Showing posts with label P2P. Show all posts
Showing posts with label P2P. Show all posts

Thursday, October 17, 2013

P2P Payment Simplicity Square'd

Some of the best mobile banking apps are those that make everyday tasks simpler. Two of my favorites are GoBank's Balance Bar, that lets you see your account balance without login, and Moven's real-time mobile purchase receipts and analysis.

Tuesday, Square, Inc. joined my growing list of ├╝ber-simple mobile banking applications with their introduction of Square Cash, a new app that makes sending money person to person as simple as sending an email. In today's mobile world, simplicity is the 'new black'.

P2P applications are definitely not new. There are literally hundreds of bank and non-bank applications that allow you to send money digitally, including Google, PayPal and Venmo. Consumers also have the choice of simply writing a check as they have done for years. But, I believe Square has introduced the most streamlined app that may have the broadest mass market appeal. 

Imagine emailing money to another person, without a fee, directly from a debit card without a login or password. All that is needed is a debit card number, Zip Code and expiration date from the sender and recipient (only need to be entered the first time you use the service). After that, sending money is only an email address away.

Compare that process to most banks, that require mobile banking sign-in (don't get me started), a test transaction and potentially more steps, even though there is normally no fee for the service. PayPal's P2P app transfers money from a PayPal account to another PayPal account, with transferring funds to a bank account being an additional step (in addition to a one-time signing up for PayPal). Google's P2P service uses email like Square, but requires signing up for Google Wallet and transferring funds to a bank account. Venmo is a growing favorite of younger people who prefer to send money via a Facebook-like newsfeed. This service also requires an application sign-up.

Unlike Square Cash, most of the other P2P applications have fees attached as shown below. Square Cash, however, only supports debit cards at this time, with low weekly limits ($250) unless you provide a mobile phone number and Facebook account or verify your full name, the last four digits of your social security number and date of birth -- then the limit is raised to $2,500. If the Facebook option is selected, no information or messages are ever passed to the social channel. Square is simply using Facebook as part of authentication.

Source: My Bank Tracker, September 2013

Monday, September 2, 2013

Six Years of Financial Services Innovation

Anticipation is building as FinovateFall 2013 is returning to Manhattan on September 10 and 11 for the seventh consecutive year. With more than 70 cutting edge firms doing 7 minute demos in front of a sellout crowd of more than 1,000 bankers, investors, analysts and the press, it is the premier showcase and networking event for what is new in the world of fintech.

While the overarching innovation theme remains the same, it is interesting to see the ebbs and flows of presenting categories and companies through the years. It is more interesting to realize how fast things have changed in the financial services industry.

Finovate 2007: When Mobile Was Young

The brainchild of the Online Banking Report and NetBanker blog publisher, Jim Bruene, the very first Finovate conference was held in New York City on October 2 of 2007, when 20 of the most innovative companies in the financial, banking and lending space gathered in front of a handful more than 200 banking executives, analysts, investors and the press to offer a glimpse of the future using the now familiar 7 minute demo format (no PowerPoint slides allowed!). The one-day event was quickly sold out, with overflow space provided for late registrants to view presentations via a video feed (see all 20 videos from the first Finovate conference here).

While only six years ago, a lot has changed in the financial marketplace. In 2007, mobile banking was in its infancy, with just a few hundred thousand users across three different platforms ('mobile website' was the most popular). Interestingly, the discussion at the time was whether mobile banking would be a standalone profit center or just another cost center for banks (still up for debate by many). And despite a lot of hype at the time, only one bank (Citibank) and one vendor (mFoundry) had launched a fully downloadable, custom mobile banking app.

The themes for the 2007 show and number of companies presenting were PFM (5), mobile banking (5), payments/billing(4), P2P Lending (2), online tools (2), mortgage lending (1) and security (1).

