Mobile Payment Magazine

Report: Leveraging An Omnichannel Approach To Drive $1.5B In Mobile Banking Cost Savings

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mobile-payment-report-omnichannelMobile bankers are valuable customers: rich, young, and flush with profitable bank products and services. The products and services are saving financial institution money — as the number of mobile bankers has grown, branch visitation has decreased considerably. However, mobile channels have not yet offset physical channel preference among mobile bankers.

For certain activities, mobile bankers inexplicably turn to the brick and-mortar branch at higher rates than all consumers. Identifying costly behaviors to transition to electronic channels is the first step for FIs looking to cut delivery costs. The next move is bolstering adoption of value-added services, which are not only profitable but also encourage overall use of the mobile channel.

Understanding how the mobile channel attracts consumers that use more bank resources requires analysis of these consumers’ behavior and product ownership. Drawn from robust consumer data, this report, entitled Leveraging An Omnichannel Approach To Drive $1.5B In Mobile Banking Cost Savings, provides best practices and recommendations to encourage consumers to maximize the potential of their mobile devices — and save FIs money in the process.

Primary Questions:

– What features make mobile bankers unique and valuable customers?
– To what extent has mobile banking lowered delivery costs for FIs?
– Why are mobile bankers still turning to the branch over electronic alternatives?
– Are further savings possible by encouraging the use of the mobile channel?
– Which behaviors should be targeted to encourage electronic channels over branch visitation?
– Which advanced mobile banking features are profitable for FIs and desired by customers?

Contents:
Overview
Primary Questions
Methodology
Executive Summary
Recommendations
What Sets Mobile Bankers Apart, and Why Are They Valuable?
Mobile Bankers Are Young
Mobile Bankers Are Wealthy
Mobile Bankers Are Early
Adopters
Mobile Banking Attracts New Relationships
Mobile Bankers Are Flocking to Bigger Banks
Mobile Bankers Are Adoring Mobile Apps, Which Increases Readiness for Advanced Features
Mobile Bankers Own More Profitable Financial Products and Services
Mobile Banking Adoption Is Saving FIs Money — $1.5 Billion More Can Be Saved
Why Do Mobile Bankers Go Into a Branch?
Which Behaviors Should Banks Target Among Mobile Bankers to Encourage Electronic Alternatives?
Mobile Bankers Still Turning to the Branch to Deposit Funds
FIs Can Save $1.5 Billion if Mobile Bankers Switch In-person Deposits to Mobile Once per Month
Mobile Bankers Show a Higher Preference for Using the Branch to Monitor Their Accounts
Mobile Bankers’ Use of CSRs Declines Over the Past Three Years
Further Driving Alert
Adopon Could Reduce Use of Costly Channels
Budgeting Tools Will Help Reduce Mobile Bankers’ In-Person Visits for Monitoring
Mobile Bankers Show Higher Interest in Advanced PFM
Mobile Banking Value-Added Services Can Increase Profits and Turn Mobile Bankers Into Power Users
Value-Added Services Satisfy Needs and Make Mobile Bankers More Profitable
Mobile Imaging Can Be Used to Attract Mobile Bankers
Market Prepaid Accounts to Mobile Bankers
Mobile Wallets Can Generate Revenue
Mobile Bankers Desire Location-Based Offers and Coupons
Mobile Bankers Use Mobile P2P, But Greater Adopon Is Necessary
Appendix
Related Research
Companies Mentioned

