What We’re Reading: Weekend Edition
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.
- Banks Cling to iPhone as Consumers Take to Android
According to Javelin Strategy & Research’s latest consumer survey (the group polled 3,000 consumers this quarter), Google’s Android smartphones and tablets now claim 48% of the U.S mobile market, up from 34% last year. Apple’s mobile device market share is 32% this year, up from 27% last year. (RIM dropped from 25% last year to 12% this year; Windows Mobile dropped from 13% to 8%.)
- Smartphone Seen Driving Cielo Returns to New Record
Associated Newspapers has launched a free personal finance management website. OnTrees enables users to track recent transactions on their bank accounts, view a breakdown of their spending and set up budgets and spending limit alerts. The website launched last week after a two-week trial period with Mumsnet and the National Union of Students. The service is available via iPad and smartphone apps and OnTrees says the service has ‘bank level’ security. The website has been developed using technology from American financial software provider Yodlee.
- Mobile Payments Are Surging to $1 Trillion: Are You Mobilized?
Disruptive mobile technologies are shaking up traditional payment processes and mobile E-commerce is expected to exceed $1 trillion in worldwide volume by 2017, a new study says. But another study says competing mobile platforms, including Near-Field Communications, could pose a challenge for banks and other financial institutions trying to devise the optimal mobile-tech strategies that will allow them to exploit this seismic shift to their full advantage.
- The Big News For Banks Next Year: Smaller Profits
Moody’s warns that profitability at the nation’s banks will decline for the next 12 to 18 months. That’s without the possibility of the country slipping back into a recession. The main culprit behind the banking sector’s less-than-stellar performance? Low interest rates and sluggish loan growth. The combination is taking a toll on banks’ net interest income which is a major contributor to banks’ earnings. For instance Wells Fargo and Citigroup derive more than 50% of their net revenue from from net interest income, according to the quarterly update from Moody’s. Making matters worse is that the cost of deposits is already so low that banks can’t push them much lower to widen the spread. But consider this: Banks have been reporting net income in the $25 to $35 billion range consistently every quarter since 2011–levels not seen since 2007. In the third quarter last year net income passed the $35 billion mark reaching $35.2 billion. The last time banks reported levels like that was in the second quarter of 2007.
- Holiday shoppers flock to websites
Consumers hopped online for some more Internet shopping on Cyber Monday after last week’s post-Thanksgiving Black Friday frenzy came to a close. Many started early this year: Online spending on Black Friday topped $1 billion for the first time as some shoppers turned to their computers instead of braving the crowds in person. This Cyber Monday, up to 129 million consumers were expected to hit Web merchants to take advantage of discounts, promotions and free shipping, according to the National Retail Federation. For the last two years, Cyber Monday has been the year’s biggest online spending day. That’s up from 12th place in 2006. Last year, Cyber Monday sales totaled $1.3 billion, and ComScore predicted they could hit $1.5 billion this year.
- Mobile Banking Adoption Grows
Javelin Strategy & Research’s latest report evaluates the 25 leading U.S. retail financial institutions (FIs) mobile banking offerings by comparing features, mobile access, app, Web and text banking, and mobile alerts. Mobile banking is on the rise — now used by 33% of mobile consumers, up from 24% in 2011. Of the top 25 U.S. financial institutions by deposit, about half are offering mobile person-to-person (P2P) transfers and mobile remote deposit capabilities, a figure that has more than doubled since 2011. One area of concern is that the number of consumers reporting problems accessing mobile banking services at their bank has more than tripled since 2009 from 4% to over 14% in 2012. Without access there is no mobile banking. One of the most difficult issues facing mobile banking.