from The Federal Reserve published in March 2013, there is a high probability that non-mobile bankers will eventually adopt the technology. Among those consumers with mobile phones who do not currently use mobile banking, 10% report that they will “definitely” or “probably” use mobile banking in the next 12 months. An additional 14% of those who sat they are unlikely to use mobile banking in the next 12 months report that they will “definitely” or “probably” adopt mobile banking at some point. Although consumers’ stated intentions may not perfectly reflect their subsequent behavior, there is strong evidence that “planned use” of mobile banking does in fact correlate with subsequent adoption.
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  • FFIEC may be prepping guidance for mobile banking

Mobile Payments Today

The word going around is that the Federal Financial Institutions Examination Council could introduce guidelines on mobile banking security within the next 12 months. But while that particular aspect of mobile payments may be in the regulatory eye, experts do not expect strictures to be more broadly applied. “The FFIEC issued its initial guidance to U.S. financial institutions on Internet banking authentication in 2005 and then provided an update in 2011,” said Dave Jevans, chairman and chief technology officer of Marble Security, whose firm specializes in mobile security.

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  • Mobile and Beyond: How Banks Are Catering to Tech-Savvy Customers

Motley Fool

The smartphone has changed everything. With people carrying around the equivalent of a mini-computer in their pockets, it’s only natural that a demand for easier banking options grows from the continued developments in convenient apps. Back in the 1990s and early 2000s, bank branches were viewed as an essential piece of the banking puzzle, with the FDIC reporting in 2007 that a convenient branch location was one of the most important factors for customers as they decided where to put their money.

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  • I’m Still Waiting for My Phone to Become My Wallet

New York Times

Last summer, Apple introduced Passbook, a digital system for storing boarding passes, movie tickets, loyalty cards and gift cards on the iPhone. But it doesn’t do much beyond that, at least not yet. Google worked with major credit card companies and banks to create its Wallet app, which lets people pay for items at some stores by waving their phones but is available only for Android devices. And the major mobile carriers in the United States banded together to form Isis, a mobile payments network, which has yet to roll out nationally.
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  • Stern Advice-Financial advice that is popular – and wrong

Reuters News

Instead of making extra payments to burn the mortgage early, stash those extra dollars in a retirement investment account. Invested prudently, it’s hard to believe that money wouldn’t earn you more than the 3 or 4 percent you’re paying in mortgage interest – which is tax deductible, don’t forget. Having the cash on hand, instead of the paid-up mortgage, could help with retirement expenses down the road when you’re not ready to sell your house but have unexpected expenses. If you think you want to stay in your house through your dotage, paying off a low-rate mortgage slowly while you bank money is a much better solution than paying it off now and finding you need a costly reverse mortgage in the future.

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What We’re Reading: Mobile Banking, Google Glass and Regulation

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.

 

  • Google Glass Dazzles Reporter. Will Bankers Feel the Same?

American Banker

Some of the mobile app features banks already offer, including augmented reality (read: PNC’s ATM Finder app), account information lookups, and geolocation, could eventually be incorporated into Google Glass. The project was first announced last year. It was later offered to coders at the company’s developer conference, Google I/O. On a recent Google Hangout, tech blogger Robert Scoble said that at least one bank overseas is already creating a version of its mobile banking app that will work on Glass.
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  • Mobile Banking Activity Rises in May

American Banker

Along with temperatures in most parts of the country, mobile banking activity continued to increase in May. The overall value of American Banker’s Mobile Banking Intensity Index was 73.8 for that month, a significant increase over April’s value of 70.4. Many of the bankers surveyed for the index said adoption of mobile banking continues to grow as more customers become comfortable with it. The MBII is a diffusion index; For context, readings above 50 in a diffusion index indicate expansion and readings below 50 point to contraction.

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  • Is Mobile Guidance on the Way?

Bank Info Security

U.S. banking institutions should be bracing now for new mobile banking and payments security guidelines from regulators or updates to existing guidance, a growing number of banking leaders and mobile experts are concluding. Recent discussions among regulators and banking leaders about mobile risks, as well as the issuance of papers related to mobile best practices, suggest some type of security update related to mobile is on the way. Doug Johnson, vice president of risk management policy for the American Bankers Association, says the timing for more mobile guidance is right, and banking regulatory agencies are using different vehicles to push security recommendations.

