Today's Mobile Banking Apps: Table Stakes or Cutting Edge

AppId is over the quota AppId is over the quota Today's Mobile Banking Apps: Table Stakes or Cutting Edge Over the past 18 months, mobile banking applications have evolved beyond the basics to include specialized functionalities, improved user experiences and an expansion of platforms supported. A year ago, mobile remote deposit capture (RDC) was live at only five of the top 13 banks. Today, it is a 'must have' banking application that has the potential to drive revenue. Similarly, P2P is now taking center stage at most banks despite some logistical hurdles, with five banks adding this functionality in the past 12 months.How are banks keeping up with consumer demands? How are they keeping up with each other? What's next? In the third report in a series on the state of mobile banking released by the financial research and consulting firm Celent, a review of new application development is provided along with a glimpse into the future. In the 44-page report, The U.S. Mobile App Landscape: An Annual Evaluation of Mobile Banking at Top U.S. Banks, Celent found that larger banks tend to out-develop and out-adopt smaller institutions by a significant margin. “The channel is still relatively new, but leaders in the digital channel space are beginning to take offerings into the realm of value-added services that are context-sensitive, timely, and utilize big data", says Dan Latimore, senior vice president of Celent's Banking Group and coauthor of the report. "There’s a large disparity among digital offerings—industry leaders are light-years ahead of the laggards.”Below is Celent's view of the mobile landscape as it continues to evolve. As can be seen, Emerging Capabilities include a more advanced stage of interaction with more knowledge-driven tools and analytics. While some of these may not be pursued by every organization, Celent believes most will be tomorrow's standard. Interestingly, some of the functionality in the Future Focus is already being implemented on a global basis (see previous post 'Banks Accelerate Mobile Banking Innovation', June 2013). While the future may be considered speculative, some components are beginning to appear at the more progressive institutions (U.S. Bank and BBVA Photo Bill Pay) and at some of the new players such as Moven, Simple, GoBank and BlueBird (see 'Challenger Brands & Disruptive Ideas: Learning From The NeoBanks', Financial Brand, August 2013).Current Evolution of Mobile (Celent, June 2013)Key Findings of the report include:Mobile, and more broadly digital channels, have become core parts of banking in 2013. Mobile devices are now just as much a tool to keep people out of branches as they are to facilitate interaction. Consumers are more eager to engage through a smartphone, and as nontraditional players rush in to fill gaps left by legacy financial institutions, CIOs are beginning to feel the pressure to build out digital capabilities.Digital channels are in a continuous process of evolution, proliferation, and adaption. While remote deposit capture was 'new' a year ago, it is now a basic functionality. Innovation in the mobile channels is ongoing with today's innovations quickly becoming tomorrow's table stakes. Banks are moving forward in their evolution of digital channels, but it's a slow and sometimes confusing process. It’s no surprise that banks aren’t considered innovators: it’s difficult, expensive, and risky to innovate. Yet, banking is entering a time of customer-centricity, where each institution defines this concept differently.New functionality is on the horizon, but not yet front and center. This includes: 1) Speech recognition, 2) Social media integration, 3) Mobile PFM tools, 4) Easy access account balance, 5) Cardless cash withdrawal, 6) Debit card on/off switch, 7) Remote mobile bill pay, and 8) Biometric security.Mobile is definitely moving beyond the replication of online banking services and into value-added features built to serve more specific use cases and even different segments of the bank (retail consumer, small business, wealth management, commercial, etc.). As shown above, the evolution is trending towards an environment where solutions are being 'bought' vs. 'built' and where engagement of the customer on a contextual level is beginning to be achieved. Using a features and functionality scoring sheet for each mobile platform (developed as part of the previous Celent research 'What's App, Doc: A Biannual Evaluation of Mobile Banking at Top U.S. Banks'), Celent evaluated apps for the Apple iOS, Android, Safari web browser and text banking. Scores were compiled for the top 13 banks in the U.S., with banks grouped into three categories based on the following criteria:How easy was it to find the desired function?How easy was the app to use?Was the information presented intuitive from a navigation perspective?Did the app take advantage of standard OS functionality to enhance familiarity?A very in-depth evaluation was performed for the following functions on each mobile platform to determine breadth of offering. Each function was evaluated on a number of levels with values placed on each of the following capabilities: Balance inquiryRecap of previous transactionsBill paymentsMoving money (RDC, A2A, P2P, etc.)Merchant-funded rewardsPFM toolsSocial Media integrationGeolocational toolsMarketing and salesSecurityCustomer supportPersonalizationAlertsCelent grouped the banks in this report into the following three categories: most improved, noticeable improvements, and minimal/ no changes.According to Dan Latimore, "While Chase continues to build on their mobile excellence, some apps have been playing catch up." And while not making significant changes does not necessarily mean the mobile banking site was poor, standing still in today's mobile marketplace is not a solid long-term strategy.Interestingly, in an unrelated research study conducted by Xtreme Labs for the period May 18 - June 1, 2013, entitled 'U.S. Banking Apps Report: Customer Reviews', a different set of 'winners' emerged based simply on the number of positive and negative customer ratings in both the Apple iTunes Store and Android Play Store. A minimum number of reviews were required for any app and an averaging of reviews was used for scaling. While significantly less scientific than the Celent research, the Xtreme Labs research provides a social media commentary on customer sentiment around mobile banking apps.Of the largest banks reviewed by Xtreme Labs, RBS Citizens, had the highest score on the iOS platform (4.5 out of 5 and a 93% favorability rating) and one of the best scores on the Android platform (4.5 out of 5 and a 97% favorability rating). USAA, American Express, Wells, TD Bank, Chase, BB&T and Regions and U.S. Bank also scored well in this study.Conversely, PNC (not virtual wallet), SunTrust, TD Bank, Fifth Third, Bank of America, Well Fargo and USAA also appeared on the negative side for the iOS platform in the Xtreme Lab study, indicating that the mobile apps were not considered the best for everyone.Beyond the need to explore the development of additional functionality that makes engagement easier and leverages big data more effectively, Celent saw some trends they believed warrant attention in the near term.As was noted in my June 2013 blog post around Mapa Research's study of global mobile banking innovation, U.S. mobile banking apps still haven't leveraged some of the power of cross-selling from a mobile device. While the Celent research noted that many banks have attempted some form of 'product pushing' or advertising of services, there seems to be minimal leveraging of big data insights to drive contextual offers. "Splash screens and real estate crowding banner ads should be left to online banking", say Latimore. "Apps should move toward offering up product suggestions (without sacrificing user experience) as well as being able to facilitate the beginning of an enrollment process, which can be finished at the branch, over the phone or online".While it is understandable that many banks may be a bit skittish around using Apple Maps for branch and/or ATM directions given early flaws with the iOS application, using Google Maps from within the Safari browser was found to be slow and 'clunky' compared to the integrated option from Apple. Celent believes the risk may be worth it. Another option (used by both PNC Bank and U.S. Bank) may be the use of augmented reality for locational guides.App Design and Platform ChangesCelent noticed that a number of apps in the study had little or no change from the previous report from Q4 2012. While this may not seem out of the ordinary if compared to bank website redesigns, and certainly falls in line with the industry's normal 'wait and see' approach, this speed of change is not acceptable to most mobile users who are used to constant and frequent enhancements to apps.In addition, as tablets of all forms have exploded onto the marketplace, banks have done a terrible job of developing applications that take advantage of this very unique platform. Beyond the tactile and length of engagement differentiation of this platform, the demographics of the typical user (more affluent and more digitally astute) warrants a greater focus.There is no disputing that PFM on mobile has yet to gain any traction. Banks are struggling to define what PFM should be and what it should look like on different channels as well as platforms. The majority of consumers are not attracted to charts and graphs on mobile devices (there is a segment however). But PFM on mobile may provide promise if looked at in the perspective of improved receipts, budget updates and even gamification. Merchant-funded reward integration is also possible with geolocational capabilities providing the ability for immediate rewards through the mobile device.While some banks are testing some of these capabilities (most notably the neobanks like Moven as covered here in my early 2013 blog post), there is quite a bit of debate on whether the investment in development can be recouped without a value-added pricing model.According to Latimore, "Eventually, Celent imagines high-value advice on savings, alerts for overspending on a budget category, or GPS-enabled deals. The camera is another unique attribute to the mobile phone that can be used to provide a snapshot of spending."Mobile banking has quickly evolved from being a more cost effective way to handle balance inquiries to a core component of every bank's delivery network. We have moved from a transaction focus to an engagement focus, with CIOs beginning to feel the pressure to build out mobile capabilities. With basic mobile transactions such as balance inquiry and moving money, simplicity is the 'new black'. With more sophisticated interactions, the use of 'big data' for insight dissemination and solution recommendations is the key to success. In all cases, Celent found a trend away from 'bolt-on modules' to more holistic approaches that will require significant investment.While other industries have reached young adulthood in mobile integration, mobile banking is still in its infancy. With shrinking margins and more regulatory pressure, banks must determine if there is the potential for mobile services to generate revenue that can help offset development costs and replace lost fee income. Without fees from new value added services, what is the ROI of mobile banking? (see previous BMS post, 'The Revenue Power of Emerging Financial Solutions", August 2013)According to Celent's Dan Latimore, "While mobile banking definitely expands a bank's ability to reach new and existing customers, and while there is significant movement by some organizations, there is still a long road ahead for others."The U.S. Mobile App Landscape: An Annual Evaluation of Mobile Banking at Top U.S. Banks - Celent (June 2013) Mobile Banker Vendor Solutions - Celent (April 2013)What's App, Doc: An Updated Biannual Evaluation of Mobile Banking at Top U.S. Banks - Celent (January 2013)U.S. Banking Apps Report: Customer Reviews - Xtreme Labs (July 2013)Tomorrow's Mobile Banking - Hear What Top U.S. Banks are Doing to Get a Glimpse Into the Crystal Ball - American Banker Webinar sponsored by Kony (September 11, 2013)Mobile in 2013: A Digital Digest Featuring Gartner Research - Kony (March 2013)

