Strategies Archives - Page 2 of 7

Op Ed: The Convergence of High-Tech and High-Touch in Wealth Management

By Jim Bruene Posted on September 4, 2012
Categories: Investment Products, Personal Capital, Personal Financial Management, Strategies

by JP Nicols

JP Nicols, CFP, is CEO of the advisory firm Clientific and has served in various industry leadership positions, most recently as Chief Private Banking Officer for U.S. Bank. He writes about the intersection of leadership, advice and innovation on his blog at jpnicols.com.

Disruption of long-held paradigms and business models are common themes in fintech generally, and at Finovate especially. Some of the most notable traction to date has been in the payments and personal finance space.

Now, innovative specialty lenders and crowdsourcing platforms are also breaching what had long been banks’ deepest moat — the ability to leverage and monetize their balance sheets.

Wealth management in the digital age
The wealth management business has been less commoditized, and some firms have deployed impressive intellectual capital to help clients grow, preserve and transfer their wealth. Despite the rise of digital personal finance platforms and tools, clients with higher levels of wealth and complexity need and want advice from time to time.

A recent American Banker article cited a KPMG survey that said 9 out of 10 banks were considering a major overhaul of their strategy, and 40% said that wealth management was essential to growing revenue. For good reason. Wealth management operations are typically efficient users of capital, represent lower risk business models and are higher producers of precious fee income.

It makes sense for incumbent firms to increase investment in higher-margin businesses while new entrants are left to focus on lower-cost solutions. This is the classic pattern of disruptive innovation as described by Clayton Christensen and others.

Then as these new entrants gain market share, they inevitably move upmarket. In fact, that is already happening.

From the underbanked to the overbanked
There has been considerable discussion about the unbanked and underbanked, people who either cannot or will not use traditional financial institutions. Prepaid cards, payday loans, check cashing, remittances and other services that fill the gaps have seen new innovations and new investments from both inside and outside the industry.

On the other hand, wealthier households, or the overbanked, have no shortage of providers eager for their profitable business. But disruptive forces are at play here from two areas:

Smaller firms which differentiate with high touch, lower client/advisor ratios, better defined market niches and more responsive service.
High-tech competitors with better user interfaces, more robust web and mobile tools and sophisticated analytics.

The convergence zone
The effectiveness of those two approaches varies somewhat along demographic lines, but it’s not as simple as assuming all older customers prefer high-touch while the younger set always wants a technology solution.

Web and mobile adoption rates in older age groups rise with higher income, and affluent customers are looking for something more than a stock jockey with a briefcase full of papers.

On the flip side, even the savviest do-it-yourself millennial wants help from an expert every now and then, and simply replacing the irrelevant stock jockey with a prettier, but equally irrelevant, screen full of dials and charts isn’t enough for many.

So these powerful forces are beginning to converge in a couple of exciting ways:

Enterprise solutions have been gaining traction at Finovate. Past alums like InStream and Balance Financial created inviting portals for advisors to manage their business and collaborate with clients in ways previously not possible.
A few firms have built their own advice and back-office platforms behind compelling interfaces. Finovate alums like Wealthfront and Betterment offer low-cost professional money management to every investor.

Three firms to watch at FinovateFall 2012
I will be paying particular attention to three firms that are contributing to the convergence of high tech and high touch at FinovateFall 2012:

Personal Capital a Best of Show winner at FinovateSpring 2012, leverages it’s PayPal and Intuit DNA (CEO Bill Harris led those companies too) to create what they call a "next-generation financial advisor completely personalized around you." Users can easily get started for free with their attractive and useful PFM tool, then upgrade to their money management services.
MoneyDesktop is another Best of Show winner at Finovate Spring 2012 that brings a slick mobile- and tablet-friendly PFM desktop with customizable widgets as a white label solutions for FIs stuck with outdated interfaces. They recently acquired MoneyReef to further bolster their mobile PFM offerings.
Actiance: Fear of running afoul of FINRA, SEC and other compliance requirements is one of the barriers in large wealth management firms’ struggle to be relevant in social media, and significant intellectual capital too often remains in proprietary channels as a result. Actiance has been a very visible solution provider with their Socialite platform, and at Finovate they will be showing off their integration with Salesforce to further integrate social data.