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  • Building Trust and Innovation through Digital Banking

Bank Systems & Technology

With online and mobile banking continuing to make deep inroads into consumers’ lives, it is time for banks to rethink how they attract and retain customers. Creating relationships with digital customers is critical if banks want to differentiate their brands and boost loyalty. Increasingly, banks can identify and mine a wealth of information about their customers – from social media and a variety of other digital sources – to make connections and draw insights that previously remained in silos or were unknown. By harnessing the power of digital channels, banks can move away from reactive, transaction-based customer relationships, towards a more personalized and proactive experience.

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  • What Banks Need To Know About IFCPA

Bank Systems & Technology

In fact, starting July 1, Section 1244 of the Iran Freedom and Counter-Proliferation Act of 2012 (IFCPA) represents a significant expansion of activities and entities potentially subject to sanctions, including key Iranian industries such as energy, shipping, shipbuilding and automotive. This latest round of regulations not only presents several challenges to U.S. banks, but also greatly expands extra-territorial reach. The broadened mandates state the president reserves the right to impose sanctions on anyone who knowingly sells, supplies or transfers significant goods or services used in connection to the energy, shipping, automotive and shipbuilding industries, along with a ban on shipments of precious metals and other materials such as coal and graphite.

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  • 21-Year-Old Raises Largest Seed Round In Silicon Valley History — $25 Million — For Mysterious Payments App

Business Insider

Twenty-one-year-old Lucas Duplan just raised more millions than his age. The first-time entrepreneur and recent Stanford graduate (he finished a computer science degree in three years) has been working on a mobile payment app for the past two years. He’s now been awarded $25 million from a long list of Silicon Valley investors which includes Andreessen Horowitz, Peter Thiel, Accel Partners’ Jim Breyer, Intel, Intuit, former Facebook COO Owen Van Natta, Salesforce CEO Marc Benioff, the founders of Qualcomm and VMware, and many others. The kicker: The app hasn’t launched yet and it isn’t going to for a few more months. Duplan’s 50-person team raised the entire $25 million – the largest seed round in Silicon Valley history – on a mere working prototype and a beta test at Stanford University.

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  • Survey Finds ‘Impressive’ Interest In Mobile Picture Pay Solutions

Credit Union Journal

Mobile Picture Pay, a new service that lets end-users take pictures of bills to make payments, showed “impressive” results in April, according to a new study from Malauzai Software, Inc. Malauzai, a provider of mobile banking SmartApps, said data from its Monkey Insights service for April and based on 94 banks and CUs encompassing 1.1-million log-ins for 85,000 registered mobile banking users, found: With Mobile Picture Pay, 5% of active end-users have used the feature in the first 90 days of launch. End-users are making 1.57 Picture Pay payments per month. The average payment size for Picture Pay is $151, about 40% less than standard bill pay.

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  • Paid via Card, Workers Feel Sting of Fees

New York Times

A growing number of American workers are confronting a frustrating predicament on payday: to get their wages, they must first pay a fee. For these largely hourly workers, paper paychecks and even direct deposit have been replaced by prepaid cards issued by their employers. But in the overwhelming majority of cases, using the card involves a fee. These fees can take such a big bite out of paychecks that some employees end up making less than the minimum wage once the charges are taken into account, according to interviews with consumer lawyers, employees, and state and federal regulators.

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What We’re Reading: Mobile Banking, Remote Tellers and EMV

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.

 

  • GoBank, the Pay-What-You-Want Mobile Bank Account, Launches Out of Beta (Video)

AllThingsD

Alok Deshpande, GoBank’s vice president of product development, said the company keeps its costs low in part because it doesn’t operate any brick-and-mortar bank branches. But does it actually think its customers will choose to pay a monthly fee of anywhere from nothing to $9 for a checking account, when they don’t have to? Deshpande said it’s too early to tell, since beta users weren’t given this option, but that the feedback the GoBank team has gotten is that beta users liked what the messaging around the payment option said about the type of banking relationship GoBank is trying to foster. Still, Deshpande hinted that the company may build out the bank’s feature set in the future, allowing for additional ways to make money.