P2P Payment Simplicity Square'd

AppId is over the quota AppId is over the quota P2P Payment Simplicity Square'd P2P applications are definitely not new. There are literally hundreds of bank and non-bank applications that allow you to send money digitally, including Google, PayPal and Venmo. Consumers also have the choice of simply writing a check as they have done for years. But, I believe Square has introduced the most streamlined app that may have the broadest mass market appeal. Imagine emailing money to another person, without a fee, directly from a debit card without a login or password. All that is needed is a debit card number, Zip Code and expiration date from the sender and recipient (only need to be entered the first time you use the service). After that, sending money is only an email address away.Compare that process to most banks, that require mobile banking sign-in (don't get me started), a test transaction and potentially more steps, even though there is normally no fee for the service. PayPal's P2P app transfers money from a PayPal account to another PayPal account, with transferring funds to a bank account being an additional step (in addition to a one-time signing up for PayPal). Google's P2P service uses email like Square, but requires signing up for Google Wallet and transferring funds to a bank account. Venmo is a growing favorite of younger people who prefer to send money via a Facebook-like newsfeed. This service also requires an application sign-up. Unlike Square Cash, most of the other P2P applications have fees attached as shown below. Square Cash, however, only supports debit cards at this time, with low weekly limits ($250) unless you provide a mobile phone number and Facebook account or verify your full name, the last four digits of your social security number and date of birth -- then the limit is raised to $2,500. If the Facebook option is selected, no information or messages are ever passed to the social channel. Square is simply using Facebook as part of authentication.Source: My Bank Tracker, September 2013I got introduced to Square Cash first thing yesterday morning with an email from fellow fintech geek, David Gerbino, who sent me $1 via email. To inform me of the 'gift', I received both an email from Dave that told me he was sending me money and an email from Square informing me of the same (shown below).To transfer the funds into my account, I simply hit the 'deposit funds' link on my computer or cell phone, and enter my debit card number, the expiration date of my card and my Zip code as shown below. That's it (and I only need to do that once). Notice how spartan each step of the process is. While there is an animated background with color and theme changes over time, there is zero unneeded information, highlighting that there are no strings attached.Upon making my deposit, I immediately received an email confirming my deposit was made and letting me know that I can now send money as well. As with the initial communication, my email and all processes are clearly optimized more for mobile than for a desktop.The Square Cash mobile app (offered in both iOS and Android versions) is very simple, with a built in step-by-step tutorial and an FAQ component. I found the desktop and mobile versions to be equally concise even though it is clear that Square Cash was built as a mobile-first application.With Square Cash, money is transferred from bank to bank with no funds ever being held in a Square account (like with PayPal). Square says that deposits will be made within 1-2 days, and I found it a bit ironic that it took me longer to log into my mobile banking account to confirm my deposit than it did to perform the entire transaction with Square.According to Square, there are no plans for ads or fees on the service as it is offered today, yet it does plan to offer premium options (I would assume that a fee could be implemented for faster transfers much like some organizations do for mobile check deposits).I believe the simplicity of Square Cash is the application's strongest benefit. While Square may not be known by everyone, it has a track record in the merchant arena and obviously plans to promote this service heavily. And unlike many of the competitors, if a payment is initiated with Square, the recipient can get their funds with minimal steps and can start using the app themselves immediately.From early comments on both the Apple and Android app sites, early buzz is overwhelmingly positive. I am sure that since it is free it helps.That said, there are still some drawbacks to Square Cash: Debit Card Only: While the limitation to only MasterCard and Visa debit cards may be viewed as a negative by some, I believe the limitation is consistent with the streamlined nature of the service. No decisions are needed as to what card or account to link. Simply link a debit card.Use of Email: Many of my Fintech friends debated on the merits of using email as opposed to SMS as the transfer media. Again, I believe this was a conscious decision by Square to appeal to the 'mass' market. While email is not used by Gen Y as much as texting, everyone has an email address and knows how to use it. The email-only decision may be adjusted over time. Again . . . simplicity. In addition, new Telephone Consumer Protection Act (TCPA) rules limit the ability to market via SMS without opt-in. Square can use email for subsequent marketing messages (such as for their wallet) or to promote the download of the Cash app like below.Limited Options: There is also no way to see a history of your transactions (except by keeping track of your emails) and you can only link one email to one debit card at this time. Again, I believe Square made a conscious decision to keep the application simple as opposed to filling it with a number of options that may be geared to 'power' P2P users.Transfer Limits: The limit on amount that can be sent ($250 a week unless additional personal information is provided and then the limit increases to $2,500) could be a drawback for some, but the service is not meant for large purchases.Fraud Liability: Square makes no guarantees in case of fraud beyond what is available on a person's debit card today. While they will reverse the transaction, that may not be enough.Funds Availability: While many fintech followers pointed to the 1-2 day funds availability stipulation as a negative, this is still faster than checks clear. However, the marketplace is definitely moving to real-time P2P so I expect Square to follow this trend over time (potentially with a 'premium' fee).Clarity: In the mission to remain a very clear app, some clarifications are tough to find. For instance, what if I want to change the debit card I have linked? (A Google developer answered this question online by referring me to www.square.com/cash/settings. As expected, the process was quite easy (even when I forgot my password).Getting the balance right between convenience and security is difficult at best and potentially a death blow if miscalculated. Square definitely broadens the reach of its new product by leveraging email as the funds transfer tool. Very straightforward . . . very simple. This highlights the paradox of mobile payments that must be overcome. On one hand, consumers find current authentication processes as being overly complicated and time consuming. On the other hand, increased awareness of cybercrime makes consumers concerned about how their security and privacy are being protected.With Square Cash, they hope they struck the right balance. If they are wrong, and a highly publicized security breach occurs, it is likely to damage Square's goal of becoming a trusted consumer payments brand.More than just a very easy way to transfer money, Square Cash represents what mobile innovation means today. Instead of trying to solve all of the world's problems in one app, companies are developing ways to use mobile to make our lives easier . . . from the customer's perspective. Square could have followed the lead of many of their payments counterparts and integrated Square Cash into their mobile wallet product. While it may have met corporate product growth objectives, it would have been a worse customer experience with a cluttered user interface. They could have carried forward their $.50 fee from the beta version of the service, at the cost of acceptance.It is clear that Square Cash is a mobile-first application. Look at all of the 'unused' space on the desktop version of the application. Square Cash is a killer app because they didn't fall into the trap of moving beyond simple elegance. When you use the application for the first time (much like the first time I used my Moven or GoBank account), the first impression is, "Wow, that was really easy"."There's a tendency to think of innovation as coming up with the latest gadget, or adding new features onto existing applications. But the concept of breakthrough simplicity recognizes that today, the most powerful forms of innovation don't manifiest themselves in new bells and whistles. They take the form of better customer experiences (or patient experiences, citizen experiences, etc.). And one of the best ways to improve any experience is to simplify it -- remove complications, unnecessary layers, hassles or distractions, while focusing in on the essence of what people want and need in a particular situation."What will be interesting to see is whether other payments players follow Square's lead toward a more simplified application. More importantly, it will be interesting to see if the banking and credit union industries will be able to focus on taking steps out of mobile and online processes for a better user experience. Jim Bruene, publisher of the heavily followed Online Banking Report and Net Banker newsletter has a discerning eye for what is evolution and what represents evolution in digital financial services. As founder of Finovate, he has the opportunity to see banking innovation up close on a regular basis. This week, however, he awarded Square with a 'Best of the Web' award. In doing so, Jim said,"It's been six months since he handed out an OBR Best of the Web award. Since then, there have been many new enabling technologies and promising applications. But with every passing year, it gets harder to raise the bar with a new digital financial product. Square did it this week. The company took P2P payments -- something PayPal commercialized in 1999, CashEdge/Fiserv bankified in 2009/2010, and Google simplified in May -- and distilled it down to its essence."He sums it up best when he says, "It's hard to imagine P2P payments being any simpler. And Square is doing it all for free". Regarding @Square Cash, the product managers for P2P at every major core provider just pooped their pants. https://t.co/vAnUksFttX— Brian Billingsley (@BBillingsley) October 16, 2013Send money via email to anybody, for free. Nice move from Square to get more people to join their ecosystem? // https://t.co/NG1HDlUK4s— Philippe Masset (@_pioul) October 17, 2013@bornonjuly4 @JimMarous @duperrieu @Square @leimer @rshevlin @sammaule My suggestion to the critics- try it. @Jack has got it goin’ on.— Matt West (@Matt__West) October 17, 2013@JimMarous the P2P game is tough, but I think it's all about text payments- Square and Google are on a goose chase. Still want Venmo— Melanie Friedrichs (@mfriedri) October 16, 2013Still it's a great play by Square. Acquire a large customer base w/ a default debit payment option. That's a good thing for Square merchants— Cherian Abraham (@cherian_abraham) October 16, 2013@sammaule @JimMarous @bornonjuly4 @duperrieu @Matt__West @Square @rshevlin mindshare leads to wallet share, engagement and usage - ask Apple— Bradley Leimer (@leimer) October 17, 2013The UX of of debit is much better than ACH (no trial deposits) and Square is making a big bet to get a two sided network going despite cost— Gus Fuldner (@gusfuldner) October 16, 2013Square's new e-mail money services is undeniably interesting, even if you do have to have a bank account to use it http://t.co/r3DKPrP6V7— Dave Birch (@dgwbirch) October 16, 2013Pay for dinner with one card, all my roommates send me #Square Cash... Simple. pic.twitter.com/RglsQj3k2t— NickBastone (@NickBastone) October 16, 2013

