What We’re Reading: IT Efficiency, Wal-Mart and Mobile Payments
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.
- CFPB and DOJ Sign Memorandum of Understanding
The Consumer Financial Protection Bureau and the Department of Justice agreed Thursday to collaborate on enforcing fair lending laws to avoid duplicating efforts. Both agencies have authority to protect against discriminatory lending under the Equal Credit Opportunity Act. But the Dodd-Frank Act also authorizes the CFPB to do joint investigations with the Justice Department when it relates to fair lending. The Justice Department “welcomes the new tools and resources the CFPB can bring to the fight against lending discrimination,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division, in a joint press release.
- Wanted: CFOs Who Know More than Accounting
Chief financial officers who can do more than just count beans are finding plenty of opportunities to land work. A string of community banks have hired CFOs in recent weeks. While churn in this position happens with some regularity, banks are increasingly expressing a preference for individuals who are more savvy and sophisticated than those who have historically filled the post. The CFO’s responsibilities have broadened since the financial crisis, becoming more challenging and requiring executives to have an understanding of areas beyond accounting.
- Credit Unions Outperforming Community Banks in Mobile: Report
Javelin Strategy & Research finds that more credit unions offer mobile banking services than community banks. Credit unions are outperforming community banks in mobile banking, according to new research from Pleasanton, Calif.-based Javelin Strategy & Research Javelin examined the top ten community banks and top ten credit unions, by deposit size, and found that nine out of the ten credit unions offered web-based mobile banking, while three out of the ten community banks reviewed do not offer a single form of mobile banking. Further, According to Javelin, among the top 10 credit unions, 50% offer what the firm refers to as “the triple play;” mobile web, app, and text banking. Meanwhile, that figure is at 40% at community banks. Despite this, the percentage of consumers actually using mobile banking at credit unions is only 19%.
- Is it really that Simple?
Banksimple, a website whose name says it all. Now renamed Simple.com. For the benefit of those who are not yet familiar with Simple.com, it’s a cool front-end service that simplifies banking for customers. It connects with them through social media and eases money management. Which is something that banks have not yet been able to achieve. Will these types of services spell the end of traditional banking? Certainly (Bank) Simple thinks so, judging by its aggressive tag line – “get ready to leave your bank.”
- Citi Takes Major Step Toward IT efficiency
Citicorp announced today plans to significantly reduce expenses related to its global IT and operational footprint, and reposition Bank operations through a reduction in workforce of 11,000 bank employees. The results of these actions are forecast to yield as much as $900M in expense benefit in 2013 and $1.1B in annual expense savings beginning in 2014. Defining these as fundamental and long tail changes, Citi’s newest Chief Executive Officer Michael Corbat said “These actions are logical next steps in Citi’s transformation. While we [Citi] are committed to – and our strategy continues to leverage – our unparalleled global network and footprint, we have identity areas and products where our scale does not provide for meaningful returns. And we will further increase our operating efficiency by reducing excess capacity and expenses, whether they center on technology, real estate, or our operations”
- Wal-Mart Would Love To Have A Banking License, But It Doesn’t Necessarily Need One
Wal-Mart Stores Inc. makes no bones about its efforts to expand into retail nonbank consumer financial services. Over the years the world’s largest retailer has entered the market for prepaid debit cards, credits cards, payroll check cashing, money orders and wire transfers, but for years it has had its sights on a holy grail: full-fledged retail financial services. Having a bank charter would first allow Wal-Mart to lower its cost of processing credit and debit card transitions, for example. It could also potentially engage in the many services offered by your local bank branch – from auto financing to mortgages.
- As Mobile-Payment Giants Bicker, Startups Step Up
The mobile payments industry is stuck in neutral. The ability to pay for your goods and services at brick-and-mortar locations from your smartphone is a dream of technologist and financial companies, but the realities of a complicated industry with billions of dollars at stake and too many moving parts has stymied progress. The leaders in the mobile payments space are not MasterCard or Google. The real leaders are little startups like Square, ShopKeep, Dwolla and LevelUp.