Table of Figures

Figure 1: Maximizing the Value of Mobile Bankers
Figure 2: Who Are Mobile Bankers in the U.S.?
Figure 3: Technology Attitudes of Mobile in Bankers Past 90 Days vs. Online Bankers in Past 90 Days
Figure 4: Recency of Joining Primary Bank by Mobile Bankers in Past 90 Days vs. Online Bankers vs. All Consumers (Benchmark)
Figure 5: Mobile Bankers in Past 90 vs. Non-mobile Bankers by Bank Size
Figure 6: Methods Used to Conduct Mobile Banking (2009–2012)
Figure 7: Financial Product and Service Ownership by Mobile Bankers (Past 90 Days) vs. All Consumers
Figure 8: Financial Product Ownership, Selected Products by Mobile Bankers (Past 90 Days) vs. All Consumers.
Figure 9: Percent of Mobile Bankers in Past 30 days vs. Percent of Branch Visits in Past 30 Days (2009–2013)
Figure 10: Reasons for Going to the Branch for Mobile Bankers (Past 90 Days) vs. All Consumers
Figure 11: Top 3 Channels Mobile Bankers Prefer to Conduct Financial Behaviors
Figure 12: Estimated Cost per Transaction
Figure 13: Preferred Method to Deposit Funds by Online Bankers (Past 90 Days) vs. Mobile Bankers (Past 90 Days) vs. All Consumers
Figure 14: Rates of Deposit Through Physical Branch
Figure 15: Potential Annual Savings Per Mobile Banking Customer by Converting One Monthly Deposit to Mobile
Figure 16: Channel Preference for Monitoring Balances, Accounts, and Transfers by Mobile Bankers (Past 90 Days) vs. Online Bankers (Past 90 Days) vs.All Consumers
Figure 17: Used a CSR to Perform Any Banking Function by Mobile Bankers in Past 90 Days vs. All Consumers 2011–2013 .
Figure 18: Use of Alerts in Past 90 Days by Mobile Bankers, Online Bankers, and All Consumers
Figure 19: Preferred Source for PFM for Online Bankers (Past 90 Days) vs. Mobile Bankers (Past 90 Days) vs. All Consumers
Figure 20: Likelihood to Use Advanced PFM Services if Available (Probably Would Use/Definitely Would Use) by Mobile Bankers (Past 90 Days) vs. Online Bankers vs. All Consumers
Figure 21: Interest in Using Mobile Imaging to Compare Credit Card Rates by Segments
Figure 22: Prepaid and Checking Account Ownership by Mobile Bankers and All Consumers
Figure 23: Consumer Likelihood to Opt In to Mobile Delivery of Location-Based Offers or Coupons
Figure 24: Recency of Conducting a Mobile Person-to-Person Transfer by Mobile Bankers (Past 90 Days) vs. All Consumers
Figure 25: Consumers Using Mobile Banking in Past 90 days vs. Never Used Mobile Banking by Age
Figure 26: Mobile Bankers (Past 90 Days) vs. All Consumers by Annual Income
Figure 27: Mobile Bankers (Past 90 Days) vs. Online Bankers vs. All Consumers by Investable Assets
Figure 28: Use of Bank Bill View by Mobile Bankers(Past 90 Days) vs. Online Bankers (Past 90 Days) vs. All Consumers
Figure 29: Consumer Phone Feature Use, 2010–2012

Companies Mentioned
– Chase
– Groupon

For more information, and to order: Research & Markets – Leveraging An Omnichannel Approach To Drive $1.5B In Mobile Banking Cost Savings

Research Report: Positioning for Payments in the New Mobile-Social Technology Era

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We are at the beginning of a new technology cycle as consumer adoption of mobile and social media extends the reach of the web and integrates those media into the physical world.

Facebook is only eight years old, and yet its planned $5 billion IPO is the largest Internet IPO ever. As in every new technology cycle, network effects make room for new players and the creation—and destruction—of vast amounts of wealth.

The Gang of Four—Apple, Amazon, Facebook, and Google—is a group of network players entering the banking and payments environment. How will the strengths and weaknesses of the Gang of Four play against those of major financial institutions, payment networks, and wireless carriers? Surprisingly, PayPal rates on equal footing with the Gang of Four when it comes to innovation and emerges as a possible leader in the next tech cycle.

Research & Markets recently released a report entitled Positioning for Payments in the New Mobile-Social Technology Erathat  focuses on the relationship of brands to consumer perceptions of trust, innovation, and privacy in order to identify opportunities and threats.

Primary Questions

  • What is the newest technology cycle? Which brands are positioned to take advantage of the next cycle?
  • What models are developing that will intersect with the financial services space?
  • How will the strengths and weaknesses of the Gang of Four play against those of major financial institutions, payment networks, and wireless carriers?
  • How well do consumers trust the Gang of Four compared with the major financial institution, payment network, and wireless carrier brands when it comes to their financial information?
  • How do consumers rate the Gang of Four compared with the major financial institution, payment network and wireless carrier brands when it comes to protecting their private information?
  • Which brands are viewed as most innovative?
  • How do customers of the primary financial institutions rate their own institutions on the issues of trust, innovation, and privacy?
  • How should brands position themselves to best compete in the new technology cycle?


Methodology
The report is based mainly on data collected online from a random-sample bank benchmark panel of 5,878 consumers in December 2011. The survey targeted respondents based on proportions of gender, ethnicity, age, and income representative of those of the overall U.S. online population. The margin of sampling error is ±1.28% at the 95% confidence level.