Banking Innovation For The Fat-Fingered

Banking Innovation For The Fat-Fingered As I have written about frequently over the past several months, I believe some of the best innovations in banking are not the result of added features and benefits to existing financial products and services, but the simplification of everyday processes that can improve the lives of a banking customer. This is what makes me such a fan of Mitek. Mitek has created solutions that allow customers to use the camera on their smartphone and tablets to deposit checks and reload prepaid cards, pay bills, get insurance quotes, open new accounts and transfer balances . . . all with a snap of a picture. No data entry is required. With mobile imaging technology, the image is captured with error correction and adjustments made, then data is extracted and put into pre-set fields on the mobile banking app instantly.What is interesting when I watch Mitek and their bank and credit union partners is that every time I think there is no more that my phone's camera can do, Mitek finds a new solution or enhances a previous innovation.In an industry where the growth of mobile banking is mirroring the growth in smartphone ownership, the benefits of using one of the most easily understood functions of a smartphone and leveraging it to facilitate a better mobile banking experience are enormous. These capabilities can attract new customer, build engagement, increase cross-selling and enhance loyalty. While what may follow may sound like a commercial for Mitek, it probably is. With so little true innovation being done by traditional banking organizations in the U.S., it is refreshing to see a company that makes innovation part of their overarching company mantra. The good news is that Mitek continues to build new solutions that banks can implement quickly and easily (i.e. U.S. Bank), making them innovators as well.To illustrate my point about the focus of Mitek on innovation, I have included a video where Jim DeBello, president and CEO of Mitek discusses innovation at his company.In a recent Forrester research paper entitled, 2012 US Mobile Banking Functionality Rankings, Peter Wannemacher wrote, "No mobile feature has made as big of an impact as quickly as the mobile remote deposit capture (RDC) functionality". The benefits of offering mobile deposit include:Mobile customer engagement: Moving the customer beyond simply checking balances.Cost reduction: While the amount of cost reduction is certainly up for debate due to the ability to reduce staff and physical facilities, there are definitely lower costs with mobile deposit than for a branch-based transaction.Revenue potential: As I outlined in a recent blog post entitled, From Free to Fee: Monetizing Mobile Deposits, U.S. Bank, Regions Bank and others have found a way to generate fee income from this value-added service.Enhanced customer experience: Anytime, anywhere simple mobile convenience to make a deposit, generate a receipt and access funds.Rather than resting on their laurels, Mitek has continued innovation within their mobile deposit solution. In the Spring of 2012, Mitek introduced the ability to leverage their mobile deposit platform to load prepaid cards using a smartphone, freeing underbanked customers from needing to use costly check cashing facilities.At the Remote Deposit Capture conference I attended in Orlando this September, Scott Carter introduced enhanced capabilities including endorsement analytics that can reduce risk, improved business intelligence that increases the ability to investigate processing exceptions, and a real-time image capture technology that provides instant feedback to the customer as to the quality of their image during the capture process (MiSnap™ SDK).In May of 2011, Mitek won their first 'Best of Show' award at Finovate for their Mobile Photo Bill Pay solution. At the event, JJ Hornblass, publisher of Bank Innovation gave the service an A+ for the 'cool factor', an A+ in the category of 'I want it' and an A+ for 'profit potential'. Nice report card at a highly competitive financial innovation showcase including dozens of other innovation introductions.The Mitek Mobile Photo Bill Pay solution enables users to pay their bills anywhere, at any time, simply by taking a picture of the paper bill with their iPhone or Android smartphone. Regardless of format of the bill, the relevant information from the bill is extracted, with fields within their mobile banking application being auto-populated. The customer simply confirms the information, schedules the payment and clicks 'pay'. Address barcodes can also be read which results in faster address verification.Beyond paying a bill, the solution allows for very easy addition of a new payee for either one-time or recurring payments. With bill payments being one of the most important engagement services to make a new or existing account 'sticky', this service is a major benefit to the bank wanting engaged customers.“As mobile banking applications have increasingly become ‘table stakes,’ it is even more critical for financial services providers to understand which new applications are truly value-added and should become a part of their core suite of mobile banking offerings,” said Bob Hedges, managing director at AlixPartners and co-lead of the firm’s financial services practice. “The valuable consumer functionality and convenience provided by Mobile Photo Bill Pay provides banks with a critical marketplace differentiator they need.”Partnering with Mitek, and leveraging its Mobile Photo Bill Pay product, U.S. Bank was the first leading financial institution to offer this innovative service to customers in early 2013. Since this announcement, several other major banks have partnered with Mitek on their bill pay solution including BBVA Compass.Mitek's mobile photo imaging technology is the foundation for a suite of solutions for the insurance industry as well including the following:Mobile Photo Quoting™- By entering a zip code and taking a picture of a drivers license, insurance ID card and the Vehicle Identification Number (VIN), a customer can get a quote in a matter of moments.Mobile Photo Payments™- By taking a picture of a blank check, automatic payments or reimbursements can be made directly using a customer's personal checking account.Mobile Photo Claims™- Filing a claim is simplified by using the phone's camera to take a picture of the drivers license, insurance card and the license plate, eliminating hundreds of possible keystrokes.Progressive Insurance was the first to market with Mitek's Photo Quoting supporting their mobile rate comparison application. Below is a video that describes the insurance industry suite of services.Enhancing the functionality of all of Mitek's solutions, MiSnap™ SDK is a technology that knows when all conditions are optimal and automatically snaps a photo of the check for mobile deposit or a bill coupon for the bill pay solution. This capability provides real-time visual feedback to the user in an intuitive and fun way, eliminating time and effort in the capture process. MiSnap is supposed to be twice as accurate as the previous manual capture process because it eliminates human error which can occur as a check or bill is being captured. This also decreases time to complete and increases satisfaction and adoption.In September of this year, Mitek again won the 'Best of Show' award at FinovateFall for their unique Mobile Photo Account Opening™solution. Mobile Photo Account Opening enables banks and credit unions to reduce the time and effort needed to open an account through the use of photo imaging. This solution could be used for mobile self-service account opening or in branches by new account personnel.By taking pictures of the front and back of a drivers license, vast amounts of validated data can automatically populate the new account application, eliminating many of the errors that occur during this process. This frees up valuable time for better customer interaction and cross-selling and eliminates mobile opening abandonment that can be as high as 70%.The Mobile Photo Account Opening solution can seamlessly integrate with a bank or credit union's  existing account opening process, assisting with identity proofing and fraud prevention through a partnership with Experian.According to the July 2013, Javelin Research & Strategy report, How to Upgrade Online and Mobile Account Opening for an Omnichannel Era, “the fact that 88.5 million Americans attempted to open an account online or with a mobile device in the past 12 months underscores how far digital account opening has come in a few short years. Nonetheless, its potential remains largely untapped, especially as consumers place growing importance on mobile capabilities.”In the same report the firm also noted, “The number one job for financial institutions should be to enable applicants to open and fund an account in one session.” In just the past couple of weeks, Mitek continued the ongoing wave of innovation by partnering with U.S. Bank to offer Mobile Photo Balance Transfer to U.S. Bank mobile banking customers.Mobile Photo Balance Transfer allows U.S. Bank customers to easily take advantage of credit card balance transfer offers from U.S. Bank by snapping a photo of an exisiting credit card payment coupon from another bankusing their mobile device and sending it to U.S. Bank to apply for a balance transfer to a U.S. Bank credit card.Using the photo capability of a mobile device simplifies the process of account transfer as well as eliminating many of the errors that can occur in the process.I am not sure what could be down the road with Mitek Systems, but it is definitely fun to watch as the ubiquity of the smartphone camera photo is used to simplify banking and improve the customer experience. Possibly, the next innovation will move beyond transactional functionality to provide a virtual safe deposit box for important documents stored electronically by the bank. Or maybe the solutions move into the payments space, allowing a customer to snap a photo of a barcode on a high priced item to enable the almost instantaneous approval of a loan for the customer. The good news is that I am sure the innovation isn't done.