I will be back after the show with my thoughts on the latest developments in wealth management and track th
e convergence through integrated offerings and enterprise solutions.

Changing the world is hard. Changing bank IT departments takes a little longer.

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Notes:
1. Image licensed from ShutterStock
2. For more on Personal Capital and the rise of the truly virtual financial institution, see OBR #198 (Oct 2011, subscription)

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Looking Forward to Ad-Supported Banking

By Jim Bruene Posted on February 21, 2012
Categories: Cardlytics, Rewards Programs, Strategies

Last week, Christophe Langlois @Visible-Banking tweeted a question about the value of in-statement rewards programs:

And my answer:

My response was partly 140-character hyperbole. It’s Twitter after all. But after sleeping on it, I think what I said might actually be true.

What’s the biggest problem facing online/mobile banking?

The cost to the bank. Always has been and always will be. And it’s not going to get less expensive anytime soon (note 1). Every time we write about the next must-have online bell or mobile whistle, it just gives bank CFOs another gray hair.

Up until recently there were only three ways to pay for these extra expenses:

Charge direct fees for the channel, which customers hate
Cross sell, which is hard to attribute solely to the online channel
Cover the costs with other revenue streams

The vast majority of banks, and every one in the United States, took the last approach. Unfortunately, this can lead to unwise pricing decisions such as the one that gave rise to the “$35 cup of coffee.”

But thanks to Cardlytics, who recently took home Best of Show honors at Finovate Europe, and others, we are entering into a new era of advertising-supported banking. And that could finally make direct banking a revenue generator on its own. Not enough to pay all its costs, but enough to alter the game.

Let’s assume banking customers redeem 2 offers per month and the average commission to the bank is $1 each (note 2). That’s $2/mo in new revenues, almost entirely attributable to the online/mobile channel (note 3).

A bank with 25,000 online banking customers would earn about $600,000 annually. That will buy a several bells and a decent whistle.

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Notes:
1. It can be argued that in the long-term support costs per banking customer will fall dramatically as branches and human customer support are downsized.
2. Using Aite’s forecasted $1.7 billion in-statement commissions in 2015 and dividing by 70 million online banking household (link).
3. You have to have the debit or credit card too, so the revenue might need to be shared with the card P&L.
4. We published a report on in-statement rewards in 2011 in our Online Banking Report.

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India’s ICICI Bank Launches Online Banking via Facebook

By Jim Bruene Posted on January 17, 2012
Categories: Facebook, Social Media, Strategies

You can really see how the global financial crisis has stunted banking innovation by looking at how little Facebook has been used as a delivery channel (note 1).

The first financial institution in the world to offer Facebook account access, KeyPoint Federal Credit Union (powered by MShift) launched in Nov 2007 (post here), when the social network had “just” 50 million users.

In the ensuing 4+ years, despite an increase of 800 million more users, not a single major financial institution has followed in KeyPoint’s footsteps (see note 1).

Sure, there’s been some impressive Facebook marketing campaigns. Chase, American Express, and Capital One have all passed the 2-million “like” mark. But no one allows customers to check their balance/transactions right from within the social network (via a Facebook app).

But the drought ended this week, when India’s second largest bank, ICICI Bank, launched comprehensive Facebook services including account info (screenshot #1), offers (see #2), and a general jump-page to the bank’s main website (#3).

The new Facebook initiative is currently featured in the first promotion served by the bank’s homepage (#4, note 2).
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1. ICICI Bank’s Your Bank Account page in Facebook (link, 17 Jan 2012)

2. Exclusive offers Facebook page (link)

3. Bank-on-the-go Facebook page: Serves as a launching pad to the specific areas on the bank’s main website

4. ICICI Bank displays a Facebook promo when landing on its homepage

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Notes:
1. Having been a product manger for several large banks, I get why the “Facebook project” hasn’t moved to the top of the queue; basically, lack of demand. Facebook may have nearly a billion users, but only a few percent are ready to bank there because it’s not seen as secure/private and it’s a place to connect with friends (see note 2). But despite the current lack of demand, we are confident that Web services, including banking & payments, have a promising future on the platform.
2. ICICI Bank tackles security via a prominent mouseover on the main page:

The ‘Bank Account’ app is hosted on secured ICICI Bank servers and is made available on Facebook through a secure SSL connection. ICICI Bank has not transferred any data to Facebook. Your bank account information can only be accessed by you through your ‘Bank Account’ app on Facebook after successful registration which incorporates strong 2-factor authentication and setting up a personalized password. As long as you don’t share this information with others, no one can access your account through Facebook.

