Payments on the Move

By Michael Scheibach, Executive Editor, BankNews

New research from Fiserv reveals that consumers are using multiple channels for payments and, more significant, changing these channels as they go.

The 2011 Billing Household Survey found that nearly 20 percent of online consumer households change the way they pay bills every month. Moreover, the survey revealed that utilities, telecommunications providers and insurers are the top recipients of last-minute and one-time bill payments.

"This year's Billing Household Survey demonstrates that consumers are looking to their banks and billers for multiple billing and payment options that are quick and easy, and can change to meet household needs and expectations," said Jardon Bouska, division president, Biller Solutions, Fiserv. "Billing and payment is not just about the transaction; it is a recurring strategic opportunity for companies to deepen customer relationships and reduce costs."

Other findings:

• Consumers pay in multiple ways -- Consumers indicate it is important for billers to provide multiple payment options and many report changing the way they pay their bills month-to-month due to timing and funds availability. The study found a number of factors driving the demand for choice including the consumer's financial situations and changing technology. Paying bills online at biller or bank sites is most common followed by check and auto debit.

• Mobile bill payments emerging -- Six million households paid at least one bill via smartphone in the past year. Billers need to pay greater attention to their mobile experience, as 30 percent of online consumers have visited a biller's site using their mobile web browser to access a monthly bill. The most popular bills paid by phone include phone, cable, credit card and utilities.

• Biller sites popular, particularly for last minute and one-time payments -- Two thirds of consumers visit their billers' websites, with the majority doing so for billing and payment related activities. These sites are a first choice for consumers when making last minute and one-time payments.

• Increasing interest in electronic bills (e-bills) -- Thirty two percent of consumers who pay bills at their bank site already receive e-bills and 38 percent of non-recipients are interested, an all-time high. In addition, the number of consumers interested in receiving e-bills at a biller's site increased to 22 percent versus 17 percent in 2010. 

Additional findings can be downloaded at www.fiserv.com/research-papers.htm. 

Oh, Where, Oh, Where Has Green Banking Gone?

By Michael Scheibach, Executive Editor, BankNews

Three years ago, BankNews Media published a digital magazine called Green Banking, sponsored a website called Green Banking Central, and created a LinkedIn group called Green Banking for Bank Professionals. We also sponsored the annual Green Leaf Award, recognizing community banks making a difference for the environment -- and had many entries.

Today, as we enter 2012, the digital magazine is gone, the website is gone, the Green Leaf Award is gone. Also missing are the news releases about banks going green, becoming LEED certified, introducing green products for customers.

The only constant is Green Banking for Bank Professionals, which now has more than 400 members. Many of these, however, are in non-banking positions -- consultants and companies serving financial institutions. Click here to join.

Where is green banking today? I would sure like to know.


Send me your thoughts.

Community Banks on the Winning Team

By Michael Scheibach, Executive Editor, BankNews

The Move Your Money Project and Bank Transfer Day helped set the anti-big-bank campaign in motion. And although credit unions have seen an upswing in customers, so, too, have community banks nationwide.

Quoting the Christian Science Monitor: "Bankers at the roughly 15,000 community banks and credit unions across the United States have been spending Monday running the numbers. And this is no routine tally. That's because it's two days after Bank Transfer Day, the Internet-launched call to move money from big, transnational financial institutions down to the neighborhood level. Now, the beneficiaries of this social action are reporting that Saturday was, well, a small-town banker's dream, with customers jostling for a parking spot and standing in line to open new accounts."

The California's Circle Bank, for example, opened 33 new accounts in its six-branch system (totaling $188,756) and four new business accounts (totaling $12,720) through its website as a result of Bank Transfer Day.

Kimberly Kaselionis, CEO of Circle Bank, was quoted in the Monitor as saying, “The branches had a flurry of activity, and we treated it as a celebration of community and a liberation from big-bank neglect."

On the other coast, in Portsmouth, N.H., Optima Bank and Trust is capitalizing on the movement, as well. 