It is also based on a survey of 5,211 consumers conducted online in October 2011 on KnowledgePanel. This sample is representative of the U.S. census demographics distribution and is recruited from the Knowledge Networks panel. Data is weighted using 18+ U.S. Population Benchmarks for age, gender, race/ethnicity, education, census region, and metropolitan status from the September 2011 Current Population Survey (CPS) and household Internet access from the October 2010 CPS Supplement. The margin of sampling error is ±1.73% at the 95% confidence level.

Table of Contents

  • Overview
  • Methodology
  • Executive Summary
  • Platforms That Are Able to Gather the Biggest User Base Usually Gain the Most Power and Wealth in Each
  • Technology Cycle
  • Mobile + Social Defines the Newest Technology Cycle
  • Wealth Is Created—and Destroyed—During Each New Technology Cycle
  • Apple, Amazon, Google, and Facebook
  • Platforms That Gather the Biggest User Base Usually Gain the Most Power and Wealth in Each Technology Cycle
  • Mobile Platform
  • Two Diverging Views of Mobile Success—Open (Google) vs Protected (Apple)
  • Social Media Platform
  • Mobile-Social Integration Opens Opportunity for Competitor to Move on Facebook
  • Game-Changing Business Models Rapidly Emerge During Times of Technological Upheaval
  • Tablets
  • Alliances Can Use Mutual Strengths and Weaknesses Can Fill Gaps to Respond Faster and with Better Products
  • Javelin TIP Model for Mobile Wallets
  • Trust
  • Apple Leads in Innovation—at Least for Now
  • Innovation
  • Privacy
  • Don’t Count out the Financial Institution’s Primary Relationship with the Consumer
  • No Brand Reaches the Gold Zone—Without an Alliance
  • Appendix
  • Related Research
  • Companies Mentioned

– Amazon, American Express, Apple, AT&T, Bank of America, Chase, Citibank, Discover, Facebook, Google, MasterCard, Microsoft, PayPal, Research In Motion, Sprint, Twitter, U.S. Bank, Verizon, Visa, Wells Fargo, zvelo

More information: Research and Markets

Research: Smartphone Banking Security

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Javelin Strategy Research has release a new report entitled: “Smartphone Banking Security: Mobile Banking Utilization Stalls On Consumer Fears.”

Mobile banking adoption has stagnated despite explosive growth in smartphone adoption from 2009 to 2011.

In 2009, one in four smartphone owners considered mobile banking unsafe. One year later, 40% of smartphone owners felt the same way.

As financial institutions push forward, offering innovative and convenient financial options to a new mobile generation, consumers are left questioning whether security was sacrificed in the rush toward innovation. In the context of the recent infiltration of malware into the Android Market, it is imperative that FIs reassure consumers that mobile security is a priority.

Primary Questions

  • What is the rate of smartphone adoption?
  • What is the growth rate of mobile banking and purchasing?
  • What are some factors that are inhibiting the adoption of mobile financial activities?
  • How can FIs encourage mobile financial activity?

For more information please click on:
http://www.researchandmarkets.com/product/704e3c/smartphone_banking_security_mobile_banking_u

Methodology

For this report, Javelin gathered data from three different surveys administered in 2010 – 2011. Each survey collected data from a base of 3,000 to 5,000 consumers, representative of the general U.S. population. They were interviewed on a range of topics including, but not limited to, fraud, security services, and technology adoption.

  • For questions answered by all 5,102 consumers in the March 2011 Financial Services Channel survey, the margin of error is &Plusmn;1.37 percentage points at the 95% confidence level. The margin error is higher for questions answered by subsegments. For longitudinal comparison, data from 2009 and 2010 was reweighted to the latest census targets according to the U.S. Census Current Population Survey (CPS).
  • For questions answered by all 5,211 consumers in the March 2010 Financial Services Channel survey, the margin of sampling error is &Plusmn;1.39 percentage points at the 95% confidence level.
  • For questions answered by all 3,100 consumers in the July 2010 Mobile survey, the margin of error is &Plusmn;1.76 percentage points at the 95% confidence level.

Audience: Financial institutions, mobile banking and marketing departments, credit card networks, credit card issuers, payment processors, mobile banking vendors, mobile payment vendors, mobile network operators, authentication technology vendors, authentication platform vendors.

For more information please click on:
http://www.researchandmarkets.com/product/704e3c/smartphone_banking_security_mobile_banking_u

Title Index:

– Overview
– Methodology
– Executive Summary and Recommendations
– Smartphone Adoption
– Stagnation of Mobile Financial Activities
– Security Concerns with Mobile Banking

What is a Killer App?