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  • Consumers More Willing to Pay for Mobile Banking: Study

American Banker

Over the past year, consumers have become more willing to pay for mobile banking services, according to a new report by ath Power Consulting. According to the study, one in three consumers would be willing to pay something for mobile banking services, which is a 13% bump up from 2012′s study results. Last year, one in five consumers said they would pay for mobile services. The online survey polled 3,201 banking and credit union customers across the United States. Those reluctant to charge tend to think of mobile as a lower-cost channel and express concerns about consumer backlash. The majority of small businesses (63%) said they would pay something to use mobile banking, according to the report.

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  • Bank branches test remote teller system: Devices allow more after-hours services, but staff cuts are likely.

Atlanta Journal – Constitution

Across metro Atlanta and elsewhere, banks and credit unions are rolling out new technology that adds Skype-like video connections to oversize ATMs, letting you talk to tellers early in the morning and into the night. With them, you can complete complicated transactions that can’t be done at the ATM, even when the bank is closed.

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  • Andera, Intuit Partner on Account Opening Technology

Bank Systems & Technology

Andera’s oFlows solution has been selected as the new account opening technology by Intuit Financial Services. Andera’s cloud-based platform, oFlows has been chosen to be the new account opening technology for Intuit Financial Services’ institutional clients. The platform offers customers the ability to send in identity verifying signatures and documents to open accounts in digital and mobile channels.

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  • Wells Fargo offering text message receipts at its ATMs starting today  Mobile

Engadget

Forward-thinking financial institution Wells Fargo is offering its customers the choice of receiving a text message receipt — in addition to its e-receipt and email options — whenever you use one of the bank’s ATMs.

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  • The Durbin Debit Dilemma with EMV

Javelin Strategy & Research Blog

The Smart Card Alliance describes the problem in the context of the proprietary nature of a network’s chip application – EMV is designed so that transactions only go to the network specific to that chip on that specific card, there is no room for choice. The search therefore is on for a “Common AID”, one that can be shared by all of the debit networks with the level of ubiquity that is currently seen with magnetic stripe cards. But, the issue here is some of the proprietary systems are owned by the very parties that Durbin was seeking to control – Visa and MasterCard. As a result of this, there is effectively a three horse race in terms of solutions to the Durbin Debit Dilemma and predictably, two of these have been presented by Visa and MasterCard, with a third from the cornucopia of regional debit networks.

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What We’re Reading: Branches, Apple, Security and Square

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.

  • Capital One Turns to Responsive Design for Website Delivery

American Banker

With people no longer tied to their desks, customers are now checking their bank’s website from more than one type of device. So, in an effort to keep up, Capital One is enacting an online strategy to fit its website users’ screens using a technique called responsive design. Branchless bank startup Simple has been using adaptive web design and advanced mobile design since its inception, says spokeswoman Krista Berlincourt, in an email. The company was founded in 2010 and it launched in beta last summer.

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  • The Evolving Branch Environment

Bank Systems & Technology

According to SNL Financial, 1,118 more financial institution branches were closed than opened in 2012 – representing the largest such discrepancy in eight years. Yet by all accounts, the branch remains one of the most strategic assets banks have in servicing customers, delivering new products and services and growing deposits. Driven by continued consolidation within the industry, lower operational budgets and decreasing foot traffic at the physical branch, banks are evaluating the traditional branch structure to increase profitability and efficiency at the branch level and new technologies are being leveraged to achieve this.

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  • Android, iOS Dominate Smartphone Market; BlackBerry Falls

Bank Systems & Technology

Android and iOS, the number one and number two ranked smartphone operating systems worldwide, combined for 92.3% of all smartphone shipments during the first quarter of 2013, while Windows Phone jumped past BlackBerry for 3rd place, according to a recent report from IDC. According to IDC, Android smartphone vendors and Apple shipped a total of 199.5 million units worldwide during Q1 of 2013, up 59.1% from the 125.4 million units shipped during the same period in 2012. Samsung remained the leader among all Android smartphone vendors, the firm reported, wit 41.1% market share. Following Samsung was a long list of vendors with single-digit market share, and an even longer list of vendors with market share less than one percent, said IDC.