Currently through your ‘Bank Account’ app on Facebook you can view account details, mini statement and few service requests like applying for debit card.

This app lets you access your information only after authenticating your Debit Card Number and Password. As long as you don’t share this information with others, no one can access your account.

3. Viewing the page from a U.S.-based IP address.
4. We cover all the channels in our subscription newsletter, Online Banking Report.

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Is BancVue’s Kasasa to Checking What "Intel Inside" was to PCs?

By Jim Bruene Posted on January 11, 2012
Categories: BancVue, Deposits, Checking, Savings, CDs, Strategies

I just spent the better part of two days attending BancVue’s monthly client/prospect meeting called BTAN (note 1). I knew they would have high-energy presentations, great ideas, and outrageous antics; after all, I’ve seen them take home three Finovate Best of Show trophies. They know how to drive a point home.

But what I didn’t expect was to come home believing its Kasasa strategy might really work. Kasasa launched at FinovateFall 2009 (video here) and is the first major attempt to create a nationwide brand around the checking account. They are trying to do for checking what Visa/MasterCard did for the credit card or what Intel did for PC manufacturers with “Intel inside.”

One very different element here is that BancVue is creating a national brand exclusively for use by community banks and credit unions. Large banks are viewed as the enemy (see inset from BancVue’s “about us” page) and are not allowed to “stock” the Kasasa brand.

On the surface it seems impossible. How could hundreds, if not thousands, of proud, local financial institutions — many who’ve been building a local brand for many decades — unite under a nutty brand called “Kasasa” of all things?

But is it crazy like the iPod was crazy? Smaller banks and credit unions are being taken to the cleaners by the big banks, losing more than half their market share in the past two decades. They have the local ties, the human connection, but it is usually hard to maintain the product set, marketing power, and online/mobile UI, of Bank of America or Chase.

But what if someone was able to level the playing field with best-of-class products and combine the marketing power of 1,000 financial institutions into a national brand? (note 3) Then the community banks/CUs could go ahead and compete on service, price, value and local connections.

It sounds too good to be true, really. And I was skeptical when I heard the pitch two years ago. But after seeing how BancVue has signed up more than 600 FIs for rewards checking, hit #23 in the Inc 500, and witnessing their passion in person, I think they have a real shot.

Bottom line: It takes a long time to build a national financial brand, especially one centered on lowly checking accounts. Other than PayPal, what’s the last one you can think of? Capital One, founded 1988, maybe. Discover Card, launched in 1985, perhaps (note 4). And I can think of a hundred reasons why it won’t work.

But Kasasa is definitely out of the gates and gaining traction. Having just finished my review of the most important trends of 2011, I have a feeling Kasasa could make this list in 2012 or 2013.

——-

Kasasa product set (11 Jan 2012)

Kasasa products dominate the homepage of Farmers Citizens Bank (link)
Question: Do Kasasa ads clutter the Farmer’s homepage? No more than any other promotion. And they are at least attention getting.

Landing page at Farmers Citizens (link)

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Notes:
1. I attended the event at the invitation of BancVue. But I am not consulting for them or their customers. BancVue is a customer of The Finovate Group for our event and our published reports just like hundreds of other companies. However, they did feed me really well, which, as my family will attest, is a powerful motivator in my life. So I can’t say I’m totally unbiased.
2. After hearing the detailed reasoning behind the branding decision, I actually think the Kasasa choice makes sense. But you’ll need to see the presentation to get it. The Financial Brand breaks it down here.
3. BancVue says that with 1,000 financial institutions offering Kasasa it would be bigger than the largest U.S. bank in branch network and marketing budget.
4. I can’t think of any major national banking brands that have appeared in the Internet age other than PayPal, and perhaps NetBank (RIP). ING Direct made it, but they were a spinoff of a powerful international brand, and even then they spent more than a BILLION in the United States alone during the past 12 years making ING Direct a household name. E*Trade, Ally also come to mind, but the former is more associated with brokerage and the latter is a name change from GMAC. Bank of Internet is doing well, but is hardly a household name.