– Consumers Prefer Mobile Optimized Browser Sites
– Companies Mentioned

Table of Figures

– Figure 1: Smartphone Ownership, 2009 – 2011
– Figure 2: Consumers Who Have Mobile Banked in the Past 90 Days by Primary Bank
– Figure 3: Mobile Banking Use by Smartphone Users, 2010 – 2011
– Figure 4: Purchases Made via Mobile Devices by Smartphone Users, 2009 – 2010
– Figure 5: Smartphone Owners’ Perception of Mobile Banking Safety, 2009 – 2010
– Figure 6: Smartphone Owners’ Perception of Mobile Banking Channels, 2009 – 2010

For more information please click on:
http://www.researchandmarkets.com/product/704e3c/smartphone_banking_security_mobile_banking_u


Smartphone Banking Security: mBanking Susceptible to Consumer Fears

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According to Research and Markets, mobile banking adoption has stagnated despite explosive growth in smartphone adoption from 2009 to 2011, and the company attributes the slowdown to consumer fears over mobile banking security.

In 2009, one in four smartphone owners considered mobile banking unsafe. One year later, 40% of smartphone owners felt the same way. As financial institutions push forward, offering innovative and convenient financial options to a new mobile generation, consumers are left questioning whether security was sacrificed in the rush toward innovation.

In the context of the recent infiltration of malware into the Android Market, the company notes that it is imperative that FIs reassure consumers that mobile security is a priority.

Research and Markets  has announced the release of a new  Javelin Strategy & Research report entitled “Smartphone Banking Security: Mobile Banking Utilization Stalls On Consumer Fears.”

Primary questions covered:

  • What is the rate of smartphone adoption?
  • What is the growth rate of mobile banking and purchasing?
  • What are some factors that are inhibiting the adoption of mobile financial activities?
  • How can FIs encourage mobile financial activity?

Companies Mentioned:

  • Apple
  • Bank of America
  • BB&T Bank
  • Chase
  • Citibank
  • Citizens
  • Fifth Third Bank
  • Google
  • HSBC
  • IBM
  • Key Bank
  • Microsoft
  • PNC
  • Regions
  • RIM
  • SunTrust
  • TD Bank
  • US Bank
  • USAA
  • Wachovia
  • Wells Fargo

More information: Smartphone Banking Security: Mobile Banking Utilization Stalls On Consumer Fears

 

Source: Business Wire

Chase Partners with Mitek Systems for Mobile Check Deposit Solutions

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Chase has entered into a strategic agreement with Mitek Systems, Inc., a developer of advanced-image analytics and mobile-document-capture applications, to develop a suite of innovative image-capture solutions across multiple smartphone operating systems.

“Mitek’s Mobile Deposit product helps us deliver on that promise by making mobile check depositing convenient and quick, across a variety of platforms.”

The agreement enables Chase to build on the success of its award-winning QuickDeposit feature by deploying Mitek’s mobile-banking and advanced image-capture and analytics products across a variety of smartphone operating systems. QuickDeposit allows customers to deposit checks anytime and anywhere with a click of their mobile phone camera.

“Customers demand an efficient and reliable mobile-banking experience from Chase,” said Jack Stephenson, managing director of Mobile, Ecommerce and Payments, JPMorgan Chase. “Mitek’s Mobile Deposit product helps us deliver on that promise by making mobile check depositing convenient and quick, across a variety of platforms.”

Mitek President and CEO James B. DeBello said: “At Mitek, we enhance the consumer’s mobile-payment experience with advanced capabilities for depositing checks and paying bills that are accurate, secure and easy to use. We are proud to partner with Chase for the use of our patented software solutions.”

In addition to its QuickDeposit feature, Chase provides consumers with industry-leading mobile banking services, including:

  • Award-winning Chase mobile banking applications for iPhone and Android users.
  • Text Banking: allows customers to request from any mobile phone and receive within seconds their account balances and transaction history on checking, savings, credit card, mortgage and home equity accounts.
  • Instant Action Alerts: text messages are sent the moment a checking account balance falls below a pre-selected amount; the customer can then instantly transfer funds through a text-message reply.
  • Chase QuickPay feature is now available for iPhone users, allowing them to send money to and receive funds from virtually anyone who has signed up for the service with an e-mail address.
  • Mobile Chase.com website, offering standard services for all mobile banking customers.

