What We’re Reading: IT Spending Predictions, Mobile Banking, E-Payments and Bank Fees
Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom.
- Gartner Revises Down Bank IT Spending Predictions
Most experts are predicting a recovery in bank IT spending, and an uptick is indeed underway. But according to Gartner, the next dark cloud is just around the corner. Gartner says the European debt crisis will cause a third of European institutions to fail in the next two years and will crimp IT spending for banks around the world. Other experts, however, believe U.S. banks won’t be affected for some time.
- PwC Research: Mobile Banking to Be Norm By 2015
New research into mobile banking out of consultancy PwC has generated two bold-faced headlines: mobile banking will be the norm by 2015 and consumers will be willing to pay up to $15 per month for mobile banking services that offer convenience and value. Key to the PwC research is its prediction that by 2015 mobile will overtake branch networks as the dominant channel of customer interaction with financial institutions. Another finding is that the bar is getting raised: to attract Gen Y customers, financial institutions need to improve their digital banking products. The PwC research is based on a survey of 3,000 customers globally
- Convenient, but How Secure?
According to a survey commissioned by the American Bankers Association last year, 62 percent of Americans preferred to do their banking online rather than at a branch or ATM. Banks and their online customers also lost more than $2 billion in 2010 because of payment card scams, fraudulent wire transfers and other Internet swindles, according to data from the Federal Deposit Insurance Corporation as reported by The Financial Times. Losses have declined from their peak of $8 billion in 2006, as banks have gotten better at preventing fraud. But criminals aren’t giving up and regulators have decided that current security systems based on passwords, tokens and cookies aren’t strong enough.
- Banks start playing games with your money
Financial firms are turning to games to attract a younger demographic that may be impervious to advertising. Online games afford banks a cheaper way to attract customers in an era when interest rates on savings are practically nil, debit card fees are capped and banks have small margins and little leeway to throw rewards at consumers. “It doesn’t cost much” for bankers to market this way, he says. And the ability to push games out in smart phone and tablet applications probably contributes to the interest, too.
- E-payments rapidly phasing out paper checks as an option
Even in this fast-paced, high-tech electronic age, some of us prefer letters to e-mails, phone calls to texts, and one-on-one conversations — ideally, over a cup of tea — to Skype. Likewise, some people would rather not venture into the shadowy world of direct deposit and other types of electronic transactions. Alarmed by tales of unshaven hackers with nefarious intentions, they’re more comfortable writing and receiving tangible paper checks. Increasingly, though, even traditionalists will have no choice but to accept electronic payments for everything from retirement benefits to tax refunds. While change is difficult, there are good reasons to embrace electronic payments. Among them: It’s faster. It’s safer. It’s cheaper.
- Pushing Mobile Payments — Amid Slow Customer Adoption, Companies Tout the Technology’s ‘Side Benefits’
Sprint Nextel Corp. this week tripled the number of smartphones it offers with a seldom-used technology for tap-and-go payments, as the carrier and its rivals try to convince a reluctant public to make mobile payments mainstream. Sprint, which announced at the Consumer Electronics Show that it will add LG Electronics Co.’s Viper and Samsung Electronics Co. Galaxy Nexus to its lineup, is among those betting big on the idea that people will want to use their smartphones as credit cards. So far customers and retailers have remained tepid toward the technology, called near-field communication, or NFC, prompting Sprint and others at the Las Vegas show to try a different tack: touting NFC’s “side benefits,” which include mobile coupons and digital-key replacement.
- Attack of the New Bank Fees
Dodd-Frank, here is thy sting. The 2010 legislation that limited banks’ ability to charge some fees left lenders with a choice: Take a profit hit or dream up new fees that aren’t on regulators’ radar. Many banks are likely to choose the latter, experts say. Bank of America’s since-abandoned plan to charge users a monthly $5 debit-card fee, which set off widespread public outrage late last year, was just the beginning of the onslaught, experts say.