From Free to Fee: Monetizing Mobile Deposits

I am not the first to propose that banks and credit unions take a harder look at mobile banking from a revenue perspective. In fact, in May, 2011, Jim Bruene, publisher of the Online Banking Report and the NetBanker blog and founder of Finovate, proposed that new pricing models could propel online and mobile services to the next level in his Online Banking Report entitled, 'Creating Fee-Based Online Services'. He stated, "Unlike the $35 debit card overdraft fee, there are rational and understandable reasons for charging fees for value-added online and mobile services." In his report, not only did Jim provide an historical perspective as to why and how banks and credit unions continually end up giving away their services, he provided 33 different services that could generate a fee and offered a perspective on the acceptance level by eight different customer segments.In my post, I am going to try to tackle the opportunity for charging a fee for mobile deposits . . . even if your institution currently does not charge for the service. I will be referencing several research reports to provide rationale, especially a recently released pricing optimization study produced by Market Rates Insight entitled, Growth and Revenue Potential of Emerging Financial Services. This 168-page study covers 13 different emerging financial services, with insights into fee optimization, targeting, institutional differences and bundling options (I reviewed this study in a recent blog post).I will also provide implementation and marketing recommendations based on my travels across the country and my work at New Control Direct and Digital. Note: A audio podcast of a 'Breaking Banks' interview by Brett King of Jim Marous and Dr. Dan Geller from Market Rates Insight around how and why banks should generate revenues from value added services is available for download here.Many banks are under substantial pressure to reconsider the economics of retail banking, especially given the decline in net interest margins and the reduced income from sources such as debit interchange and overdraft fees. While there has been a slight rebound in deposit service fees lately, many fees are associated with services on the decline (mortgage refinancing). Net Interest Margin for Banks with Assets > $10BAggregate Deposit Account Service Charges for Banks with Assets >$10BThere is no doubt that cost cutting has and will play a role in the effort to offset these reductions in income. But how much more can costs be cut without an impact on customer service or falling behind in the race for advancements in innovation and technology?Another option is to have more customers pay for services that were previously 'free' like checking accounts. This strategy has been implemented by many banks over the past few years as evidenced by the decline in institutions offering free checking today (39 percent) compared to 2009 (76 percent) according to Bankrate, Inc. Many banks have also increased their overall service charge structure as well as the requirements to avoid fees.A better option may be to build a new fee structure around emerging financial services that bring added value to the customer. Similar to options available when you purchase a car, these new fees could be singular line items and/or could be bundled into 'value packages' that the customer could select. The key is for financial institutions to no longer race to the 'free' finish line, but to assess a logical cost for benefits that bring a value to the consumer.So, how big is the opportunity for generating additional revenue from mobile RDC? According to recent research by Mitek Systems, more than 12 million mobile users have made deposits exceeding $40 billion using their mobile device. In fact, four of the top banks in the country have reported extraordinary volumes of mobile deposits when considering the relative infancy of this service.Bank of America: 1M/WeekJP Morgan Chase: >3M in MayWells Fargo: 1.4M in MayPNC Bank: 450K/MonthThe percentage of the largest financial institutions offering mobile remote deposit capture has almost tripled in the past two years, with 64 percent of the top 25 retail banks offering mobile deposit in 2013, up from 48 percent in 2012 and 22 percent in 2011, according to Javelin Strategy & Research. In addition, according to research from community bank mobile app provider, Malauzai Software, Inc., the usage of mobile deposit varies from organization to organization. Best-in-class financial institutions have approximately 20% of their active mobile banking end-users making deposits monthly and the average bank or credit union has 10% of active end-users making mobile deposits monthly. Average usage increases to 15%-17% of active end-users when looking at activity over a longer, 90-day period. The growth in mobile deposit use is not expected to subside any time soon either. In a June 2013 Celent survey of US internet active consumers, mobile deposit was the second most highly valued capability surveyed, with two-thirds of smartphone users ranking the capability “highly valuable” (6 or 7 on a 7-point scale). Among those surveyed, mRDC was more highly valued than person-to-person payments (54%) and the emerging capability to enroll a new bill payee using the phone’s camera (46%) which a handful of banks offer.“Mobile deposit, the ability for consumers to quickly and easily deposit checks using their smartphone or tablet cameras has become a must have for banks as consumers increasingly adopt a mobile lifestyle,” said James DeBello, CEO of Mitek, San Diego.Indexing the age, income, balances and behavior of the mobile deposit user against all households (index=100), a mobile deposit user is younger (by 14 years), has a higher income and loan balance, has an average checking balance, and provides interchange income that is higher than the norm. Not shown is the fact that these households have average mortgage, equity and credit card balances.Mobile deposit users, as expected, index significantly higher than the average household as to their likelihood of opening a new checking account online, and are more likely to use mobile payments, apply for a loan online, use a prepaid card and even make a payment through social media. Bottom line, mobile deposit users are heavy users of all mobile services . . . or heavy users of mobile services and heavy mobile deposit users. The research also found that these customers use the branch at a rate that is 66 percent of the average customer.One of the selling points of mobile banking has been the reduced costs of delivery of the channel. Estimated cost of in-person or call center delivery is quoted as roughly $4.00, with the cost of a mobile transaction being quoted as $.19. Even if we assume that these are accurate estimates of the fully loaded costs of each channel, an assumption that there is a 1:1 offset of transactions is definitely faulty. Taking these assumptions one step further, if we assume one transaction per month, some quote a cost savings of close to $50 per mobile customer per year. This is highly unlikely (as presented by Bob Meara, senior analyst from Celent in a recent blog post).While it is definitely easier to assume the cost savings above and to simply sell 'free', this leaves a great deal of potential revenue on the table based on recent research from Market Rates Insight. In the report, Growth and Revenue Potential of Emerging Financial Services, executive vice president and author of the report, Dr. Dan Geller, provides evidence of the willingness of consumers to accept 'value-added fees. In other words, while increasing fees on traditional services such as checking accounts will be seen as punitive and met with resistance (and potential defection), there is an opportunity to sell emerging financial services such as mobile deposit either singularly or as part of an enhanced service bundle. In the study, both the importance of mobile deposit and perceived value of the service were measured. In the case of mobile deposit (13 emerging services were evaluated in the study), this evaluation was able to illustrate that more could be charged for a premium level of service (such as same day availability) while a lower fee could be charged for slower availability.According to the study, 56 percent of consumers who did not already have the service found mobile deposit important to some degree. The average value consumers place on this service is $2.63 per month, while the 3.5 percent who found the service extremely important would pay $5.60 per month as shown below.Mobile Deposit - Level of Importance (MRI, 2013)Mobile Deposit - Distribution of Monthly Value (MRI, 2013)The MRI Study also provided these distributions for different types of institutions (national, regional, local and credit unions).Demographic VariancesFrom the perspective of demographics, it was interesting that the importance of mobile deposit was stronger for females (72.8%) than for males (64.9%) but that males were willing to pay significantly more on average for mobile deposit per month ($3.89) than their female counterparts ($1.82).In addition, as would be expected based on the Raddon Financial Group research noted above, the importance of mobile deposit as well as the willingness to pay for the convenience decreased with age, while the importance and willingness to pay increased with income (specific details of these values are available in the report).Potential for BundlingMarket Rates Insight (MRI) also developed revenue optimization scenarios for 26 different bundles of emerging financial services. Of the 26 bundles, four included mobile deposit as part of the service combination. These bundles included:Mobile Deposit with P2P Payments (optimal value of $8.38/mth)Mobile Deposit with Credit Score Reporting (optimal value of $8.57/mth)Mobile Deposit with Billpay, Low Balance Alerts and Prepaid (optimal value of $10.04/mth)Mobile Deposit with Payment Protection (optimal value of $9.23/mth)While the development of optimal bundles would differ by customer composition, type of institution and competitive scenario, an analysis such as the one below combining mobile deposit with P2P payments illustrates how the analysis was performed for each bundle. As can be seen, while total revenue could increase with the addition of more services, the incremental revenue would actually decrease due to cost of offering and lower customer acceptance of an expanded bundle. Overall Monthly Fees from Mobile Deposit/P2P Bundle + Add'l ServicesIncremental Fees from Mobile Deposit/P2P Bundle + Add'l Services"One of the most revealing and significant findings from our latest study on emerging financial services is that the principle of diminishing return applies to the bundling of financial services," states, Dr. Dan Geller, the author of the report.Of the top five banks in the US, only U.S. Bank charges a fee ($.50) for each mobile deposit. Fees have been collected since 2010 by U.S. Bank, and while not currently supporting the Blackberry platform, mobile deposits are possible via an iPhone, iPad and Android devices. As with most programs, there are daily and weekly deposit limits.Regions Bank is the other larger bank that currently charges for mobile deposits. Unlike the flat transaction fee charged by U.S. Bank, Regions has a sliding fee scale based on availability of funds. Immediate availability has a fee 1%-5% of the check amount with a minimum of $5. Overnight availability is $3 and 'standard processing' (two business days) is only $.50 per check. The 'standard' processing is actually faster than any of the 'neobanks' (Moven, Simple, GoBank) at this time. "Obviously, customers aren't going to be happy with any kind of cost you throw out there," stated Greg Melville, product owner of mobile products and payments for Regions Bank. "But if you offer a value-added service, such as immediate access to their funds, they have shown that it's something they are more than willing to accept." There was also some negative feedback initially, especially on social media, but very few of the complaints resulted in customers actually leaving the bank."FedEx pioneered the concept of higher fees for greater expediency and now consumers are expecting the same option from their financial institutions especially when it comes to mobile deposits," states Dr. Geller.Jim Bruene, who was one of the first to write a study on the potential for fee revenue from mobile services applauded Regions Bank on their decision to charge a fee, but still believed it would have been better to include mobile deposit as part of a larger bundle with a monthly subscription fee. He also believed the fee structure is overly complicated.Dave Kaminsky, a senior analyst at Mercator Advisory Group, a research firm focused on the payments industry, explained that users perceive mobile banking's offerings as worth the cost. "Customers tend to look at remote deposit capture or expedited processing as an additional value, so they're willing to pay for it—at least for now."Many of the other large banks do not currently charge a fee, citing that the value of the mobile deposit customer is higher than average (as shown above), that they are less likely to leave the bank because of this 'sticky' service, that mobile deposits reduce their costs (somewhat debatable) and that there are more transactions that generate interchange income. While each of these arguments may be true to varying degrees, I still believe needed revenue is being left on the table. Despite all of the logic above around the why a  bank or credit union should charge for mobile deposits, the real challenge is in answering the how question without alienating your customers, frustrating your sales teams or negatively impacting the growth potential of mobile deposits. If there is a question around moving from a free to fee strategy, then research your customer base, competitive position, internal capabilities and institutional priorities. If there is not enough rationale around making this transition, maybe now is not the time. According to James "Alex" Alexander, founder of Alexander Consulting, there are four options available when trying to implement fees when the market (or your current strategy) may be giving services away for free.Don't Do It: With the potential challenges to moving to a fee-based structure, maybe it is better to wait until all impacted parties buy-in. Selling 'free' is easy. Selling 'fees' is hard.Just Do It: This strategy is based on picking a date and letting customers and all employees know that there will be fees from the selected day forward. The upside is that this strategy is simple. The downside is that phones will ring and you need a very strong constitution to decipher the customer (or employee) threats from the reality. The key here is to not make exceptions, because exceptions quickly escalate into more and more fee waivers. If your entire team understands and believes the value proposition, they should be in a position to help stem attrition (there will be some).Grandfather Existing Customers: Under this strategy, current customers who have used mobile deposit will not be charged, while any customers who use the service for the first time after the transition date will be charged a fee. The challenge is that customers (and employees) talk, potentially undermining this strategy.Productize the Old and Sell the New: The challenge with any of the above strategies is that they can trigger a powerful, negative psychological response -- people don't like to have something taken away from them or to have differential treatment for a segment of the customer base. In this scenario, mobile deposit continues to be given away, but in a lower value manner. For the majority of organization, this approach is far superior to the others since the customer is given a choice of services and fee options.Productize the old: With 'basic' mobile deposit, this can be done by extending the period for funds to clear. Similar to what Regions Bank has done, change basic mobile deposit to a 7-10 day clearing period.Sell the new: For 'premier' mobile deposit, the clearing time can be reduced to 3 days or even shorter. When given the option, most customers will willingly opt for the faster clearing of deposit and will pay the fee. Another option is to include 'premier' mobile deposit in a bundle of mobile benefits as discussed above, with the option of charging an even higher fee.To fully benefit from the a fee-based mobile deposit program, the solution must be marketed to customers. For those who have used the service, it is extremely simple and time saving. For those who haven't, it could be considered confusing and even scary from a perceived security and risk perspective. Similar to making a deposit at an ATM, until a customer tries the process and realizes it works, there can be barriers to acceptance and use. Here are five quick ideas to stimulate mobile deposit usage:Free Trial: When you buy a new car, many come with satellite radio already installed and ready for use. In my case, I would never have taken this option at the time of sale, but would have most likely waited or never turned on the service. With the free trial (and very complete up-front training), I not only enjoyed the service . . . I now pay for it on a monthly basis. For mobile deposit, make a huge deal about this service an its benefits. Educate the customer up front and get them 'hooked' on the 'premium' mobile deposit service. After the trial, penetration of the service will be much greater and the opt-in rate for a faster clearing (and the fee) will be greater.Incent Your Team: Don't compensate on sales volume alone, compensate on profitability (or at least reaching a minimum 'premium'/bundle penetration benchmark). By providing incentives, your front line will spend more time educating customers and will emphasize the benefits of your 'premium' mobile deposit service or bundle. Make sure your expectations are that all new customers will begin to use mobile deposit immediately.Don't Accept Deposits: O.K., maybe a bit radical, but when a customer wants to deposit a check into their account in a branch, use this transaction as a customer education opportunity. Either arm your tellers with a tablet device used exclusively for mobile deposits (and other training) or use another available terminal in the office.Build an Educational Video: a short educational video serves several purposes including being a landing page for online and mobile banking customers, providing a location for linking email communication, and providing a tool that can be used in the branch when a customer opens an account or wants to deposit a check.Leverage Digital Communications: Don't be afraid to regularly email customers about the benefits of mobile depost. If you have implemented either a 'premier' or bundled mobile deposit product, each email will more than pay for itself. In addition, monitor customers who continue to deposit checks in your branches. Remind these customers (through email, direct mail, online banners, digital retargeting, mobile banners, etc.) that they can save time by taking advantage of mobile deposit.The key to success in generating revenue from mobile deposit programs is to 1) communicate the value of the service, 2) provide customers the option of not having to pay (or use the service), 3) reinforce the importance of 100% acceptance of the process to all internal teams through education, mandate and incentives, 4) continuously market the service, 5) build a segmentation strategy and 6) measure results."Amid the growing proliferation of digital channels and rapidly evolving consumer behavior, retail banks can no longer afford to adopt a one-size-fits-all approach in devising and enhancing their mobile strategies," says Vin Malhotra, consulting partner for Banking and Financial Services with Cognizant Business Consulting, Cognizant's consulting practice. "Providing innovative and personalized mobile services based on consumer segmentation will enable banks to not only run better by maximizing their investments, but also run differently by strengthening customer engagement and driving greater adoption of mobile banking for competitive differentiation." If properly positioned, packaged, sold and reinforced, not only will your employees and customers understand the rational of moving from free to fee, but the service will serve as a retention tool as customers become more comfortable with the benefits and value the fee options. And mobile deposit will become one of several new revenue engines within your institution.Coming Next Month: How to Generate Revenue from Mobile Bill Payments