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The Demise of the Branch (for real)

By Jim Bruene Posted on December 20, 2011
Categories: Branch Banking, Strategies

In Demise of the Branch, a report we published in April 2006, we opined that the branch’s influence in retail banking had peaked. But it was perhaps a bit premature. It turned out that strong retail banking revenues (for example, interchange and overdrafts from the massive uptick in debit card usage) would fund the overbuilt branch network for a few more years.

But the good times are over, at least from a brick-and-mortar perspective (see note 1). And as much as I feel for the tens of thousands who will lose jobs, based on my personal experience, I am OK saying good riddance to the branch. While the people I’ve encountered have been super friendly when I hand over deposits, when there has been even the slightest complication, the experience has ranged from poor to abysmal.

And it wasn’t that the people were uncaring or unintelligent. In fact, usually they seemed to be trying hard to solve things, but just did not have the support they needed (training, systems, empowerment, whatever). Overall, my branch banking experience has been a net negative for my feelings about the banks I’ve used (note 2).

Online and mobile have already replaced much of the the transactional and informational activity. And we are fairly far along on the path towards replacing customer service and sales with digital alternatives. But how do you replace the important brand-building benefits from a high-profile physical presence? In other words, what’s the digital equivalent of the corner branch?

The answer is right in front of you. If your best customers interact with their phone and computer much of the day, you need to be where they see you. That starts with an awesome website, brilliant mobile app, and tight landing pages. But it’s much more than that. It’s being in search results. It’s serving ads where prospects read the news. It’s being in the news feed itself because you do interesting things. It’s getting permission to market to the customer’s inbox or message them on their mobile.

You already know all this. But now it’s time to really focus on the digital channels. And when there’s not enough money to go around, I hope there is serious consideration to downsizing the branch network. Because the last thing you want to do in 2012/2013 is put forth a half-hearted online/mobile offering.

Have a great holiday. And thanks for reading. You have no idea how much I appreciate it! — Jim Bruene

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Notes:
1. I still can’t prove that U.S. branch banking has peaked, but if you look at the overall P&L of retail banking going into 2012, something has to give. And I think the branch system is a prime candidate for “right sizing.” And I’m not saying the branch disappears entirely, at least not in my lifetime. It’s going to be a gradual decline in numbers, employments, square feet, sales, and so on.
2. Mostly, I’m talking about personal experiences at various large banks. However, the first 10 years of my adult life a credit union was my primary financial institution. It’s where I got my first credit rejection. (Because I had no credit history, the CU at my office wouldn’t give me a credit card despite my new job as an engineer in a Fortune 50 company. But a big bank in a neighboring state did.)

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Is "Family Security" a Product Opportunity for Online Banks?

By Jim Bruene Posted on December 13, 2011
Categories: Identity Theft, Security & Privacy, Strategies, Student Banking, Youth market

In the digital era where teenagers might keep their bank accounts for the next 80 years, it’s important to offer services that encourage kids to sign up for a bank account. There are some cool ideas around financial education, money management, and gamification which we explored in our Online Banking Report earlier this year (note 3).

But what’s the one issue that really drives parents’ behavior towards their kids? Fear. Fear for their physical safety on the way to school, fear of bad influences at school, and fear of the idiots kids will encounter online. The list goes on and on.

You may not be able to protect kids from Facebook bullies, but you can help on the money side. Financial institutions can offer services that help protect children from online scams, ID thieves, and so on. You can offer prepaid cards with controlled access. You can keep parents apprised of their child’s spending so they can recognize early-warning signs of dangerous behavior.

It’s win-win product development. Parents will pay for it through fees and/or loyalty. You’ll lock in more youth accounts, and everyone will get a bit more peace of mind.

Bottom line: While family financial security is a promising area, it’s no small project. Most banks will need partners to provide at least some of the services (credit-reporting specialists, account-aggregation providers, data analytics, and so on). But once the data feeds are available, they can be bundled together into different packages for various segments.