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  • DDoS Attacks: What Banks Report

Bank Info Security

Leading U.S. banking institutions remain quiet about the ongoing distributed-denial-of-service attacks they’ve suffered since the fall of 2012. Last month, we pulled the year-end 10-K earnings reports filed by the nation’s top 10 banking institutions (see Top Banks Offer New DDoS Details). Those top 10 include JPMorgan Chase & Co., Bank of America, Citigroup, Wells Fargo & Co., Goldman Sachs Group, Morgan Stanley, U.S. Bancorp, Bank of NY Mellon, HSBC North America and Capital One. Among them, seven acknowledged they had suffered from some sort of DDoS activity in 2012 that impacted online- and/or mobile-banking services; Morgan Stanley, Bank of NY Mellon and Wells Fargo did not mention DDoS.

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  • The Next Wave of Mobile Banking

Business 2 Community

In the U.S market today, retail banks offer a standardized mobile banking application. They enable their customers to monitor expenses, transfer funds and pay bills. This provides the convenience and ease of banking for the “on the go” customer. In general, mobile banking is an expanding market and has changed the way customers manage their funds. However, it is arguable that the user experience of each of the retail banks applications is similar. The application allows the end user to view their account balance, transfer funds and pay a multitude of bills.

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  • Digital Usage Policies and the ‘New’ Desktop

Credit Union Times

The PC desktop is changing, so fast that what used to confidently be called the “desktop” is undergoing the sort of rapid evolution bound to throw up new and unfamiliar security challenges. Technological developments such as smartphones, tablets and mobile operating systems can be wheeled out to partly explain this change. However, it is to the humble user rather than computer architectures of network topologies that we must pay the closest attention if we are to understand how the business desktop will be reshaped from the ground up over the next decade.

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  • Why Your Facebook Account Is More Secure Than Your Bank Account

Daily Finance

Earlier this month, federal prosecutors unsealed an indictment charging several men with bank theft on massive scale. According to prosecutors, the thieves loaded stolen account data onto magnetic stripe cards, which they then used to steal $45 million from ATMs around the world. As financial institutions reconsider their security procedures in the wake of the breach, much of the attention will naturally fall on America’s reliance on magnetic-stripe cards, instead of the more secure chip-and-PIN (also called EMV) cards used in other parts of the world. While they’re at it, though, the banks should also consider another big security black eye: The fact that it’s easier to hack into your bank account than it is to crack your Facebook account.

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  • Banks should follow Apple, Starbucks in branch redesigns

Fierce Finance

Banks have steadily moved away from the traditional branch with its long teller queues toward more of a retail store experience. The inspiration these days tends to be Starbucks and Apple retail outlets. Umpqua Bank in Oregon, for example, offers free internet service, an espresso bar, and meeting space at some branches; Capital One plans to offer coffee in its “café” concept branches. Bank of America plans to open at least a dozen “flagship” branches, which will include “power bars” to allow people to plug in gadgets.

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  • Square’s next step: Sending cash to friends by e-mail with Square Cash

VentureBeat

Sending cash to people by e-mail may be the next big payment feature to spread across the Internet (even though it’s 2013, and it feels like we should have had this years ago). Payment service Square is currently testing an invite-only service called Square Cash, which you can use to send money to anyone’s debit card with a simple e-mail, TechCrunch reports. Google launched a similar feature last week when it announced Google Wallet integration with Gmail, but Square’s version looks even simpler.

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What We’re Reading: Finovate, Consumer Spending and Security Technology

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 Buzz at Finovate: New Security Tech

American Banker

Security has taken on increased importance this year in light of recent data breaches that have put millions of dollars on the line and the ongoing threat of distributed denial of service attacks. Reflecting this industry-wide sense of alarm, at this week’s FinovateSpring there were several startups focused solely on providing authentication to bank customers. “Information security has always been a space with a ton of vendors, both small and large,” says Jacob Jegher, a Celent senior analyst. “[But] it’s great to see increased emphasis on security at Finovate.” He says it’s time for the banking industry to “up the ante with regards to authentication, identity management, and overall fraud prevention.”

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  • Study Shows Widespread Ignorance on Credit Scores

American Banker

A large percentage of Americans know little about their scores, a new survey found. The survey shows widespread misunderstanding about how scores are calculated and how they can be improved. Between one-quarter and two-fifths of adults can’t answer basic questions about their scores, according to the survey released Monday by the Consumer Federation of America and VantageScore Solutions. Two-fifths of respondents did not know that credit card issuers and mortgage lenders use scores to make decisions about credit availability and pricing, the survey found.