Money2020 Attendees Share Insights and Takeaways at Bank of America Twitter Chat

AppId is over the quota AppId is over the quota Money2020 Attendees Share Insights and Takeaways at Bank of America Twitter Chat The chat was aimed at conference attendees and people who weren’t able to attend, and was designed to focus on thought leadership around payments. Unlike most chats, this event had a live audience who participated on site along with others who participated in absentia. On the live panel moderated by Peter Osborne were Farhan Siddiqi from Bank of America, Cherian Abraham from Experian, David Birch from Consult Hyperion, consultant Tom Noyes, Elizabeth Dias from Perficient, Jim Issokson from MasterCard and myself (remotely).The following transcript captures comments made during the Bank of America Money2020 Twitter chat. This transcript was edited to keep the answers to questions together. Retweets were also deleted that did not include additional content to shorten the transcript and show the flow of conversation. Metrics for the twitter chat were as follows: Total Participants: 187 Total Number of Tweets: 711 Total Reach: 574,623 Total Impressions: 6,787,715 Total Number of Retweets: 318 Bank of America @BofA_News: Welcome to the Future of Payments Innovation chat, live from #Money2020 in Las Vegas. #BofA_News is pleased to host this opportunity to connect the dots from the #Money2020 conference. My name is @peter_osborne and I’m a communications executive for #BofA. I’m joined by @FarhanSiddiqi, #BofA Strategic Planning Executive for Digital Banking.Jim Marous @JimMarous: A1: Highlight - #Amazon #PayPal #Citi #AmEx #Discover #MasterCard rocked! Showed that payments innovation never sleeps. #Money2020 Elizabeth Dias @techmktggirl: A1: Standout #Money2020 Speakers: @thefriley of @Square & @PayPal. Topics: #TomorrowsBank, Consumerization of Data & Retail 3.0 Kevin Boglarsky @kmbx2ind: #money2020A1. The keynotes even if they went a bit long. Thomas Noyes @noyesclt: A1: I thought amazon MCX and Amex did a fantastic job. Bank Innovation @BankInnovation: I enjoyed the bullishness on Bitcoin and loved the Square and Amex keynotes. - Phil Ryan, Bank Innovation #money2020 Aaron McPherson @aaronmcpherson: A1: Tokens are BIG #money2020 Jim Marous @JimMarous: A1: Loved the tweets Monday "#Bitcoin will do to money, what the internet did for information" #Money2020 Bank of America @BofA_News: A1: Sarah Friar was impressive explaining Square’s lofty mission and its simple approach – Start-Run-Grow. ^fs #money2020 Dave Birch @dgwbirch: #money2020 A1: liked the Amex stuff about the unbanked, the Zapp direct to bank account retail proposition, new PayPal stuff MasterCard @MasterCardNews: A1 - #money2020 - payments is strong. More technology to drive consumer shopping experience - making it easier to transact ngenuity Journal @ngenuityjournal: Square and Stripe -- the sweetheart keynotes of #money2020 Bank of America @BofA_News: A1: Square continues to create value propositions for customers, innovates quickly, and is making an impact ^fs #money2020 James Ray @Rockhopper08: A1 - #Money2020 presentations by #PayPal and #ISIS were most illuminating as we move into 2014. Competing visions, but must coexist. Thomas Noyes @noyesclt: #money2020 I agree that Square had the best product demo hands down... The BIGGEST play in all of commerceJim Marous @JimMarous: A1: Enjoyed the sparring of alternative payments solutions. The gloves actually came off at times. #Money2020Scott Dueweke @Scott_Dueweke: Most important trend at #money2020 is the huge number of VCs here! Xenophon Dimopoulos @XenophonD: A1: The speakers whom I was most impressed with #PayPal, #Amazon & #Stripe. Very informative!! #Money2020 Jon Stotts @JonathanStotts: #Money2020 global-focused panels yesterday were great, covering #banking, #payments & more in China, Russia India Digital Retail Apps @digitalretail: A1: I am keen on Amazon payments - they are off to a fast start with a trusted brand. Will be adding to my app methods of payment #Money2020 vadhri @vadhri: #money2020 square, PayPal and stripe keynotes were good Danny Alpizar @drat717: Funny thing square CFO produce such a good impression, she didn't show nothing new #money2020 #AmEx was the better for me Cherian Abraham @cherian_abraham: #Money2020 - MCX panel was as predictable as the Kadarshian marriage. What did we all expect would happen? Thomas Noyes @noyesclt: #money2020 MCX is NOT a shell... It is real Aaron McPherson @aaronmcpherson: @noyesclt Agree that MCX has made impressive progress - panel had a messaging issue. Where are the opportunities for #money2020 attendees? Jim Marous @JimMarous: @cherian_abraham MCX may last as long as the marriage as well. #Money2020 Aaron McPherson @aaronmcpherson: Looking forward to @noyesclt panel on tokenization - 1:40pm PST in Pinyon 4 #money2020 Paul F. Doyle @pfdvv: Concur, one of the better talks was Amex addressing the unbanked and underbanked #money2020 wadearnold @wadearnold: The quote of the year for #Money2020 - "Google is really good at collecting money from every country in the world" Thomas Noyes @noyesclt: #money2020 room agrees that the best pure presentation was Dan Schulman from #AmExBank of America @BofA_News: A1: Have you seen any products or services at #money2020 that seem particularly interesting Elizabeth Dias @techmktggirl: the @Stripe session as a top #Money2020 track as well with "FIs needing to transform into tech companies". Digital Retail Apps @digitalretail: A1 Loving the new Google Wallet approach - huge shift from a year ago; will be adding google wallet to my app method of pymnt #Money2020 vadhri @vadhri: #money2020 - demo by Loop - very impactfulBank Innovation @BankInnovation: Loop was very cool, and the session poorly attended! RT @thinkpayments: #Money2020 Good morning! I thought loop was cool. ngenuity Journal @ngenuityjournal: @BankInnovation Agree - they stood out to us too. Wasn't fair to the LP360s to put them right after 7 long keynotes w/ no break. #Money2020 Scott Dueweke @Scott_Dueweke: Impressed by the Chinese and Russian energy behind alternative payments. Easy for us to think its all about us! #money2020 vadhri @vadhri: #money2020 any presentation with less slides more demo (need to see what is possible than visionary statements) is what is needed Dave Birch @dgwbirch: #money2020 there is a long-term inexorable shift toward direct access to the funds Dave Birch @dgwbirch: #money2020 maybe in a decade Visa/MC will be switching identity instead of payments Jason A. Cobb @jasonacobb: What about the elephant in the room- offer fatigue? If offers are the driver to move from plastic & people are sick of offers… #money2020 Dun & Bradstreet @DnBUS: @jasonacobb Terrific pt. Encouraging consumers to define the offer types that interest them may help, but timing also important. #Money2020 PrairieCloudware @PrairieClouds: #money2020 skeptical of MCX as zombie apocalypse for Visa et al. Not easy to do what they are trying to do without committees/competitorThomas Noyes @noyesclt: #money2020 retailers are tired of playing by someone else's rules... The are forming the NFL of retail. Dave Birch @dgwbirch: #money2020 good point about the BRICs, who are all developing their own debit systems Jim Marous @JimMarous: Given innovations by big players, no more standing on sideline. Need to place payments solution bets. #paymentsroulette #Money2020 David W Pipe @DavidWPipe: China mobile commerce will explode as 3rd/4th tier cities come online, while so many players are only focused on the US market. #money2020 Cherian Abraham @cherian_abraham::#Money2020 - MCX is treasury groups leading the efforts. Without Marketing involvement, the customer value prop will be missing Sam Maule @sammaule: So the morning TwitterChat jumps right into #MCX - as Tom Noyes put it - MCX is real. Might take 5 yrs but it is real.#money2020 Thomas Noyes @noyesclt: #money2020 MCX addresses loyalty by agreeing every retailer is different. They can support unique loyalty services in a common way Jason A. Cobb @jasonacobb: Big innovation coming up will be more focused on access to banking 4 under served & to payments & credit for starting businesses. #Money2020 Dun & Bradstreet @DnBUS: @jasonacobb Definitely an area for startups...and also for traditional finserv players (via acquisitions). #Money2020 Sara Abernethy @saritasla: @jasonacobb @money2020 Agreed. Big data needs to be about creating experiences. Sole focus on offers is a race to the bottom. #money2020 Jim Marous @JimMarous: A2: Takeaway - #NFC was declared dead . . . again, and again, and again #Money2020 James Wester @jameswester: You can keep saying "it's not about payments," but you still have to do payments flawlessly. That's not a parlor trick #money2020 Paul F. Doyle @pfdvv: @BofA_News biggest take away...the people, the connections, the meetings #money2020 Thomas Noyes @noyesclt: #money2020 this event is the best networking event I've ever attended.. Fantastic. Elizabeth Dias @techmktggirl: A2: In the words of Sinatra, "the best is yet to come" w/ #Payments yet Q's still remain (strategy, fintech, penetration). #money2020 Dave Birch @dgwbirch: #money2020 a2 I think it's too big this year! It's hard to fit in all of the meetings and still see some of the sessions Aaron McPherson @aaronmcpherson: A2: Presenters playing it safer this year #money2020PrairieCloudware @PrairieClouds: #money2020 Biggest takeaway is the networking done. Would come again for that alone. David W Pipe @DavidWPipe: A2: Too many players still trying to solve payment - while payment isn't broken. It's about solving other problems. #money2020 Adam Snyder @snyderstrategy: A2: In the words of Sinatra, "the best is yet to come" w/ #Payments yet Q's still remain (strategy fintech penetration) #money2020 James Ray @Rockhopper08: A2: #Money2020 insights? Consumers aren't seeking to "pay" for transactions, they are seeking to transact. Payments are ancillary. Jim Marous @JimMarous: A2: Takeaway - Conference proved that among more than 4000 #fintech followers, nobody has all the answers #Money2020Paul F. Doyle @pfdvv: It is TOO Big? Yes, this was said today in Vegas...but it is about the conference, not what you might imagine #money2020 Norman Guadagno @ThinkTone: My biggest disappointment with #Money2020 was not enough bling. Needed more gold $ necklaces. Oh, and that consumers are still confused. ngenuity Journal @ngenuityjournal: @dgwbirch compares #money2020 to SXSW's growth -- need to make sure the media presence and corporatism doesn't overshadow authentic convos Kevin Boglarsky @kmbx2ind: #money2020A2. Size of the event might have exceeded a comfortable size. Both in number of sessions and keynotesmore time for networking Jim Marous @JimMarous: A2: Size of event dictated by size of challenge and opportunity in payments today. I wish I could have added one more. #Money2020 Xenophon Dimopoulos @XenophonD: A2: My takeaway is simple, if your business is in emerging payments and financial services, you should attend #money2020 Dave Birch @dgwbirch: #money2020 there's a limit to what the