And mobile delivery will be crucial. For inspiration, look at Life360, a fast-growing mobile service whose core offering is GPS tracking for family members (see screenshot below, note 2). Life360 is free, but offers an optional identity-theft protection family-plan at $14.95/$19.95 per month. Since going free, the company has mushroomed to 6 million families.

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Life360 is a fast-growing startup offering “mobile family safety” (13 Dec 2011)

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Notes:
1. Graphic: From the FTC-sponsored one-day seminar on childhood identity theft this summer (link).
2. For more info on Life360, read the series of Techcrunch posts on the company.
3. For more on family/youth banking, see our recent Online Banking Report (subscription).

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New Online Banking Report Published: True Virtual Banking Has Arrived

By Jim Bruene Posted on November 3, 2011
Categories: Launches, Online Banking Report, Personal Capital, Simple, Strategies

I still remember the day in early 1999 when I met with Elon Musk and his 3-person team in a borrowed conference room in Palo Alto. They were plotting the complete and total disruption of the banking industry and fully expected to be one of the largest five U.S. banks by now.

The startup was named X.com and its original business plan was to acquire one or more existing banks to provide the credibility, and deposit insurance, of a traditional bank. While I was in awe of their ambition, I thought the plan had a flaw. I told them they’d be better off staying virtual, with no bank ownership slowing down their decision making and ability to take risks.

I’ll never know if they would have listened to me, because soon thereafter X.com began experimenting with P2P payments via email, and they saw that it was going to be huge. So they jettisoned banking, merged with PayPal, and the rest is history.

Why the reminiscing? That was the last attempt by a major tech startup to take on the U.S. retail banking industry via virtual channels (note 1).

Fast-forward to 2011: At this year’s FinovateFall, we saw the launch of not one, but two well-funded attempts at disrupting the incumbents. One through debit/checking/savings and the other through wealth management:

BankSimple: DNA from Twitter, analytics, and consulting
Personal Capital : DNA from Intuit, PayPal, Everbank and Fidelity Investments

Both companies are what I call True Virtual Financial Institutions, meaning they are complete front-ends to your money, including transaction capabilities and customer service, but they outsource the actual holding of customer funds to fully-regulated partners which pass FDIC/SIPA protections. This allows the newcomers to focus on user experience and service while moving much faster without the regulatory friction experienced by traditional financial institutions.

Others well-known companies using virtual models: Betterment (also profiled in the report), iBankUp.com (Plastyc) and Perkstreet.

Note to bankers: True virtual banking needn’t be limited to tech startups. These techniques can be employed by traditional companies to expand beyond regional or industry boundaries. The report outlines seven models for doing just that.

__________________________________________________________________

About the report
__________________________________________________________________

True Virtual Banking Has Arrived (link)
BankSimple, Personal Capital, Betterment and others go branchless,
paperless and “bank-less”

Author: Jim Bruene, Editor & Founder

Published: 1 Nov 2011

Length: 48 pages

Cost: No extra charge to OBR subscribers, $395 for others here

____________________________________________________________________

Notes:
1. I should add that Lending Club, Prosper, Zopa qualify as major entrants bound on disrupting banking from the lending side.
2. BankSimple, Betterment, Personal Capital and Plastyc FinovateFall 2011 demo videos are available here.

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RIP Debit Fees: The Winners and Losers

By Jim Bruene Posted on November 2, 2011
Categories: Credit/Debit Cards, Debit Cards, Fee Income, Public Relations, Strategies

The debit card fee debacle was an interesting drama to watch. I’m sure there are lots of lessons here for a future biz school case study. But really, was $5/mo for a service that many consumers use daily, such a big deal that even Obama had to call BofA out? We spend two or three times that each month on extra pizza toppings alone, but I don’t see anyone bad mouthing the pepperoni industry.

While it’s clear in retrospect that BofA should have played this differently, rolling out the price increase gradually for instance, or upgrading its debit card product at the same time (note 1), the bank was at least being up-front with its pricing and reasons.

And the whole episode is not just a loss for BofA, but for the whole industry, as one its most popular products is turned into a regulated utility with Durbin controlling prices on the merchant side and public opinion squashing fees on the consumer side.

