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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The Zen of Gen-Y

*This post originally appeared on MyBankTracker as a guest post from Banking.com.

At this point it’s almost a cliché to talk about millennials. We know who they are: the generation born between the late ‘70s and late ‘90s, or essentially book-ended by the Vietnam War and 9/11. They’re frequently derided, but can’t be ignored — there are now close to 100 million of them, which means they constitute the bulk of the consumer class. More importantly, they define both the business and lifestyle practices of the modern era. They’re not them anymore — they’re us.

So what does this mean for the business world in general, and the financial services community in particular?

That question periodically generates hot debate, and we seem to be in one of those cycles now. Every shift and each innovation is viewed through this prism, and with good reason. Trends will rise and fall based on its success with this market.

To be clear, every successive generation has its defining characteristics. The Greatest Generation we associate with World War II was clearly unique. The Baby Boomers that followed them set trends that we follow today. Gen-Xers helped lead us into the digital revolution. So what is it about Gen-Y (sounds so much better than “millennials”) that will define our era for those that come after?

An exhaustive study of this demographic (conducted jointly by Service Management Group, Boston Consulting Group and Barkley) identified the key words associated with this group: technology-reliant, image-driven, multi-tasking, open to change, confident, team-oriented, information-rich, impatient and adaptable.

A few of those terms surely have great resonance. “Technology-reliant?” Absolutely. The Internet became mainstream just as this generation reached college age, which means they were its earliest adherents. No wonder, then, that they’re also “information-rich,” not to mention “impatient” and “adaptable.”

The fact that they’re team-oriented is equally significant.  A new article in Investors.com analyzes the distinctive habits of financial advisers from this generation and finds that the key to performance is collaboration—in keeping with their upbringing, they thrive on constant feedback. Of course, they also differ from their predecessors in many ways. Rather than put in extra-long workweeks as their parents did, they want flexibility  in everything from days off to working from home.

Perhaps most importantly, they have a greater sense of security about their savings. This is despite the fact they potentially have a pessimistic outlook, representing a sea-change in attitude from, for example, the election in 2008.

One unmistakable characteristic in the Gen-Y crowd, of course, is the adoption of new technologies. This also has a domino effect, and banks need to stay aware of this phenomenon. For example, remote deposit capture has spread with remarkable speed, which in turn has diminished the value of branch banking — it was often the only reason younger consumers ever entered a bank. Other mobile innovations have had a similar effect, which is why digital accounts now arouse greater interest than ever before. In addition, an entire generation nursed through technological adolescence by the soothing tones of Siri might want someone like “her” guiding them through complex financial transactions.

In a larger sense, if Gen-Y is a significant part of the market now, it essentially is the market (soon). They have enormous clout already, with massive buying power out-sizing influence. They are clearly more fickle, apt to change service providers on a whim, less impressed by brand credibility, and have a more international outlook than earlier generations.

Above all, the fundamental change with Gen-Y, actually, is just that — change. This may be the first generation that can be fairly assured the career they begin with is not the one they’ll end up in. Every aspect of their lives will undergo systemic transformation, often through no fault or desire of their own, and they will need support systems, including banks and accountants, to be similarly adaptable. Financial services providers that can stay ahead of such trends will win their hearts and their business, but be warned, just keeping up will be a challenge.

 

Fast Facts: Child Identity Theft

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast Facts on child identity theft as children may be an easy target for identity theft and often don’t discover it until years later when they apply for a job or attempt to take out a loan.

FACT: One in 40 households in the US with children under the age of ages 18 is affected by identity fraud.

FACT: 56% of child identity theft cases reported misuse of the child’s Social Security Number (SSN).

  • Thieves will often create a ‘synthetic identity’ using the child’s SSN and a different name, date of birth, and address, to obtain new bank or credit accounts for financial gain, or services such as utilities, phone, cellular, and Internet.
  • Children’s information is also used to commit non-financial identity theft, including obtaining fraudulent tax returns or government benefits, housing rental, employment, medical treatment, or evading criminal charges.

FACT: Lower income families are disproportionately affected by child identity fraud, with 50% of victims living in households with incomes under $35,000.

  • Of victims who were able to identify the perpetrators of these crimes, 36% found them to be family members, and an additional 35% were family friends.

FACT: Child identity fraud can be avoided. Check early and often.

  • Keep personal information like birth certificates and social security cards locked away and sensitive computer documents password protected. Use a cross-cut paper shredder before disposing of paper documents of this nature.
  • Teach children how to be safe online, particularly while visiting unsecured websites and using social media.

FACT: Federal law under the U.S. Fair Credit Reporting Act allows for the request of one free credit report per year.

  • If your child’s identity has been stolen, contact the three credit reporting agencies to place a fraud alert, and then file the theft claim with the Federal Trade Commission.
  • Because a child’s SSN is often used as part of a synthetic identity, ask each of the three major credit reporting agencies, Equifax (1-800-525-6285), Experian (1-888-397-3742) and TransUnion (childidtheft@transunion.com), for a manual search for your child’s credit report, based only on the child’s SSN.
  • Ask each agency for its mailing address, because you will need to provide a cover letter with proof that you are the child’s parent or legal guardian.
  • You may consider placing a credit freeze to prevent thieves from opening additional accounts under your child’s name.

For more information on how to combat child identity theft and learn preventative measures, visit the Identity Theft Assistance Center website.

 

Copyright © 2013 The Financial Services Roundtable, All rights reserved.