technologists can do in payments, there are regulatory contexts that need to be shifted Sam Maule @sammaule: There are structural and regulatory blockers inhibiting major innovation in payments. Good point from @dgwbirch #money2020 Paul F. Doyle @pfdvv: Point about regulators preventing banks from innovation...very good point #money2020 Digital Retail Apps @digitalretail: A2: shopping and paying flow will be seamless & integrated - not disjointed as it is today #Money2020 Social Network Woman @Donnaantoniadis: I was impressed with @AmericanExpress and their @serve product #Money2020 Jim Marous @JimMarous: A3: Shopper is no longer a follower, but is leading the charge with a mobile-first mentality. We need to keep up. #Money2020 Cherian Abraham @cherian_abraham: #Money2020 - Paypal defaulting to Bill Me Later as funding source in app was smart, towards building a compelling merchant value prop. Cherian Abraham @cherian_abraham: #Money2020 - Paypal knows how to manage risk, sometimes at the expense of cust experience. Bill Me Later is Paypal finetuning its economics Aaron McPherson @aaronmcpherson: A3: Shopper of the future will have vast information (some of it false) - challenge is going to be to penetrate the cloud #money2020 David W Pipe @DavidWPipe: A3: Shopper of the future will expect identical, seamless experience across all channels - at warp speed. #money2020 Thomas Noyes @noyesclt: #money2020 consumers and merchants will migrate toward value... Payments will evolve to dumb pipes... Something that should work.. Value Elizabeth Dias @techmktggirl: A3: I use the term “omnichannel shopper”: digital, frictionless #CX, value & meaningful engagement during commerce exp. #money2020 Dave Birch @dgwbirch: #money2020 i do think that payments will begin to vanish from the consumer shopping experience Perficient Fin Serv @Perficient_FS: @dgwbirch Agreed, it's all about putting it in context for the consumer or biz. #money2020 Kevin Boglarsky @kmbx2ind: #money2020 Q3. They will be more connected via apps and expectations for payments will be higher. Behind the scenes but easierD3 Banking @D3Banking: #money2020 consumer of the future will be like consumer of today. Convenience, choice and security will direct their behavior. Dave Birch @dgwbirch: .@aaronmcpherson visa/MC could switch merchant identities too and therefore anchor distributed reputation management #money2020 Thomas Noyes @noyesclt: #money2020 banks and V/MA are NOT the center of commerce.. They should work to support it. Few large companies excel at helping others Bank of America @BofA_News: A3: Connected. Informed. Having an abundance of choices. ^fs #Money2020 Dun & Bradstreet @DnBUS: High expectations: "Know me"--very location & platform. RT @BofA_News A3: Connected. Informed. Having an abundance of choices. #Money2020 D3 Banking @D3Banking: #money2020 consumer of the future will more and more expect FIs to behave as retailers. This is not good news for many FIs. Thomas Noyes @noyesclt: #money2020 networks are hard to change. They were formed around an existing value proposition... Agreement... Revenue shares... Rules . .David W Pipe @DavidWPipe: A3: I also believe any solution that tries to dis-intermediate the banks is doomed to failure. #money2020 Bank of America @BofA_News: A3: Expects simple, seamless experiences across channels and more personalized, relevant propositions. ^fs #money2020 Thomas Noyes @noyesclt: #money2020 new networks are forming and most see them though the lens of what we have today (we do that already). The basis of competition Kevin Boglarsky @kmbx2ind: #money2020Discover, Am, v & McCoy need to facilitate commerce. Not just payments. There are Benefits in using safe secure infrastructure Thomas Noyes @noyesclt: #money2020 value proposition is changing.. Consumer trust is not locked in a bank... Just as commerce value is not locked in a card Bank of America @BofA_News: A3: Data is nothing without insight and analysis. ^fs #Money2020 James Ray @Rockhopper08: A3: Future consumers will be better informed and more efficient, with higher expectations; Payments akin to electricity - utility #Money2020 Dun & Bradstreet @DnBUS: A3: Future shoppers will expect a seamless navigation btwn digital & physical. #Money2020 D3 Banking @D3Banking: Nowhere is the gap between FIs and retailers greater when it comes to serving the consumer than in how data is used. Paul F. Doyle @pfdvv: What about B2B? ...are we, as an industry giving enough attention to B2B payments at this event? Me think, not! #money2020 Elizabeth Dias @techmktggirl: "@Apple may very well be the leader when it comes to mobile commerce." #money2020 David W Pipe @DavidWPipe: A3: Secure payment will become nothing more than a hygiene factor as solutions focus on other issues. #money2020 Bank Innovation @BankInnovation: Apple, again the elephant in the room #money2020 Dun & Bradstreet @DnBUS: A3: Retailers will have to battle for shoppers' mental space as they seek to reduce irrelevant offers. #Money2020Thomas Noyes @noyesclt: #money2020 why isn't Apple doing more in payments? They have so much opportunity. They care about great consumer experiences Aaron McPherson @aaronmcpherson: @noyesclt I used to think Apple had a master plan, but now I wonder if they just have bad management. #money2020 Micah Bergdale @nycmacguy: @aaronmcpherson @noyesclt Apple getting into traditional payments would be a divergence of strategy & is not who they want to be #money2020 Aaron McPherson @aaronmcpherson: @noyesclt @nycmacguy Agreed, but I worry that they're missing the window. #money2020 Jason A. Cobb @jasonacobb: Excellent point, Apple & Google occupy the same mental space as MS and IBM did in the past as the big bullies. #Money2020 Dun & Bradstreet @DnBUS: And analysis is nothing w/out the right ?s. RT @BofA_News: A3: Data is nothing without insight & analysis. ^fs #Money2020 #Money2020 Scott Dueweke @Scott_Dueweke: The aging of the population will force mobile into the mainstream, I believe....#money2020 Elizabeth Dias @techmktggirl: A4: Relevant context around payment exp itself, and creating "openness" with apps & services that solve a true cust problem. #money2020 Jim Marous @JimMarous: A4: #Mobile pymnts need perceived security, ease of use and guarantees of cards. Authentication solution = Tipping point #Money2020 James Ray @Rockhopper08: A4: Mobile payments will become mainstream when "open architecture" permits coexistence - no walled gardens! #Money2020 Paul F. Doyle @pfdvv: Mobile payments becoming mainstream is a function of time avid famiiariyh...and consolidation of methods #money2020 Social Network Woman @Donnaantoniadis: So difficult to change consumer behavior - #money2020 Micah Bergdale @nycmacguy: Juniper Research: mobile ticketing, specifically transport, will drive adoption of mobile payments. We are seeing that in the US #money2020 Arnold Ochoa @a8a: In order to become mainstream mobile payments must be ubiquitous, convenient and add value to current payment methods #money2020 PrairieCloudware @PrairieClouds: Mobile payments tech in its current state is still a solution looking for a problem. Cards are simple, fast and secure enough. Jim Marous @JimMarous: A4: #Mobile Pymnts Mainstream: Friction needs to be eliminated for the merchant, the consumer and the bank #Money2020 Aaron McPherson @aaronmcpherson: Q4: when will mobile payments be mainstream? A4: in digital media, it already is. #money2020 Lanny Byers @lannybyers: Dave Birch at the BofA chat says mobile app is not about payment but about the experience. I agree! #money2020 @chyppings @BofA_News Thomas Noyes @noyesclt: #money2020 mobile pos pmts are dependent on value... And changing consumer behavior. Apple has highest trust to change behavior Bank of America @BofA_News: A4: Simpler, faster, secure & more value-add for the shopper & economically beneficial for merchants & financial institutions ^fs #money2020 Kevin Boglarsky @kmbx2ind: #money2020 Mobile going mainstream: have to remove a pain point for consumer or remove friction is a process. Value for the consumer? Sam Maule @sammaule: Technology impacts payments. Visa's CMO on payments strategy "We design around the flick". #money2020 Bank of America @BofA_News: A4: When we have a business model that retailers and banks can get behind… ^fs #money2020 JamesRonca @jamesronca: Mobile payments will be mainstream when they are as easy and convenient as pulling a card from your wallet. #Money2020 Dun & Bradstreet @DnBUS: A4: For mobile payments to go mainstream, need cooperation among the mobile carriers, merchants & financial institutions. #Money2020 Jim Marous @JimMarous: A4: 'Simple' is the new black with mobile. Mobile payments become mainstream when all processes are streamlined. #Money2020 Cherian Abraham @cherian_abraham: #Money2020 - To deliver customer value, one needs context..and lots of it. Which is what makes Banks and Google for example irreplaceable. Sara Abernethy @saritasla: Mobile payment alone does not change the process of checkout in retail. Shopper still waits in line with existing wallets. #money2020 Bank of America @BofA_News: A4: AND there is a compelling enough use case to incent customers to change their behavior (beyond the payment) ^fs #money2020 Bank of America @BofA_News: For mobile payments to succeed they need to be universally accepted. ^fs #money2020 Social Network Woman @Donnaantoniadis: Consumer education is key to changing consumer behavior - #money2020 Bank Innovation @BankInnovation: Huge gap in customer awareness to be overcome to advance mobile payments @techmktggirl #money2020 Cherian Abraham @cherian_abraham: #Money2020 Banks & Google are positioned in a way to capture a lot of customer context and can deliver value if & when they make use of it. Paul F. Doyle @pfdvv: If I have to think about the payment instead about the purchase, then there is a big problem with the payment system #money2020 James Wester @jameswester: Educating consumers IS important. But sometimes, maybe frequently, it's not dumb consumers. Sometimes the product just sucks. #money2020 D3 Banking @D3Banking: #money2020 How will mobile payments overcome the app apocalypse? Asking consumers to open multiple apps ultimately fails. Dun & Bradstreet @DnBUS: A4: Must have a value prop that resonates: what does this do that my card doesn't do today? #Money2020 Arnold Ochoa @a8a:I don't need different kinds of banknotes to buy in different places, why should I need a diff app to pay on different venues #money2020 PrairieCloudware @PrairieClouds: #money2020 Mobile payment apps are a failed strategy at least in the USA. Too many and too irritating to search through apps, find, use. John Muller @jmuller: @noyesclt makes the point: even with strong product, persuading consumers to change behavior is hard and slow. #money2020 Micah Bergdale @nycmacguy: @bytemarkinc processing millions of $ in mobile payments with ticketing. Amazing we are doing more than Isis & PayPal/HomeDepot #money2020 Bank of America @BofA_News: Thanks to everyone who got up early here in Vegas to join the #Money2020 Future of Payments Innovation chat.