Here’s the winners and losers from BofA’s capitulation on debit card fees:

Losers

Big banks/shareholders: Obviously, the big banks who were all (except Citi) testing various fee options, miss out on added revenues in 2011 and for however long it takes before they implement other less-transparent price increases. And of course, BofA loses the most as it took the brunt of PR damage and now every pricing move it makes will be put under a microscope.
Small banks and credit unions: The $5 fee was a windfall for small FIs in their marketing war against the big banks. Now what’s the rallying cry for Bank Transfer Day? (And many small FIs would eventually have hopped on the fee bandwagon once the consumer backlash faded.)
Government/taxpayers: The big banks employ millions directly, and millions of other jobs are indirectly supported by banking revenues. If this leads to an industry-wide layoff (note 2), it could add hundreds of thousands to the unemployment roles just in time for the 2012 elections. And the whole anti-bank rhetoric from Congress and the Administration, along with the implied threat of more price controls, makes it harder for banks to raise capital, weakening an already fragile ecosystem. Does anyone really want to risk a repeat of 2008?

Winners

Merchants: Widespread debit card fees would likely have caused a reduction in their use and a corresponding increase in the use of cash, checks and credit cards which would have driven merchant costs up.

Mixed

Consumers: Short-term it’s a win. The grass-roots victory feels good and avoiding the $3 to $5 monthly fee is nice (it just about covers that Netflix price increase…so you can keep getting the DVDs in the mail). But longer-term, it’s probably a wash. Banks need to improve revenues, or they will either have to cut services, lay off employees, and/or find sneakier ways to raise prices ($40 overdrafts anyone?).

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Notes:
1. We recently looked at optional fee-based services banks could build using remote banking value-adds. See our May 2011 Online Banking Report (subscription).
2. I’m not predicting layoffs. Honestly, I have no idea. There are way too many factors at play to make a direct connection. But certainly, the one-two punch of interchange price controls combined with the fee backlash, make cost cutting seem the more palatable course of action to improve profits. And to the extent that smaller players pick up incremental business, they could hire a good chunk of those laid off.

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Heated Tech Frenzy During Next Two Weeks

By Jim Bruene Posted on September 9, 2011
Categories: Strategies

This is my favorite time of year. The kids are back in school, we finally get summer in Seattle (yep, the weather again), and there are 150+ tech product/company launches in the next 12 days.

First up are the general tech events next week in the Bay Area: TechCrunch Disrupt and Demo. Then the following week, it’s fintech’s turn with our Finovate in NYC Sept. 20/21 and the SIBOS Innotribe competition in Toronto. And don’t forget, BAI Retail Delivery is just around the corner, Oct. 11-13 in Chicago.

It will be interesting to see if there will be an innovation du jour this year. Unlike a few years ago, when mobile, online PFM, and social media all hit the scene at the same time, it’s harder to put labels on the class of 2011.

But in many ways, this month’s launches are more important than what we saw several years ago. Instead of general “blue sky” advances, we are seeing specific, actionable and profit-generating applications.

Mobile is the best example. Just three years ago, it was novel to show a bank balance on a cell phone. That was helpful for users, but didn’t do anything (positive) for the bank’s bottom line. Now, smartphones are used to deposit checks, geo-locate cardholders, and acquire customers, all potential profit drivers.

For all you tech observers, butter up the popcorn and enjoy the show.

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New Online Banking Report Published: 2012 Guide to Remote Banking Products, Marketing, & Strategy

By Jim Bruene Posted on August 29, 2011
Categories: Online Banking Report, Planning, Strategic Planning, Strategies

It’s 479 days, 2 hours and 54 minutes until the end of the Mayan calendar* and you know what that means? Yep, it’s time to start putting together your 2012 business and marketing plans. And don’t think that the end of the world is any excuse to hold back.

As usual, we’ve got your back. Announcing OBR’s 2012 Online/Mobile Banking Planning Guide. Its goal: to provide a resource for financial institution managers (product and/or marketing) to help prioritize potential remote-banking projects for the coming year.

The latest version was released just this afternoon.

