Archive for the ‘Mobile Banking’ Category

Making Mobile More Secure

Security concerns about mobile banking has apparently been part of the reason for the slowing of growth in the channel.  Fortunately, some very smart people are working on solutions that will help ease those fears.

Apple will be releasing facial recognition technology in their iOS 5 update.  This means that mobile banking apps for Apple products will be able to implement a new layer of security.  I can imagine that developers will jump all over this feature.  One can only hope that vendors will be aggressive with implementing this also.

You can read more about the update over on ReadWriteWeb.

It’s A Mobile World

Apple recently released their third quarter earnings and the iPhone and iPad combined for 68% of all of Apple’s revenue.  The iPhone actually makes up 46.6% of the total revenue, which breaks down to over 20 million units and $13 billion.

In case you’ve been sitting on the fence about implementing that mobile strategy, it’s time to go all in.  Android device sales have been keeping pace with Apple devices.  In the near future, more people will access the web from their mobile device than their computer.  You can bet they’ll be looking for that cool mobile banking app also.

The Ultimate Mobile Banking App

January 7, 2011 3 comments

I am absolutely giddy about the iPhone 5 coming out with NFC enabled. No more debit card, just wave and pay. Now I just need that ultimate mobile banking app that will take advantage of the technology available. So what should this mobile banking app have? I’m glad you asked.

High Level Security
With everything going mobile, security needs to be a priority. There have already been instances of poor security with mobile banking. As customers begin to access financial services through this channel, they must feel comfortable with using the service.

Basic Functions with a Twist
Of course at minimum, customers should be able to view their accounts, transfer between accounts, and pay bills. But instead of the typical online banking layout, why not go ahead and take a PFM approach? Mint and Geezeo are good examples of this.

View Check Images
If I can view images on online banking, why can’t I on mobile banking?

ATM/Branch Locator
Hey, no need to pay ATM fees when I can find the closest ATM and get directions on how to get there.

Alerts By Location
In case you didn’t know, customers LOVE getting balance and transaction alerts. This alone will drive up your mobile banking adoption. But what I would like to see is my app having alerts pushed to me within 15 minutes with geo-tagging. It would be great to click on the alert and it show the map location of where the transaction was made. This would have huge potential for fraud protection. Of course, payment processors would need to start providing this location information. For now, it seems we can only get the merchant name, depending on the transaction file you look at.

Mobile Payments
With NFC now available for Android Gingerbread phones and Apple coming with their version soon, mobile payments will take off. You can bet that Microsoft and RIM will follow suit or get left in the dust. A lot of people are eagerly awaiting this feature.

Remote Deposit Capture
USAA is the poster child of this with over 35% of RDC coming from phone apps. Vendors are now starting to offer this as a stand-alone app. I think integration of this function is way better.

Pay People
PayPal has shown that people want this feature. Surveys have also shown that customers would love to have this function provided by their bank or credit union.

Mobile Awards and Coupons

Rewards checking has become very popular. Cardlytics offers one of the better products that I’ve seen. But imagine getting specials pushed to you through alerts. These awards could even be sent to you based on your GPS location.

Video Conferencing
Skype is now offering video conferencing on their phone apps. Mobile banking adoption is supposed to steadily increase. As branch visits go down, being able to video chat with a branch officer about accounts, investments or insurance will be a welcome feature.


November 17, 2010 1 comment

Mobile payments are about to get a serious toe-hold in the US.  In case you haven’t heard, Google is about to release the newest version of Android, Gingerbread, which will support NFC.  Once Apple releases their next iPhone in 2011, you can expect adoption to increase exponentially.

So what does this mean to banks and credit unions?  Most won’t be affected for a while.  But the big boys like Bank of America, Wells Fargo, Citibank and JP Morgan will really start to feel the pain sooner rather than later.  Mobile payments will allow users to connect their credit and debit cards to their phone.  But that’s only if Google and Apple decide to play nice.  They could set themselves up like PayPal, which means that everything would flow through ACH.  If that happens, you can kiss interchange fees goodbye.  The bigger banks would feel this first because their customers are among the early adopters.

Now, you can stick your head in the sand and hope that adoption doesn’t happen for another 10 years, or you can start planning your strategy today.  One thing I’d look at is charging a fee for any ACH withdrawal.  The second is getting familiar with iOS and Android.  Because if you aren’t planning to adapt, others are.