L'innovazione bancaria: Non fatto negli U.S.A.

 U.S. has been slow to innovate compared to many other industries due to compliance and regulatory obligations, dependence on large internal and external infrastructures and the need to focus on security and privacy. In addition, the lack of a formal structure or process for innovation or dedicated funding also inhibits initiatives. Despite these limitations, the industry globally continues their effort to innovate, with varying degrees of success. Some institutions are recognized regularly for their efforts, with some regions (Asia Pacific) being hotbeds for new ideas and innovation. In addition, social media banking innovations are being found in places like India, Brazil and Nigeria.The Efma and Infosys Finacle sponsored study, Innovation in Retail Banking: Simplify Technology to Innovate provides a good perspective on global innovation trends, ways banks can overcome some of the barriers to innovation and why some banks have been so successful in their efforts. This year is the fifth year of the study and it appears that banks worldwide are increasing their investment in innovation and beginning to structure organizations in a way that is more conducive to innovative practices.While defining innovation continues to be a challenge, examples of new ideas globally illustrate the need for banks to measure not only against domestic competition but also against global standards. The key findings of the study were:More banks have an innovation strategy: 60% had a formal strategy in 2013 vs. 37% in 2009.Investment in innovation is increasing: In 2009, more banks were decreasing innovation investment than increasing. Today, 77% of banks say they are increasing investment vs. 5% decreasing (personally, I am concerned about the definition of innovation investment in this study).Most banks believe they are becoming more innovative: 76% believe they are becoming more innovative vs. 6% who said they were becoming less innovative.Performance metrics are focused on revenue and customers: Measurement of profitability from innovation is less common.IT systems and culture are the biggest barriers to innovation: IT systems were the biggest barrier to innovation for banks of all sizes. Culture and silos are issues with large banks more than smaller organizations. Silo based IT systems have a huge impact on time to market for large banks.Business processes need development: Speed, agility and efficiency is an area in need of development.Additional factors can improve innovation: Other capabilities that would improve innovation include the ability to personalize products, seamless multichannel integration and having a single customer view.The study also measured the current status of innovation deployment in mobile and online and found that:On average, out of 10 mobile and online innovations measured, deployment averages around two per bank, with larger banks averaging around 3 innovations and smaller banks having only 1 of the 10 innovations deployed on average.Mobile P2P payments have been deployed by 29% of the banks and mobile NFC payments by 23%. Mobile location offers have been deployed by 18% of the banks with an additional 51% planning on deploying.Direct-only banking has been deployed by 23% of the banks, but only an additional 21% have this in their plan.Gamification has only been used by 9% of banks."Many U.S. Banks are so invested in their legacy business models that it makes it very hard to undertake truly disruptive innovation projects. Banks in emerging markets have to be innovative to reach their customers, many of whom don't have access to the broad range of choices that Americans have." - JP Nicols, co-founder Bank Innovators Council"While there are many reasons U.S. banks are innovation laggards, I think legacy technology, regulation, compliance, and risk aversion have to top the list of reasons why we're not seeing more movement." - Bradley Leimer, Vice President, Mechanics Bank"The US is a major leader in internet innovations but, outside this, it has been behind most other regions of the world on mobile developments. This is largely due to the tariffs and state splits between cellphone usage and providers which, when you get to China or Africa is a totally different position. These newer markets do not have the old systems in place and therefore saw mobile as a leapfrog for digital services to the customer. American banks just don't see it that way, and see it more as an overlay to what's already there." - Chris Skinner, Author of the new book Digital BankThe Efma/Infosys study found that 73% of banks in the Americas (they did not break out the U.S. specifically) were increasing investment in innovation in 2013 compared to 2012. This is less than for banks in Middle East, Africa and Asia Pacific but is more than Europe. By far the biggest area of increase for the Americas was in 'channels', with the 'product' category being the lowest area of increase.Interestingly, 86% of banks said they had become more innovative in the last 12 months, though this may be from a lower base than in other regions. Again the 'channels' category was the area of highest increase, with 71% of banks saying they had become more innovative.The innovation performance self-assessment scores were the lowest in the Americas out of the four regions – just 4.08 on a scale of 1 to 7. Innovation performance in 'channels' was the highest, and innovation performance in 'products' was the lowest (a big difference from Middle East and Africa where innovation in 'products' is the strongest area for banks). Overall, it is clear that the focus in this region is on channels. In contrast to the other regions, the main barrier to innovation for the Americas, according to the Efma/Infosys study, was culture rather than IT systems, which was only the third largest barrier. Regulation was the second most significant barrier. The least important barriers were senior management and organization silos.In conversations with my counterparts in the industry, here are the barriers they mentioned."Two things. The first is that innovation is simply not in the DNA of most bankers. They've been trained throughout their whole career to identify and avoid risks, and innovation is about taking small risks and failing fast and cheaply and learning from those mistakes to get to the right answer quickly. The second is analysis paralysis. Most banks have too many silos with conflicting agendas, and that makes it hard to actually put new ideas into action. Consequently, those few innovators who do exist in banks find themselves surrounded by the 'business prevention department'." - JP Nicols"The U.S. market is plagued with many more problems than its international peers - we have a more complicated system of financial players, embedded legacy technology and processes for everything from acquisition to money movement, from telcos to payment providers - and in spite of changing client behavior, we continue to prop up legacy financial services like paper checks." - Bradley Leimer"Lethargy and lack of competitiveness. Lethargy embraces everything from 'oh, the regulators won't allow it' to 'if ain't broke, don't fix it' to 'but the legacy, the legacy, the legacy'.  If Barack Obama ran a typical bank, he'd ask 'can we fix it?' and the team would answer 'why bother?'" - Chris Skinner This year's awards were presented to the following organizations in the following categories:Product and Service Innovation: CaixaBank (Spain) and Hana Bank (South Korea)Channel Innovation: Alior Bank (Poland)Innovation in Internal Process Improvement: ZUNO Bank (Slovak Republic)Innovation in Societal and Community Impact: Standard Bank (South Africa)Disruptive Innovation in Banking: Hana Bank (South Korea)Honorable Mention for Disruptive Business Model: Jibun Bank (Japan)Most Innovative Bank: CaixaBank (Spain)To learn more about the winners and their innovations, go to www.baiglobalinnovations.com.As can be seen from the winners (and finalists') entries, much of the innovation that was recognized dealt with moving from traditional to digital and mobile channels. In addition, it is important to note the impact of culture as it relates to innovation. Not only did Hana Bank and CaixaBank have multiple entires for this award, but CaixaBank has been named the most innovative bank two out of the last three years.Congratulations to the winners and I am sure we will soon see more examples of innovation in the U.S., either by traditional financial institutions or by one of the many newer neobanks that have been created or from some of the financial intermediaries that are providing the tools for U.S. banks to serve customers better. When asked about the dearth of U.S. representation, Debbie Bianucci, president of the BAI stated, "Each year the BAI-Finacle Global Banking Innovation Awards program receives numerous submissions from innovative U.S. banks, and there have been finalists from the U.S. in both 2011 and 2012. Each year we receive over 200 submissions from banks from around the world, all who have inspiring stories to tell about how they serve their customers differently. It’s a very competitive program with just a few finalists and winners. We will  encourage U.S. banks to continue to submit their innovations for the 2014 awards program, which begins in January, 2014."  Which bank(s) do you believe are the most innovative in the United States? Who has a chance in 2014? I would love to hear your comments.