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  • The Next Wave of Mobile Banking

Business 2 Community

In the U.S market today, retail banks offer a standardized mobile banking application. This provides the convenience and ease of banking for the “on the go” customer. In general, mobile banking is an expanding market and has changed the way customers manage their funds. However, it is arguable that the user experience of each of the retail banks applications is similar.

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  • Banking security and five essential layers

CIOL

There have been significant changes in the threat landscape for online banking. In order to protect customers using Internet-based products and services, such as applications, the Federal Financial Institutions Examination Council (FIEC) and other regulators have instituted significantly more stringent requirements for financial institutions. Ensuring a compliant security program requires the execution of a good, multi-faceted authentication solution.

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  • 5 Things You Don’t Know Because You Weren’t at Finovate

Credit Union Times

FIS Wants To Be Your Mobile Main Man. The Jacksonville, Fla., tech behemoth may not have a rep for cutting edge tech, but Doug Brown, a vice president, was at Finovate with authentic tech hipster Chris Gardner – presently CEO of Paydiant, a mobile payments platform, and a serial tech entrepreneur whose cloud-based technology is powering some of FIS’ mobile offerings. The message: FIS has the mobile tech a credit union or bank needs. For instance: Brown demoed FIS’ Cardless Cash Access which lets a consumer withdraw real money from an ATM using only a smartphone (no debit card required).

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  • Banks should follow Apple, Starbucks in branch redesigns

Fierce Finance

It’s certainly true that banks are rationalizing the sheer number of branches they support, especially in regions where the costs outweigh the returns. But banks are also investing in the branch experience, which has led to lots of design and technology enhancements. By redesigning branches, banks are aiming to modernize the bank experience. This modernization has gone through many incarnations over the past decade.

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  • FBI Briefs Bank Executives On DDoS Attack Campaign

InformationWeek

FBI expedited security clearances so it could share classified info on Operation Ababil, a distributed denial of service attack that continues to disrupt U.S. financial websites. The FBI recently granted one-day clearances to security officers and executives at numerous banks so it could share classified intelligence on the Operation Ababil campaign that’s been disrupting U.S. financial websites for almost a year.

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  • 5 Hot Opportunities for Start-ups

Inc.com

Fresh numbers from Intuit shine a light on where consumers are spending the most–and where you might want to look for new business ideas. One way to find a hot business idea is to follow the money: Where are consumers spending the most? If that’s your approach, consider Intuit’s recently released findings from its Consumer Spending Index. It’s based on anonymized and aggregated data from more than 2 million Mint.com (an Intuit-owned budgeting tool) users who have agreed to share their demographic information such as age, gender, income, and location. The index measures spending habits from January 2009 to April 2013 and shows consumer spending is up nine percent from four years ago, and significantly so in certain sectors.

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  • The Next Generation of Cross-sell

Payments Journal

Too many financial institutions assume that cross-selling means offering products to every customer who walks through the door. According to Russell Lester, Director of Analytics at Intuit Financial Services, getting consumers to adopt lower cost services or channels can be a very profitable form of cross-sell. The cost of depositing a check using RDC on a mobile device is 10% of what it costs a bank to deposit a check in the branch. Using the previous example of an unprofitable DDA customer, it is easy to see how “cross-selling” them on RDC could result in a lower cost (and thus more profitable) relationship.

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What We’re Reading: Cybersecurity, Tablets in CUs and Consumer Spending

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.

 

  • Cybersecurity Should Not Come at Expense of Privacy: White House

American Banker

The White House says the nation needs new laws to reinforce its cyber defenses but that the push should not come at the cost of privacy. The House of Representatives on April 18 passed the Cyber Intelligence Sharing and Protection Act, or CISPA, which would encourage owners of financial networks, utility grids and other critical infrastructure to share information about digital threats with the government and one another. The White House has threatened to veto the bill, saying it lacks sufficient privacy protections. Civil liberties groups and other critics of the measure charge that it would allow companies to share people’s emails and text messages with U.S. intelligence agencies.

