EMV migration FAQs

October 12, 2015
/   Voices

EMV is the global benchmark for credit and debit cards that incorporate chip technology.

Big rise in Australian card fraud

October 9, 2015
/   Insights

Cases of card not present (CNP) fraud are continuing to rise across all corners of the globe, as EMV forces criminals away from traditional fraud channels.

EMV is Here: Tips & Tricks You Need to Know

October 7, 2015
/   Insights

The EMV (Europay, MasterCard, Visa) shift went into effect on October 1, 2015 and a majority of large retailers and merchants have upgraded POS terminals to accept EMV chip cards. Despite this new mandate,...

FI Highlight: BankMobile

October 2, 2015
/   Spotlight

Financial institutions that aren’t developing and catering to the wants and needs of younger demographics are missing out on huge opportunities for growth. Luvleen Sidhu, Chief Strategy and Marketing Officer at BankMobile, spoke with...

EMV Liability Shift: Are You Ready?

September 28, 2015

The talking is nearly over for the US payments industry as October 1st sees the all-important EMV liability shift. Chip cards are being issued to consumers and merchants are upgrading their point of sale...

The 5 Most Dangerous Mobile Banking Habits

September 14, 2015
/   Voices

Mobile banking grows more ubiquitous every year. 52 percent of smartphone owners with a bank account use mobile banking, according to the Federal Reserve, and more than half of users log in at least...

The Case for CSR

September 7, 2015

The demise of a New York City law shouldn’t stop good works

FI Highlight: Nusenda Credit Union

September 1, 2015
/   Spotlight

While it is important for banks and credit unions to consider the needs of consumers, it’s also important for FIs to take employee needs into consideration as well. Michelle Dearholt, SVP of Human Resources at Nusenda...

Is a .bank Domain Right for Your Bank?

August 28, 2015
/   Voices

With the general availability of the .bank registry under way, more than 5,500 applications from over 2,200 banks have already taken place, according to fTLD Registry Services.

Can Smartphones Solve ATM Skimming

/   Insights

ATM skimming remains a big business for organized crime rings. According to a recent article in ATMMarketplace.com, card skimming accounted for more than $2 billion in losses. One new approach that banks are exploring...

Cause and Effect: If you build it, will they come?

July 23, 2014
/   Spotlight

Many financial institutions assume that digital banking is lucrative because the most valuable customers happen to bank online. While there is certainly a correlation between online bankers and higher profitability, quantitative evidence suggests that...

Fast Facts: Student Loans

January 22, 2013
/   Insights

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast...

Intuit 2020 Report: The Future of Financial Services

April 11, 2011
/   Insights

Today, Intuit released the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry...

The Top 10 Trends in the Digital Banking Industry

December 18, 2013
/   Spotlight

2014 is rapidly approaching and as the year wraps, the Digital Insight team has pulled together the top 10 trends in the digital banking industry based on data and trends from studying financial institutions....

Making Banking Fun: Gamification in Financial Services

August 5, 2013
/   Insights

Recently, the Banking.com team sat in on American Banker’s webinar, “Gamification in Financial Services: Five Proven Ways to Get an Edge,” which shared how leading brands in financial services have applied gamification to reach...

Small Business: Perception vs. Reality

November 21, 2012
/   Insights

In the most recent election cycle, like most others before it, the one sector of the economy that got the most attention was small business.  This is the future, we were told by every...

Technology M&As: The Beats Go On

May 29, 2014
/   Insights

The ongoing fascination with Apple’s $3 billion purchase of Beats Electronics is entirely understandable, because it’s a cool story. However, it also says a lot about what’s going on between finance and tech.

What We’re Reading

May 5, 2011
/   Spotlight

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. Virtual Banking Worlds Provide Tangible Lessons American...

What We’re Reading: Thanksgiving Edition

November 22, 2012
/   Spotlight

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 Thursday? Plans for Thanksgiving...

From social media to the use of all caps, every individual action can affect credit worthiness

It’s easy to get bogged down in the endless debate over the mingling of banking technology. We all acknowledge that as new tools emerge for both institutions and their customers, the fundamental dynamic between the two sides will continue to evolve. Resisting the tide is to live in denial—things will change, and the better our industry can handle it, the better things will be for everyone.

Still, some issues have the potential to stand out and deserve greater consideration. Here’s one: given the mountains of data now available on each individual, let alone each transaction, the process of deciding whether or not to make a particular loan will inevitably become more automated. The banking technology more than the banker will actually make the call. And again, making a philosophical argument against such practices is to live in denial, not to mention a waste of time. But bowing to the inevitable doesn’t seem too smart either—we need to manage the transformation in such a way as to make it benefit all parties.

So what’s the best way to move forward?

As a recent article in The New York Times points out, the issue is taking on greater urgency than ever before because of the flood of new technologies designed for exactly this purpose. For now, the focus is on new and smaller players using complex algorithms to determine worthy recipients, but let’s not make the mistake of assuming that it will stay a niche market.

In fact, there’s enormous potential here. Estimates vary, but it’s clear that tens of millions of consumers have little or no credit history, and many of them fall outside the purview of traditional lending institutions. Some survive by borrowing from the shadow economy, loan sharks with dubious, unsavory or even predatory practices, and no one thinks that’s a good idea. Meanwhile, helping those without conventional credit scores get an education, start a business, make necessary purchases or just pay their bills could be hugely beneficial to the economy at large.

That’s why it can be refreshing to see startups use technology to make instant decisions about loans. However, their practices are so at odds with tradition that it’s almost surreal. Earnest, which bills its call center personnel as ‘happiness engineers,’ runs predictive analytics on each applicant to identify credit-worthiness.  The company’s merit system is based on looking forward rather than back.  Affirm, which makes no bones about the fact that it’s out to reinvent the financial services industry, asks for just a little information and makes an underwriting decision in less than two minutes.

On the flip side, banks and credit unions don’t survive in a vacuum—they’re answerable to shareholders and regulators, and they’re building on a foundation of centuries-old tradition. Implementing technologies such as those used by startups will mean revamping almost all of their operating practices.

So what exactly are these new players doing to identify worthy borrowers? The technology analyzes just about every kind of information, from buying habits and social media activities to the use of capital letters to fill out forms. And since the human factor in largely absent, there’s a real question whether regulations governing anti-discriminatory practices even apply.

To be sure, the technologies are running analytics based on algorithms developed by teams of developers and banking professionals, and they’re tweaked constantly as the practices evolve. We’ve still in the embryonic phase of this entire discipline, and it will obviously get better.

The question is how and when, and not just if, more traditional institutions adopt these tools and change their practices accordingly. The influence will potentially go both ways—larger and older firms will become more adventurous while the startups face more regulations and become more conservative. Those that get to the center fastest could really win big.



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Compelling voices and contributed content from around the web

James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Brad Strothkamp


Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.