The presenter list included (in alphabetical order); Andera, Billeo, CheckFree (acquired by Fiserv), Clairmail, Firethorn (now Qualcomm Retail Solutions), Geezeo, Digital Insight (an Intuit company), Identity Theft 911, iPay Technologies, Jwaala, Lending Club, Metavante (acquired by FIS), mFoundry, Mint, Monitise, MortgageBot (now part of Davis + Henderson), MShift, Online Resources (acquired by ACI Worldwide), Prosper Marketplace and Yodlee.

The Best of Show winners of the first Finovate were a two-week old online personal finance start-up named Mint, a mortgage marketplace from MortgageBot named Marvel and the peer-to-peer lender Prosper. The biggest winner, however, may have been the financial community, since the success of Finovate 2007 was the foundation for a growing series of global Finovate events that now include an expanded 2-day FinovateFall event in Manhattan, a second two-day U.S. event, FinovateSpring in California, a one-day FinovateAsia (30+ firms) and the two-day FinovateEurope (60+ firms).

With technology always at the forefront, Finovate 2007 was the first financial services conference to proactively court the blogging community, with bloggers from four countries covering the 2007 event (live blogging and a ton of tweeting continues during all events). In addition, all of the presentations are streamed for later viewing for attendees and non-attendees on the Finovate web site.

Monday, July 29, 2013

The Revenue Power of Emerging Financial Services

With interest rates remaining low and traditional fee income impacted by recent government regulations, banks and credit unions are increasingly looking for new ways to make up the shortfall in revenues.

Despite continued pressure from consumers around 'fee anxiety' and our industry's habit of giving most services away for free, there are still opportunities to promote customer loyalty and generate new non-interest sources of income according to new research.

In the most comprehensive fee optimization study of its kind from Market Rates Insight, Inc. entitled, 'Growth and Revenue Potential of Emerging Financial Services', the importance and value of new financial services are evaluated to determine new revenue sources as well as ways to attract and retain customers. In the study, it was found that there is a willingness from consumers to accept 'value-added fees' for services that are viewed as valuable.

"For the foreseeable future, deposit rates will remain flat and loan demand will be soft, so financial institutions will need to rely on fee revenues for income growth," states Dan Geller, EVP of research at Market Rates Insight. "To convert services from 'free' to 'fee', banks and credit unions will have to identify new services that consumers want and are willing to pay for. The study shows organizations how to use service fees to expand profits and penetration with both new and existing customers."

The 150-page study (available here) examines 13 emerging financial services and includes a competitive survey of 10 financial institutions, assessing the importance and value of each service, segmenting banks and credit unions as well as demographic segments for variances. The highlights of the study include:

      • Financial institutions can sell four times the number of financial services they currently do by offering more 'leading edge' services consumers find valuable
      • Only 13.1 percent of consumers receive emerging financial services from their financial institution, yet 54.6 percent of consumers who don't have these services find them important
      • The highest potential from growth in revenue from emerging services is with larger organizations
      • The highest ranking services in terms of potential growth are credit score reporting (71.4%), identity theft alerts (70.8%), payment protection services (64.6%) and same-day bill pay (58.7%).
      • The value placed on emerging financial services is inversely correlated to the age segment of consumers, with younger consumers placing higher values on the new services evaluated
      • Consumers value and will pay a premium for specific bundles of services more than they value individual services, but there is a point of diminishing return for the revenue potential of bundles relative to the expense of additional services
      • The mid-range revenue potential for an optimal bundle of emerging services is $10.12 per month.

Monday, May 27, 2013

Musings of a Finovate Virgin

They say you always remember your first time. 

After years of being built up by a great amount of hyperbole, including being dubbed The Disneyland of Fintech™ by my friend Brad Leimer, I finally decided to experience Finovate for myself a couple weeks ago in San Francisco. Similar to many 'first times' in my life, my experience expended a lot of energy, ended too quickly, but definitely did not disappoint.

To those not familiar with Finovate, the event is a fast-paced showcase of financial technology vendors, who have only seven minutes to provide a live demo of their solution (Powerpoint not allowed). It’s produced by Online Financial Innovations, the people behind the excellent NetBanker blog.