Source: Business Wire

2010 Mobile Banking Scorecard Research Report

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Javelin Strategy and Research has released its 2010 Mobile Banking Scorecard: How 19 Top Financial Institutions Compare on Mobile Channel Retail Delivery. The survey presents an overview of mobile banking services offered by 19 of the 30 largest U.S. financial institutions (FIs) based on deposits. The survey covers five key areas of mobile banking: marketing and security messaging, mobile access, general features, short message service SMS features and security.

As part of the data collection process, mystery shoppers also were employed. They searched each FI’s website and contacted each FI’s customer service representatives CSRs a minimum of four times. Of the 30 FIs researched and contacted in June and July 2010, 19 offer mobile banking services to their customers.

When scoring the FIs, Javelin reviewed a total of 47 criteria. Based on a quantitative analysis of the criteria, FIs were awarded either a gold, silver or bronze status. This report further includes a profile of Bank of America.

More information or to download a report summary: Javelin Strategy – 2010 Mobile Banking Scorecard.

U.S. Mobile Payment Market to Top $200 Billion by 2015, Says Research Report

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A recent report from Aite Group forecasts that U.S. mobile bill payments will reach more than $200  billion in 2015.

Aite Group interviewed more than 60 companies in the Fall of 2010 and produced a 65 page report that defines and segments the mobile payment industry, and includes an analysis of the competitive and market trends.

Each one of the multiple categories of mobile payments defined in the report will experience double-digit growth, with mobile payments accounting for  US$214 billion in gross dollar volume by 2015, up from US$16 billion in 2010–a 68% compounded annual growth rate (CAGR) between 2010 and 2015.

The report references the following companies: Allstate, Amazon, American Express, Apple, AT&T, Bango, Bank of America, Barclays, Bill2Mobile, BlackBerry, Bling Nation, BOKU, Brink’s, C-Sam, Cashedge, Cellfire, Chase, Chase Paymentech, Cimbal, ClairMail, coupons.com, Coupons Sherpa, Visa’s Cybersource, Device Fidelity, Diebold, Discover, Eagle Eye Solutions, eBay, Euronet, Facebook, First Data, FIS, Fiserv, Foursquare, Gemalto, Global Payments, Google, Gowalla, Green Dot, Groupon, Harland Financial Services, Heartland Payment Systems, Hipcricket, iLoop Mobile, Inside Contactless, Intuit, Jack Henry/iPay Technologies, Kubra, MasterCard, mFoundry, Mobile Coupons, Mocapay, MoneyGram, Monitise Group, mopay, MyWebGrocer, NCR, NetSpend, Nokia, Oberthur Technologies, Obopay, OfferIQ, Online Resources, PayPal, Plastyc, Pyxis Mobile, Research-in-Motion (RIM), Roam Data (Ingenico), Roamware, Rocketbuxx, SK C&C USA, Square, Starbucks, Sybase, T-Mobile, Tetherball, 3i Infotech, Tier Technologies, TransferTo, TSYS, Twitter, U.S. Bank, VeriFone, Verizon, Vesta, Visa, ViVOtech, Waspit, Way Systems, Western Union, Wincor Nixdorf, WirelessLoyalty, Xipwire, Yelp, and Zong.

More information: Aite Group Mobile Payment Report.

Source: Aite Group

Many Mobile Banking App’s Not Secure, Says viaForensics

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On the heels of the news of PayPal’s vulnerable iPhone application, The Wall Street Journal broke news of additional vulnerabilities in other major financial institutions’ smart phone applications. These security flaws were uncovered by computer and mobile forensics firm, viaForensics, who tested smart phone applications from Bank Of America, Chase, TD Ameritrade, USAA, Wells Fargo and Vanguard, in addition to PayPal.

viaForensics has been communicating and coordinating with the financial institutions to address the flaws. Most of the institutions were able to quickly resolve the issues and release new versions of their applications.

According to American Banker 25% of the mobile banking programs analyzed received a poor rating: ” In most cases, these failures occurred because testers were able to recover a user password or other sensitive user data from a user’s mobile device. In some cases, the apps cached a security PIN or a user name and password. In other instances testers were able to recover payment history, partial credit card numbers and other transaction-related data. About a third (31%) of mobile banking apps received a “Warn” grade because a user name or app data was present, but not considered a significant risk to the user. The remaining 44% of mobile banking apps passed the test.”

viaForensics has retested the applications and released the results through appWatchdog, a free service which tests publicly available mobile applications for insecure transmissions or storage of sensitive user data. The service measures such factors as how securely the app handles user names and passwords. If not handled properly, security lapses can place the user at risk for data and financial theft. A deeper audit is offered through appSecure, which provides sophisticated security testing and recommendations for securing the app.

Sources: viaForensics, American Banker