First ODP, Next Interchange

October 19, 2010 1 comment

Brett King, of Bank 2.0 fame, has a post over on Finextra titled The iPhone 5 Debit Card – coming soon.  In the article he discusses the potential impact of Apple’s iPhone 5.0 that will most likely be released next fall.  One highly anticipated feature is contactless payments, which is something I wrote about here.

Brett poses a question of “how will banks compete against Apple, Google, Microsoft and the carriers in the credit card space?”  Apple already has customers that setup their credit cards to use for iTunes.  You can bet that Google and Microsoft will do the same.  Google is better positioned than Microsoft, with their Google Checkout.  But I think Brett missed one important area.

For most banks and credit unions, credit cards aren’t a huge revenue source.  I’m willing to bet that those interchange fees they get from debit transactions has way more income.  I happen to use PayPal for a lot of online transactions.  One thing I recently noticed was, my PayPal account currently has $0 in it.  However, PayPal is able to directly transfer from my checking account to pay for any transactions.  This means that PayPal gets a percentage, but my bank gets nothing.  As far as my bank is concerned, it’s just an ACH transfer.

So, when mobile payments finally take off, it won’t necessarily be banks and credit unions that benefit.  With electronic transactions being the dominate form factor for payments, losing the credit card market isn’t what should keep executives up at night.  It’s losing the debit card transaction market.

We Don’t Need No Stinkin’ Cash

September 6, 2010 Leave a comment

I am SO looking forward to the day when I no longer need to carry cash around.  With the advancement of smart phones, mobile payments and companies like Square, the day may be here sooner than we think.  Somaliland, a small country in the horn of Africa, just may be leading the way.

Somaliland could very well become the world’s first cashless society.  Given the fact that cash pretty much doesn’t work there (17,000 shillings = $1 US and the highest denomination is 500 Shillings) and the advancement of their mobile banking industry, getting away from cash is becoming a necessity.  Carrying wheelbarrows of money around isn’t that feasible.  However, using such services as Dahabshiil is.

Now, who thought that a small African nation would be the catalyst in changing the world to a pure electronic format?

You can read more over at TechCrunch.

Hope You’re Checking That Rearview Mirror

August 14, 2010 Leave a comment

While bank and credit union executives plan their mobile strategy or take a “wait and see” approach, industry outsiders keep on innovating. PayPal is updating their iPhone app so that you will be able to take pictures of checks and deposit directly into your PayPal account. As an additional bonus, PayPal has partnered with a number of charities so that you’ll be to donate directly to the charity of your choice. You can read more at TechCrunch.

FIs Are About To Be Blindsided…Again

May 13, 2010 5 comments

I’m not sure if you heard, but this little tech company out in California has a couple of neat devices called the iPhone and iPad.  So far, banks and credit unions have been holding back from jumping into the mobile banking space.  But I believe momentum will grow exponentially over the next two years.

The problem is it might just be too late.  One of the main reason FIs haven’t jumped into the mobile space is because there is no clear ROI.  Instead, they mostly hear about the cost savings in other areas like the call center.  No one is charging for mobile banking in the United States.  And until Bank of America, Wells Fargo or Citibank does, I don’t think anyone will.

One idea I have heard floated for income is charging commercial customers.  The reason being companies are typically charged for using cash management services.  Another one is getting transaction income from mobile payments. Make no mistake, mobile is the biggest growth area for financial services.  I believe that within five years, customers will access their account information mostly from a mobile device.  The iPad and other “tablet” computers will only accelerate this growth.

Fiserv’s iPad demo at Finovate Spring 2010 is just a sample of what’s to come.  But what no one is noticing are the companies that are going around banks and credit unions.  Square’s apps for the iPhone and iPad will take away from those lucrative merchant accounts that customers normally get through their FI.

The biggest threat is the new Transaction app that Apple is working on.  Basically, Apple will turn your iPhone into a credit card by using NFC.  So just like PayPal became the standard for online transactions, it looks like Apple could become the standard for mobile transactions.  And if everything is going mobile, where exactly does that leave your FI?

iPad and Banking

April 8, 2010 3 comments

The Financial Brand sent an interesting tweet earlier: “If online banking works fine on iPads, then why would a financial institution ever need to build an iPad-specific app?”