Is Your Bank Ready For Customer 3.0

Customer 3.0 begins their bank and credit union product shopping experience at their desk, in their car or on their couch, relying on friends and family reviews and published reviews across social media channels. Instead of walking into a local branch office and sitting down to open an account during banking hours, these customers purchase their banking services much like they purchase music, books or other products . . . online, 24/7. As Brett King highlighted in his book, Bank 3.0, the new customer doesn't 'go to' their bank or credit union or rely on a physical distribution network. Banks and credit unions need to find and effectively engage customers who are mobile-first and have vast choices and a 'want it now' attitude. This paradigm shift in the balance of power between banks and the customer positions Customer 3.0 as a power player who is firmly in charge of their personal buying process.To find and engage with Customer 3.0, financial institutions need to transform their back office and delivery networks and begin to think like the new customer. They need to understand that the competition is not just other traditional banks or even the digital-first 'neobanks'. Instead, we are competing across all of the touchpoints used by Customer 3.0, where experiences are shaped by the latest in retail, gaming, search and mobile technologies.In a just released research report, Say Hello to Customer 3.0, Accenture discusses the transformation of the banking customer over time and the need to move from being a financial facilitator to becoming a part of the ecosystem where Customer 3.0 interacts. The report also discusses the need to move from mass marketing techniques to a highly personalized approach that takes advantage of both structured and unstructured data to improve the overarching customer experience.Unlike the customer of the past, Customer 3.0 is not defined by traditional demographics like age, income, geographics or gender. Instead, they are defined by the way they leverage new technologies to meet their individual needs. Digitally astute, mobile-first and socially connected, Accenture found Customer 3.0 to have some generally common attributes. I provide my take on what these attibutes mean to bank product managers and marketers:Highly Informed: Customer 3.0 leverages the information available on the internet more than any previous generation. They use comparison sites and associated apps to gather insight about the banks and products they want to purchase before a bank even knows they are shopping. The change in bank shopping behavior was discussed in my previous post, Digital Shopping Has Transformed the Bank Purchase Funnel, and more generally in the Accenture report, Energizing Global Growth: Understanding the Changing Consumer. Customer 3.0 starts (and sometimes finishes) their bank shopping experience in the digital world.My Take: Traditional media is no longer enough for acquiring or cross-selling the new customer. The importance of digital marketing tools, such as retargeting, must become part of ever bank and credit union marketers tool kit.Price Sensitive: Saving money and/or 'getting a deal' is more important to Customer 3.0, who places an emphasis on a fair value exchange as opposed to simply buying on brand name or convenience alone. My Take: While Customer 3.0 is price sensitive, they will pay for a product that saves time and/or money in the long run. Banks and credit unions should not view this attribute as a message that 'free is better', but as an opportunity to build services that can be differentiated. This also bodes well for merchant-funded rewards if the offers are targeted and easy to use.Socially Connected: Today's social networks provide a double edged sword for financial institutions. While serving as a platform for sales, social media also is a platform for bad news, poor reviews and complaints to travel faster than ever to more people than ever before. My Take: Banks and credit unions need to be highly responsive to customers who use social media to air their grievances. It is usually best to respond publicly using the same channel the customer used to provide public closure. From a sales perspective, using social media for 'likes' and 'friending' is not enough. Social media should be leveraged for proactive and measurable sales efforts when possible (see Financial Brand's review of Navy Federal Credit Union's Facebook $200 million selling effort here). Channels like YouTube have also been used successfully to promote, educate and reinforce positive customer experiences.Trust Their Peers: Customer 3.0 is not shy. They are very comfortable receiving and sharing reviews on social networks and within apps wherever possible. Sites like BankRate, My Bank Tracker, Find a Better Bank, in addition to Facebook and Twitter provide the online platform to provide reviews, advice and opinions instantaneously. Recent research reinforces this trend with 14 percent of customers trusting advertisements while 78 percent trust peer recommendations. My Take: Monitoring recommendation and review sites should be part of the job of marketing and the customer experience areas of the bank. In addition, much like restaurants and retailers, banks and credit unions should seek positive online reviews from satisfied customers as part of daily social interactions.Self-Promotion: Aligned with the above attribute, Customer 3.0 will publish and promote themselves, their opinions and their decisions through social channels (myself included) while many other customer groups are much more shy about their daily activities. My Take: Some banks are proactively monitoring the social network activities of their customers not only to gauge satisfaction and to build a more robust profile but also to determine who may have the strongest 'social clout'. Moven may have the most public social monitoring feature with their CredScore. With a close eye on privacy issues, the ability to determine a customer's social influence can be a powerful marketing tool going forward.Instant Gratification: Influenced by the impact of online books by Kindle, music via iTunes and simple bank account opening by GoBank, Simple, Moven and PNC's Virtual Wallet, Customer 3.0 can be accurately described as the 'now' generation. They want to be able to open accounts, transact business, talk to customer service and view their financial position quickly, easily and in real time. My Take: Innovation in the eyes of Customer 2.0 may not be in the form of more features and functions, but simplified capabilities that occur seamlessly. From simple account openings to seeing balances without needing multilayer authentication (GoBank Balance Bar), to instant mobile receipts (Moven), banks and credit unions need to remove complexity from everyday banking, allowing customers to bank where, when and how they want. The recent innovations by Mitek Systems using the camera functionality on a phone for mobile deposits, mobile billpay, mobile account opening and most recently, mobile balance transfer exemplifies the importance of instant gratification.Security Unconscious: Despite all of the talk about public discourse around privacy and security, Customer 3.0 does not seem to be nearly as concerned about viruses, spam or phishing attacks, uploading and downloading more digital information than any other group. This comfort extends to their confidence in doing banking transactions online or on a mobile device. My Take: For Customer 2.0, the need to emphasize safety and security is less of an issue when wanting them to try new online and/or mobile services. That said, this security could be short lived if a major breach occurs within the banking industry. In addition, the comfort with sharing personal information allows financial marketers greater access to insight that can be used for improved targeting, product development and communication.To better engage Customer 3.0, Accenture recommends that financial institution become ubiquitous, melding into the digital ecosystem where Customer 3.0 already interacts. This is a 'pull' as opposed to 'push' environment, where banking develops products, services and content the customer seeks as opposed to being sold.The expectations are not being set by historical banking organizations, processes and products but by other more progressive industries that have already embraced digital real-time transactions, robust 'big data' insight, geolocational capabilities and new ways to communicate through offline, online and social channels. The retail industry has set the bar high for developing a single customer view and removing product silos. They also have made the customer aware of the new 1:1 marketing potential and the ability to listen and interact with customers on their terms, providing products and services that add value and enhance daily life.Below is a great narrative on the expectations of Customer 3.0 and the interrelationship between what they expect from banking compared to what they are already receiving from other companies they like and admire.To improve engagement with Customer 3.0, there are seven barriers that must be addressed that are inextricably linked to the banking industry's current operating model: Trust: While progress has been made to build trust within the industry, Customer 3.0 doesn't differ from other customers when it comes to making choices between different banks and credit unions. They turn to friends, family and their extended virtual community. Banks that avoid customer 'surprises' and improve transparency will benefit.Advice: Progressive Insurance exemplifies the way a financial institution can provide an unbiased perspective with their comparison shopping tool. Likewise, banks can provide tools that are unbiased as well as content that can help educate customers. American Express does this well with their Open Forum and many banks have developed educational blogs around financial planning, etc.Location: Financial institutions need to find more ways for the digital experience to provide many of the benefits of the physical experience. Customer 3.0 is reluctant to visit branches except for the most complex purposes, so the development of significantly better tablet applications that are tactile and more robust is a great place to start.Loyalty: Loyalty is harder than ever to secure since most banks are followers as opposed to leaders and have become more of a commodity or utility as opposed to being differentiated. To build stronger loyalty, innovation will become more valued and the ability to provide services beyond traditional banking will be rewarded.Price: Customer 3.0 is very aware that it is less costly to serve digitally than through a physical location, but is willing to share the benefits of this lower cost delivery. Unfortunately, serving digitally is not always less expensive, so improved customer education and the ability to generate fees from value-added services will be important in the future.Time: Finding ways to serve Customer 3.0 at a time that suits them is not difficult for many transactions, but finding a way to serve this segment when interaction is needed is not as easy. Live customer support through digital channels will become an important differentiator.Relevance: The collaboration with non-financial providers to stay relevant will become more important since Customer 3.0 wants their financial provider to be inextricably linked to their everyday lives. Location-based rewards, improved P2P capabilities, etc. are the foundation for this needed relevance.According to Accenture, banks need to engage with Customer 3.0 on their terms by:Redefining their business modelEngaging whenever, wherever Customer 3.0 desiresChanging the way products are createdUtilizing technology to gain greater insight into customer behaviorsDelivering innovative experiencesRewarding loyaltyIn other words, to defend share of wallet from organizations like PayPal, Walmart, Visa, MasterCard, Google, Apple . . . , banks will need to collaborate with the customer in a way that assists with new product development, service and channel experience. In short, banks need to move from being a financial facilitator to becoming part of the digital ecosystem where the customer interacts.The question becomes, can traditional banks and credit unions remake themselves for an environment where the customer has all of the power?

Ten Tips To Doing Finovate Like A Pro

AppId is over the quota AppId is over the quota Ten Tips To Doing Finovate Like A Pro Arrive Early: Unlike other conferences where the attendees are divided into several rooms for breakout sessions, the entirety of Finovate takes place in one big hall. Even if the crowd is divided into different viewing venues (which occurred at FinovateFall), it pays to be early, since the best viewing locations (and close accessibility to outlets) go fast. While Finovate goes out of its way to ensure the free Wifi and electricity access is widely available, it's impossible to support 600, 1,100 or 1,400 people equally.Get Connected: If you have an iOS or Android device, download the free Finovate app to better understand the event, learn about the companies doing demos, rate the presentations and to capture your notes during the program. I have yet to see a mobile event app that is so well developed. Also, sign-up for FinovateConnect so that you can set up meetings or simply communicate with other attendees.Develop a Game Plan: To optimize your experience, download the program guide and keep abreast of updates and demo descriptions on the Finovate.com site beginning weeks before the event. Determine which innovations appeal to you and decide who you want to meet with before arriving. As with anything in life, if you have a plan, everything goes smoother.Come Well Rested: The demos always start on time and they come at you at a pace that's hard to get used to. With dual podiums, a new demo comes at you non-stop every seven minutes until a break (usually after 7-8 presentations). With global presentations, some accents may be difficult to understand and some presenters try to give a 30 minute demo in 7 minutes . . . so it helps to stay alert.Network: While Finovate is known as an innovation demo event, it may even be a better financial service innovation networking event. Not only do you have several 30-45 minute breaks between demo sets to mingle with other bankers, providers and media, there is a ramped up version of networking done after the show each day. My suggestion is to arrive the night before the event begins and stay the evening after the event because some of the best interaction occurs during the evening.Bring Your Devices: Bring your computer, tablet and phone to the event. Finovate provides adequate power sources throughout the hall as well as tables for the majority of the attendees. I found using my computer was best to follow the live blogging that is done as the show proceeds as well as the tweeting (see below). For me, multitasking was a way to keep up with the fast paced demos or catch something I may have missed.Get Engaged: Thanks to a wide array of tweeters at the Finovate events, #finovate quickly becomes a trending term worldwide during the show. Don't sit on the sidelines. Share your own live updates on Twitter using the #finovate hashtag. While there is some humor shared on Twitter, many people will share opinions on the innovation as well as links to other resources. You can also follow @Finovate before, after and during the event for updates year round.Dress Appropriately: It is impossible to have the right temperature for everyone's taste. It is good to realize that, despite the weather outside, Finovate organizers have a habit of keeping the temperatures meat locker cool during the event. Therefore, it makes sense to bring a sweater or jacket.Vote: It may seem trivial as an attendee, but voting for the top three innovations each day is the foundation for the very highly coveted 'Best of Show' awards. Finovate provides a nice incentive ($5 Starbucks gift card) for ballots each day, encouraging all attendees to vote. While some great innovations have less polished presentations and some great presentations are made for less noteworthy innovations, the votes are important.Stay Connected: Just because the event ends, it is important to continue to visit the Finovate.com site after the event. Links to all of the live blogging and media coverage of the event is provided as well as videos of all of the demos (a week or so after the event). In addition, the Finovate site provides updates on the status of all of the innovations over time.There is one more tip for any credit union, banker, supplier to the financial services industry, trade media reporter or investor interested in fintech - attend a Finovate event live. It will never be boring, it will always be educational and it provides a unique venue for keeping up with the disruption (drinking game word) in the financial services industry. If you can't attend, it would be time well spent to set aside two days when the event is occurring and follow the event via Twitter, the live blogs, etc.Are there any tips I may have missed? If so, share them below and I will include them in an updated guide to Finovate.