______________________________________________

About the report
______________________________________________

2012 Product, Pricing & Strategy Guide for Remote Banking (link)
Preparing for the mobile-first future

Author: Jim Bruene, Editor & Founder

Published: 29 Aug 2011

Length: 76 pages

Cost: No extra charge to OBR subscribers, $695 for others here

_______________________________________________

The report contains a list of every idea that has appeared in Online Banking Report or this blog. There are more than 1,000 possible tactics listed in the current report, divided into the following categories:

1. Product tactics
A. Checking & transaction cards
B. Deposits & savings
C. Loans & credit
D. Personal finance management
E. Investments & insurance
F. Payments & transfers
G. Mobile banking/payments
H. Family (children, teens, tweens)

2. Online sales tactics
A. Increase online sales
B. Selling behind the password
C. Enter new markets & segments
D. Attract new residents (movers)
E. Increase referrals and word-of-mouth
F. Social media and Web 2.0
G. PR: appeal to community/shareholders

3. Service, security & retention tactics
A. Increase satisfaction levels
B. Enroll more online banking users
C. Encourage/reward self-service
D. Encourage paperless adoption
E. Address security concerns

4. Small business

5. Fee-based planner

6. Messages & alerts

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*We don’t want to feed into the Mayan calendar hysteria, but you might want to pick up these super cool keychains here.

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Mobile Banking Changes Everything, or Nothing

By Jim Bruene Posted on August 2, 2011
Categories: Mobile Banking, Strategies

I’ve been thinking about mobile delivery a lot in the last few years. Two years ago, I opened presentations with “mobile is the new online.” But lately I’ve changed that line to:

Mobile is ~~the new~~ a better online

Equating mobile banking to online is selling it short. Really, it’s much better than online. I believe that in the not-too-distant future (i.e., 10 years out), we’ll come to look at online as an extension of mobile, not the other way around.

Here’s why mobile is not only better than online, but also changes everything about remote delivery:

Mobile knows where you are
Mobile is with you all the time
Mobile has a voice option (duh)
Mobile can be more secure
Mobile can interrupt you (text message, on-screen alerts)
Mobile can use the accelerometer (shake to log in)
Mobile has a camera and an input device
Mobile will be able to communicate directly with other devices (NFC)
Mobile will allow you to pay at the POS and be your primary wallet and ID too

No doubt, your product folks have their work cut out for them integrating mobile into all that you do. Yet, despite all the hype, mobile changes nothing about your underlying banking business:

Everyone will offer it, so you won’t gain market share
Everyone will price it the same, so you won’t gain incremental profits
Customers will expect it, so you won’t improve customer satisfaction

Bottom line: Ultimately, banks will win or lose based on how well they execute on gathering deposits, making loans, facilitating transactions/payments, servicing customers effectively, and pricing it all correctly (note 1).

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Notes:
1. Graphic image from Chase (click on it to go to the site)
2. And I thought of adding, “keeping regulators happy.” But that probably goes without saying these days.

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Verity CU Asks "What are the Ten Most Interesting Products of 2011"

By Jim Bruene Posted on July 22, 2011
Categories: Strategies, Verity CU

I try not to ride the coattails of someone else’s blog post, but here I go doing it anyway, because it’s a great mid-year question.

Shari Storm, published author, Filene i3’er, and grand master financial marketer, asked the Internet to help her round out the list of ten most interesting (financial) products of 2011.

Here’s what she’s found so far (note these aren’t necessarily new in 2011, just interesting this year; parenthetical comments are mine):

Mobile banking (note 1)
Mobile remote deposit capture
Personal financial management tools
Personal bookkeeping (e.g., Balance Financial)
Rewards checking (including in-statement merchant-funded rewards)
Mobile apps that encourage you to build your savings account
Short-term fixed-rate second mortgages

For what it’s worth, in the comments I suggested (alpha order):

Anti-virus for your card charges (e.g., BillGuard)
Bill statement storage online (e.g., doxo, Manilla)
Buy online/pay offline services (e.g., PayNearMe at 7-11)
Mobile barcode scanning for shopping comparison
Tablet banking
Tween/teen banking/prepaid services

Give Shari some ideas here, so she won’t be mad that I’m stealing her post.

Notes:
1. Verity launched May 2 and already 1,500 of 25,000 members are using it (about 6%).

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