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  • Small Business Owners Big on Mobile Technology

American Banker

A survey of 1,305 small business owners conducted by Constant Contact in March found that 66% currently use a mobile device such as a smartphone or tablet in their work. Of the non-mobile users, 65% have no plans to use a mobile device in the future, many citing a lack of demand for mobile access from their customers. This segment is partial to Apple devices, according to the survey — 66% use iPhones, while 39% use Android phones. About 49% use iPads; only 15% use Android tablets.

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  • Keep Wal-Mart Out of Financial Services, Bankers Ask

BusinessWeek

A group of bankers advising the Federal Reserve urged U.S. regulators to consider preventing Wal-Mart Stores Inc. from offering some financial services. The Federal Advisory Council, a body of bankers that includes PNC Financial Services Group Inc. and BB&T Corp., said at a Dec. 19 meeting that Wal-Mart’s sales of prepaid cards warranted greater federal oversight. Minutes of the meeting were obtained yesterday under the Freedom of Information Act.

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  • Consumers spending nearly 10% more than in 2009

CNN Money

American consumers are spending nearly 10% more than they did four years ago when the country was reeling from the effects of the financial crisis, according to an analysis of the spending behaviors of millions of Mint.com account holders. In the first quarter of 2013, the average household spent roughly $4,220 per month — up from about $3,870 in the same period of 2009, according to the inflation-adjusted consumer spending index released Wednesday by Intuit, which owns personal finance site Mint.com.

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  • Why CUs Can’t Afford To Be Left Behind On Tablets

Credit Union Journal

It’s estimated that nearly half of the U.S. Internet population will be using tablets by 2014, which means increasing pressure on credit unions to adapt and conform to the trend. “The proliferation of tablet devices in the U.S alone is impacting everyone who manages their finances via a digital channel, including credit union members,” said Kenneth Hans, executive director of Blackstone Technology Group’s Financial Services Practice. “Much like banks, credit unions are looking for ways to cater to this latest form-factor that offers the power of a laptop in a much smaller and convenient size.” Among credit unions encouraging members to use tablets is the $5.3-billion Suncoast Schools FCU, which has 549,303 members that it has traditionally served via its 53 branches, but mobile devices such as tablets have changed that equation somewhat.

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  • Credit Cards – Game ON!

Gonzo Banker

Credit cards in circulation hit a peak in 2007 at 710 million cards, according to a 2013 Nilson Report. Then the crash of 2008 hit, the Card Act went into play in 2009, and consumer spending changed. From the low point in 2010, the number of cards increased by roughly 50 million in 2011 and continues to climb today, when we have 520 million cards in circulation. Credit card interchange has not been Durbin-damaged as of yet, and interchange is still high. In the United States, 10 issuers own 85.4% of the cards on the market (Source: The Nilson Report, February 2013).

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  • New Fed Report: U.S Mobile Payments Landscape – Two Years Later

Payments News

The Federal Reserve Bank of Boston in conjunction with the Federal Reserve Bank of Atlanta has just published a new report titled “U.S. Mobile Payments Landscape – Two Years Later.” Based upon ongoing meetings of the Mobile Payments Industry Workgroup (MPIW) convened by the Federal Reserve, the report updates an earlier paper from 2011. It examines changes in the evolution of mobile POS retail payments over the past two years, characterized by an expanding fragmented market environment and frequent technology innovations.

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

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

 

  • Small Business Owners to Banks: Meet My Needs

American Banker

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

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  • Using Big Data to Fight Phishing

Bank Info Security

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

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  • Mobile Growing, But Still Not Preferred Channel

Bank Systems & Technology

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

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  • Banks plot major shrinking of branches

Crain’s New York Business

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

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  • A New Social Media Platform For Advisors

Financial Advisor Magazine

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

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

Financial Brand

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

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

Javelin Strategy & Research Blog

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

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  • Mobile Remote Deposit Capture and More Convenient Banking

Main Street

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

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  • Banking by Voice Gets Test From U.S. Bank

The Street

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

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What We’re Reading: Malware, Fees and Tablets

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.