Taking place several times a year across the globe, FinovateSpring included 72 demos in front of a record crowd of over 1300 bankers, investors, media and bloggers like me. (Video archives of this year's presentations are available here)

As opposed to focusing on only a few themes, Finovate has something for everyone. This Spring's event covered some familiar themes that would be expected (Mobile, Payments, etc.) as well as some newer themes that sparked conversation, debate and maybe even a bit of fear among traditional bankers (P2P Payments, P2P Lending, Virtual Currency, etc.). 

My Takeaways

Overall Impression: Bordering on sensory overload, Finovate should be on every financial marketers bucket list. While many of us spend countless hours dealing with some rather mundane challenges at times (compliance and other internal battles), it is refreshing to know that innovation is alive and well in financial services. It was difficult to keep up with the presentations at times since there is no apparent logic to the order of presenters, but I quickly realized the value of the live blogs and recaps from Finovate, Bank Innovation, PaymentsViews, the William Mills Agency, and others.

Monday, October 15, 2012

Monetizing Mobile Banking

As consumers are becoming more comfortable with mobile banking and mobile payments, financial institutions and technology providers are beginning to develop and deploy more innovative solutions with a focus on gaining market share, reducing costs and realizing new sources of revenue. It is clear that the question is no longer whether mobile banking and mobile payments will be important to a bank's business (84% of respondents to a recent KPMG survey said that it is). The question has become, can banks realize the full potential of the channel from a customer development and revenue perspective.

To this end, one of the best sessions I attended last week at the BAI Retail Delivery Conference was around the opportunity for banks to monetize mobile banking. Presented by Matt Wilcox, senior vice president of eBusiness strategy for Zions Bancorporation and Drew Sievers, CEO of mFoundry, the session focused on the opportunity for mobile banking to move from simply reducing costs to actually being the foundation for revenue generation. 

Mobile Banking Evolution

At the beginning of the presentation, Wilcox presented an overview of the mobile banking evolution that has occurred over the past several years. According to Wilcox, mobile banking has evolved from being simply a channel innovation to providing the potential for significant channel migration cost savings as shown below. He noted, however, that banks should not build business cases around 1:1 transaction displacement, since many consumers increase their overall transaction volume as they move to more automated channels. This is similar to what occurred with ATM volumes that increased at a much higher rate than branch transactions decreased in the past.

Source: TowerGroup and Fiserv (2010)

Monday, June 7, 2010

Mobile Banking Summit Illustrates Topic is Hot

You don't need to look any further than the attendee list to realize the importance of mobile banking to our industry. Not only is almost every major institution in attendance at this year's Mobile Banking and Emerging Applications Summit, but the number of participants has increased by more than 50% according to officials from SourceMedia.

The program kicked off Sunday with a workshop by David Eads, Founder & CEO of Mobile Strategy Partners LLC where he discussed the basics of getting a Mobile Banking strategy off the ground. He also shared the first of a wave of industry statistics that made it clear to the SRO attendees that this year and next will be pivotal to the mobile banking industry. He also shared keys to developing a business case for introducing mobile banking. He emphasized that while cost reduction (mainly from offloaded balance inquiry calls) could many time justify the investment in mobile banking by itself. a drop in attrition and an increase in revenue from increased interchange and cross-sales will also improve the ROI.

Monday, April 26, 2010

SIFMA Asset Management Account Roundtable Recap

I would like to thank the people from the Securities Industry and Financial Markets Association (SIFMA) as well as co-chairs Jennifer Byrd from Morgan Stanley Smith Barney and Steve Newcamp from Federated Investors. As always, the event was well attended and the sharing of ideas and insights from the speakers and participants was great. I would be remiss if I didn't also thank my own company, Harland Clarke for the amazing dinner at the Battery Park Gardens Restaurant where, even with the rain, the view of the Statue of Liberty was super.

Some interesting takeaways from the meeting: