What We’re Reading: Tech Savvy Consumers, M&As, Credit Union Websites
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.
- Mobile Banking Activity Continued to Grow in June
Banks continued to report increases in mobile banking usage in June, according to the latest Mobile Banking Intensity Index. The overall value of the index, 72.5, was roughly in line with the intense growth of last month’s reading of 73.8. Mobile check deposit continues to be adopted quickly among these banks’ customer bases: the index value for mobile deposit was 87 for June. In one component of the index value, 77% of respondents said the volume of activity of retail customers using mobile deposit was higher in June than in May.
- Fintech Vendor M&A Activity Down First Half of 2013, Study Finds
A new report by Berkery Noyes showed vendor mergers and acquisitions diminished in the first half of 2013, but a pickup in M&A activity may be on the horizon. The volume of mergers and acquisitions among financial technology vendors slowed in the first half of 2013, with total value for M&A deals in the industry falling by more than $8 billion compared to the second half of 2012, according to a report recently released by investment bank Berkery Noyes.
- NFC mobile payments: overcoming the barriers for banks
Now the increasing prevalence of smartphones (not to mention mobile banking) has in turn resulted in a greater push for mobile payments; there have been several well-documented attempts to converge NFC and Smartphone technology to this end (albeit with limited penetration to date). Examples include Orange Quick Tap (in conjunction with Barclaycard) and NatWest’s trial of PayTouch. Yet there are a number of significant issues that face firms looking to innovate in this burgeoning arena.
- Why CU Websites Need To Be Less Like Brochures & More Like Amazon
Jeff Chesky, CEO of Insuritas, who spoke as part of NAFCU’s Annual Conference, said that too many CUs’ websites look like digital brochures rather than the Amazon-esque sites consumers have grown accustomed to from other providers, where they can make purchases. Unlike Amazon, he said, credit unions don’t have to work to create love or trust—but most haven’t yet created an online experience as easy as Amazon’s. Moreover, he said, local webmasters and marketing directors generally aren’t equipped to do so. “Your marketing director in your credit union will never have the bandwidth or the capacity to convert your credit union’s webpage into an e-commerce site,” he said.
- Staying Relevant Demands New Tools, Innovation
Credit unions’ competition is not just big U.S. banks. Recently in San Francisco, Bank of India billboards were seen marketing the convenience of deposits in overseas accounts. With technology evolving, our idea of member service will need to evolve to remain relevant in today’s social, global and crowd-sourced world. Credit unions tout their great member service, higher savings rates, lower loan rates and fees but never their innovation and simplicity.
- How To Shatter The Mobile Banking ‘Glass Ceiling’
According to a study on mobile banking from The Federal Reserve published in March 2013, there is a high probability that non-mobile bankers will eventually adopt the technology. Among those consumers with mobile phones who do not currently use mobile banking, 10% report that they will “definitely” or “probably” use mobile banking in the next 12 months. An additional 14% of those who sat they are unlikely to use mobile banking in the next 12 months report that they will “definitely” or “probably” adopt mobile banking at some point. Although consumers’ stated intentions may not perfectly reflect their subsequent behavior, there is strong evidence that “planned use” of mobile banking does in fact correlate with subsequent adoption.
- FFIEC may be prepping guidance for mobile banking
The word going around is that the Federal Financial Institutions Examination Council could introduce guidelines on mobile banking security within the next 12 months. But while that particular aspect of mobile payments may be in the regulatory eye, experts do not expect strictures to be more broadly applied. “The FFIEC issued its initial guidance to U.S. financial institutions on Internet banking authentication in 2005 and then provided an update in 2011,” said Dave Jevans, chairman and chief technology officer of Marble Security, whose firm specializes in mobile security.
- Mobile and Beyond: How Banks Are Catering to Tech-Savvy Customers
The smartphone has changed everything. With people carrying around the equivalent of a mini-computer in their pockets, it’s only natural that a demand for easier banking options grows from the continued developments in convenient apps. Back in the 1990s and early 2000s, bank branches were viewed as an essential piece of the banking puzzle, with the FDIC reporting in 2007 that a convenient branch location was one of the most important factors for customers as they decided where to put their money.
- I’m Still Waiting for My Phone to Become My Wallet
Last summer, Apple introduced Passbook, a digital system for storing boarding passes, movie tickets, loyalty cards and gift cards on the iPhone. But it doesn’t do much beyond that, at least not yet. Google worked with major credit card companies and banks to create its Wallet app, which lets people pay for items at some stores by waving their phones but is available only for Android devices. And the major mobile carriers in the United States banded together to form Isis, a mobile payments network, which has yet to roll out nationally.
- Stern Advice-Financial advice that is popular – and wrong
Instead of making extra payments to burn the mortgage early, stash those extra dollars in a retirement investment account. Invested prudently, it’s hard to believe that money wouldn’t earn you more than the 3 or 4 percent you’re paying in mortgage interest – which is tax deductible, don’t forget. Having the cash on hand, instead of the paid-up mortgage, could help with retirement expenses down the road when you’re not ready to sell your house but have unexpected expenses. If you think you want to stay in your house through your dotage, paying off a low-rate mortgage slowly while you bank money is a much better solution than paying it off now and finding you need a costly reverse mortgage in the future.