What We’re Reading: Mobile Payments, Bank Fees and BAI Retail Delivery
Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom
- Small Institutions Face a Dangerous Technology Gap
Community banks and credit unions are well behind the innovation curve, enough to draw alarms from one of the segment’s most ardent advocates. “What is amazing about our industry is your customers and members use Amazon and Hulu and Square and we think it’s OK that when those customers and members walk into our branches they are going back 30 years,” said Louis Hernandez, chairman and CEO of Open Solutions. Open Solutions operates the DNAappstore in which smaller banks and credit unions can be certified to develop and share tech products, which are called DNAapps.
- Finance CIOs reveal plans to recover from recession
The Financial Services Report research out by IT giant Fujitsu analysed the activities and plans of 55 banks across the retail, investment and wholesale banking sectors. CIOs were asked for their top three IT priorities for the next three years. Over half (51%) listed reducing cost as a top priority, while 27% said upgrading IT systems, 22% improving customer experience, 20% mobile banking and 18% said moving to the cloud. A total of 85% said the IT department is attempting to meet the needs of the business by doing more with less. Mobile banking is high on the agenda. A significant 71% of the CIOs surveyed said mobile banking is important for customers compared to 49% that were asked the question three years ago. The biggest overall benefit of mobile banking is the ability to generate new revenue streams, with 80% citing it as a key benefit. Better customer retention is a key benefit according to 76% of respondents.
- How Checking Account Fees and Terms Vary by State
No one likes to pay bank fees. And they are even more annoying when it is clear that the amount and variety of fees can vary depending not only on where you bank, but also on the state where you live. The Pew Safe Checking in the Electronic Age project, part of the Pew Charitable Trusts, recently analyzed the fees and terms offered to consumers in the 50 states, using the country’s 12 biggest banks by deposits. Nationally, for instance, Pew found that 89 percent of checking accounts had a monthly fee. The median fee was $12, and the median minimum balance amount necessary to avoid the monthly fee was $2,000. The median length of a bank disclosure, meanwhile, was 69 pages. And the median number of “extra” fees – categories beyond the 12 most common fees charged by many banks – was 26.
- At BAI: The Mobile Wallet Wars Are On: Onsite Coverage
The mobile wallet wars will be over inside two years. That was the chilling prediction offered on Thursday at the BAI Retail Delivery conference by Carl Tsukahara, chief marketing officer at Monitise. The U.K.-based mobile apps developer recently acquired ClairMail, which had succeeded in staking out a foothold in the U.S. market “but as Monitise we are unknown in the U.S.,” Tsukahara shrugged. Tsukahara’s message to financial institutions is that the time has passed for sitting on the sidelines because non-banks – think PayPal, Google, Amazon, possibly Apple – are circling and they seem ready to attempt to disintermediate financial institutions. Tsukahara cited third-party research that showed 50% of consumers indicated a preference for PayPal as their mobile wallet provider. Thirty-percent (30) liked Google. A similar number liked Apple.
- Who’s Securing Mobile Payments?
Bank Info Security
Google and Facebook are in the mobile payments arena. But consumers still expect their banking institutions to secure the mobile wallet, says Alphonse Pascual of Javelin. What role must banks play? Pascual, who focuses in security, risk and fraud at Javelin Strategy & Research, says banking institutions must declare their roles as security experts in mobile payments, and they have to stake their claims early. As more non-traditional financial players take seats at the emerging payments table, the burden of security leadership and fraud prevention will fall on the shoulders of traditional financial-services providers, he says.
- How to Cut Bank Fees
Get ready to see banking costs and balance requirements go up while free checking is put on the endangered-species list. That’s the expensive state of banking, according to BankRate.com’s 15th annual checking survey, which concludes that banks are in a “fee-ing frenzy.” The average monthly fee on basic checking accounts rose 25% over the past year to a record $5.48, says the survey. The average minimum balance required to avoid that charge on “free” checking accounts rose 23% to $723 nationwide, also a record. Neither a checking nor basic savings account pays enough interest these days to bother calculating. Accounts still called “free” have dwindled from 76% of all checking in 2009 to about 39%, notes McBride, and will grow scarcer.