 

  • Prepaid Cards Still Have Lots of Fees: Survey

American Banker

A survey by Bankrate.com compares 24 prepaid cards based on the fees they charge consumers. For example, the 2012 survey found that 14 of 18 prepaid cards charged customers a balance inquiry fee on at least some automatic teller machines. This year, 18 of 24 cards charged such a fee on at least some ATMs. In last year’s survey six out of 18 prepaid cards charged fees for at least some declined transactions. This year, nine out of 24 cards did.

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  • FDIC on Social Media Risks

Bank Info Security

As the use of social media grows among banking institutions, federal banking regulators warn those institutions need to be mindful of phishing and spoofing schemes. Drafted guidance issued by the Federal Financial Institutions Examination Council now details how banks and credit unions can prepare to mitigate the new and emerging risks social media poses. The drafted guidance, issued in January, references applicable laws and regulations banking institutions should consider when planning and conducting their activities related to social media, says Elizabeth Khalil, of the Federal Deposit Insurance Corp., which is part of the FFIEC.

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  • Creating A Customized Banking Experience With Big Data

Bank Systems & Technology

Big data opens the door for banks to group their customers according to their banking preferences, which can make customers more satisfied and more profitable. Banks have been increasingly focused on customer experience in recent years, but they’ve been taking an approach that is too broad, says Dean Nicolackis, a partner at PwC’s banking and capital markets practice. While many banks are trying to configure a customer experience that is consistent for every customer across every channel, the key to a really great customer experience is providing a different personalized experience that fits different customer segments, Nicolackis contends. Different customers just want different things – and are willing to pay for different things – from their bank.

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  • Are Tablets Their Own Channel And Does It Matter?

Business 2 Community

The latest research from Javelin Strategy and Research indicates that the tablet users are older; between the ages of 35 to 54, have an average household income of $75,000, and half of them consider themselves to be early adopters. When compared with mobile banking, statistics show that users spend more time on tablets. The question though is not whether it should be considered a separate channel. However, whether separate or not, the bottom line, from a customer experience point of view, the service has to be consistent, and that is the key – it has to be fully integrated into all the other channels and the interchange between the channels has to be seamless.

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  • SaveUp Program, Other Tools Target Millenials

Credit Union Journal

Frankenmuth Credit Union CEO Vickie Schmitzer is continually focused on implementing industry innovations to attract members of all ages, but especially Millenials. That focus stems from the credit union’s work in the field. “We work as much as we possibly can with our local public and parochial schools at every grade level,” said Schmitzer. “We know they are our credit union’s future and that new technology is what attracts them to a financial institution or business of any kind, for that matter,” said Schmitzer.

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  • First Tech Also First CU to Launch Windows App

Credit Union Journal

First Tech FCU, the credit union for Microsoft Corp., said it has introduced a new Windows Phone mobile banking application, the first credit union in the U.S. to introduce a native Windows Phone mobile banking app complete with integrated mobile deposit and bill pay functionality. First Tech launched its new Windows phone app on-site at the main Microsoft campus in Redmond, Wash., giving employees of Microsoft an in-depth look at this new platform. Microsoft employees and First Tech members will be able to view the app on a giant Microtile phone display, chat with First Tech App experts and personalize their Windows Phone at a laser engraving station.

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  • Malware Attacks Growing, Getting Smarter, Targeting Android: Report

eWEEK

In 2012, 95 percent of malware threats targeted Android, says a new report. Malware attacks are increasing, getting smarter and targeting Google’s Android mobile operating system, according to a new report from NQ Mobile, a mobile security solutions provider that based the report on the findings of its Security Lab. Mobile malware threats increased by 163 percent in 2012, and 95 percent of all threats were targeted at Android, said the report. The firm estimates that 32.8 million Android devices were infected in 2012, an increase of 200 percent from the 10.8 million infected in 2011.

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  • Banks Are Designing Branches to Look Like Apple Stores In a Struggle to Remain Relevant

Go Banking Rates

There are a few regional banks, like Umpaqua, that fully embraced “smart banking” years ago. For major, national banks, it was Citi that sparked the trend. In 2008, beginning with its Singapore location, the bank began constructing futuristic branch prototypes that swapped tellers for touchscreens, size with efficiency, and gave locations the overall look and feel of Apple stores.. Rather than reinventing the wheel when it came to modern design, Citi actually hired the services of Eight, Inc., the architectural and strategic design firm behind Apple, according to The Financial Brand.

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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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