Maybe it’s the geek in me, but I see the iPad as a way to redefine online banking.  While having lunch this week with a couple of co-workers and  Bryan Clagett (@clagett) of Geezeo, we talked about online banking in general.  Most FI customers currently go to their FI’s homepage and then go directly to online banking.  They never look over the other information that’s listed on the website.

I believe an iPad app can be more beneficial to customers.  For instance, you can push balance/transaction alerts.  You could also push alerts about rate changes and marketing events or even iAds.  An iPad app would give a FI the opportunity to make mobile banking more PFM like, which would be a much better experience.

My point is, if newspapers can see the benefit of having an app instead of just letting people go to their website, there must be some tangible benefit.  You’re only limited by your imagination.  I believe most online and mobile web banking experiences are pretty crappy.  The iPad gives you the outlet to really do it right.

Picture by d!zzy/flickr

Banking On Mobile

February 3, 2010 3 comments

Apple’s announcement of the iPad has sent ripples throughout all industries.  The biggest question is, can we use it to further our business goals?  NetBanker has a post about what the iPad could mean to banking.  But before I get into that, I’d like to share some thoughts about the iPad in general.

To my core, I believe the iPad will have a much bigger effect on household computing than the Wii did on home video games.  When the Wii came out, it was considered a weak machine when compared to the competitors.  The wireless, motion controller looked cool, but it was a kids’ system.  Sony and Microsoft still haven’t reached the number of sales to that of the Wii.

While the PS3 and XBox were geared towards hard core gamers, the Wii was targeting causal gamers.  Nintendo went after everyone that didn’t really play video games, which is a much bigger market.  Say what you will, but I know a lot of people that ended up with “Wii-bow.”  The Wii was embraced by a market of age 2-100.  Adult care facilities even picked up a few systems for their residents.

Now, looking at the iPad, I see the same potential.  Blog posts by Ethan Nicholas on TechCrunch and Dan Moren at Macworld reinforce that belief.  There are plenty of posts, such as Randall Kennedy’s at Infoworld, that talk about how the iPad won’t kill the netbook.  I don’t think the iPad will completely kill the netbook, but it will make it irrelevant to the masses.  You see, the iPad isn’t geared for geeks or even heavy computer users.  It’s for all those people that want something that is easy to use and just works.

Being an IT guy, I too have to do tech support for my family and friends.  An iPad takes all that away.  There is no need to install anti-virus software and keep it updated.  No silly spam blockers, firewalls or driver updates either.  The iPad is a closed system, so it takes all those headaches away.  Plus it even functions as an e-reader, which is one thing that I can’t wait for.

I think the iBookstore will really open people up to using electronic devices.  One example is my wife.  This past spring I was going to get a Kindle for her.  Now, we read an average of ten books a month between the two of us.  She wasn’t interested in the Kindle at all.  She wanted to actually hold a book and turn the pages.  That was the best experience to her.  Well, her mother gave her a Kindle for Christmas.  Now I believe she loves that thing more than her Blackberry Storm and iPod combined.

Once people get an iPad in their hands, I believe they will love it just as much.  Oh, and one knock I heard was that it was a wi-fi device, no ethernet connection for when no wireless was available.  A lot of these potential households have wireless networks because they also have Wiis, PS3s and XBoxes.  So it will mostly be used at home or in places with a wireless connection.

So, how does this relate to banking?  Well, all these new iPad owners will become a lot more comfortable with computers in general.  They’ll finally have a device that is intuitive and makes checking their email, browsing the web and reading books simple.  As they get more comfortable, they’ll spend more time in that App Store and they’ll discover even more apps that fit into their life.

This is where your bank comes in.  All those customers that just weren’t interested in internet banking?  Now they’ll have the device that helps make them more open to using your service (hope your IB provider supports Safari and not IE6 only).  Even better, if you have an app in the App Store, you can provide a better banking experience to them.

If you didn’t have a mobile strategy before, you might want to start working on one now.  There will be a lot more people that want an iPad for home use than those that want an iPhone with AT&T.

Also, join us in Charleston on Feb. 27th, 2010 for BarCampBankCharleston where we can discuss topics like this in an informal group setting. The information site can be found here and registration here. This is a free event so come on down.

Picture by d!zzy/flickr