Says Daniel Morrison, president and CEO of Optima, "We have absolutely seen a movement to us from big banks. I see a long-term trend. Big banks are getting bigger, and service is getting poorer."

Community banks must not relax, however, because credit unions are really marketing their "down home nice guy" image. Stay tuned.

"Go Local" Should Be the Battle Cry

By Michael Scheibach, Executive Editor, BankNews

Oh, yes, "Bank Transfer Day" - and the whole anti-Big Bank  movement - is making the national news. And thousands of unhappy campers are participating. And, unfortunately, much of the media has the misguided notion that "transfer" refers only to credit unions -- forgetting about community banks, which, by the way, are a better choice for those people looking for FDIC-insured accounts and a strong, diversified family of services to choose from, not simply free checking.

Rather than "Bank Transfer," the battle cry should be "Go Local." Three cheers for ICBA's "Go Local" campaign, which is promoting the many benefits of community banks.

“By going local and banking locally with your community bank, consumers can make a real difference in the lives of their neighbors and the future of their community,” said Sal Marranca, ICBA chairman and president and CEO of Cattaraugus County Bank, Little Valley, N.Y. “They’ll be making a hometown investment they can be proud of.  After all, the money they deposit in their community bank will be reinvested in ways that drive their local economy, such as in the form of loans to local residents who want to buy a home or to small business owners who are looking to open shop on Main Street.”

Community banks need to promote "Go Local" to their own customers, as well as to the communities they serve, to ensure that everyone clearly understands the value of the community banks.

BankNews would like to hear how your community bank is responding to the backlash against Big Banks. Send me your comments at mscheibach@banknews.com.

Mobile Banking Is Expanding to RDC

By Michael Scheibach, Executive Editor, BankNews

Yet another report confirms what we already know: Mobile banking is here and gaining momentum rapidly.

According to Javelin Strategy & Research's latest report, "2011 -- 2012 Mobile Banking Vendor Scorecard: Mobile Banking Has Moved from a 'Nice-to-Have' to a 'Must-Have' Channel," reveals that consumer adoption of mobile banking has increased an incredible 60 percent this year. The number of people using mobile banking is now at 30 percent - up from 19 percent last year.

The report also says that mobile banking via SMS text, mobile browser and downloadable apps "is emerging as the new norm, with four out of five vendors now offering it." Mobile banking is a constantly evolving service, however.

At the recent RDC Summit in Orlando, the focus was on mobile remote deposit capture (or mRDC). One speaker summed it up by saying mRDC is "on fire." Here are just a few tidbits from the summit:

     • Mobile is becoming increasingly important in consumer bank selection - from being unimportant for 75 percent two years ago, to 39 percent now
     • Mobile RDC is the No. 1 feature for which consumers switch banks
     • Among mobile banking adopters, mRDC increases retention
     • Mobile banking adoption will hit 50 percent by 2016
     • Mobile RDC adoption will hit 38 percent by 2016

Unfortunately, community banks, in the words of one speaker, have been "missing in action" when it comes to introducing mRDC, although this appears to be changing over the last few months. Few community banks were among attendees at the RDC Summit, but I expect many more to be there next year. If you're not familiar with the RDC Summit, visit www.RDCSummit.com.

Be sure to read the December issue of BankNews, which will feature articles on the impact of RDC on community banks.

Sybase Makes Mark with mBanking Solutions

By Michael Scheibach, Executive Editor, BankNews magazine

The rapidly increasing number of companies with mobile banking solutions has had a twofold effect: first, more companies in the mobile arena have resulted in improved technology and more affordable options; and, second, more companies in the mobile arena have made the selection process for a mobile banking partner more arduous.

A question being asked by many financial decision-makers: If I choose this vendor today, will another one have a better solution in a year, or even six months?

One company now in the mix comes with strong credentials:
Sybase, a globel leader in delivering enterprise and mobile software to manage, analyze and mobilize information. Its Sybase mbanking 365 solution allows banks to roll out mobile services incrementally. According to Diarmuid Mallon (right), senior product marketing manager for Sybase 365, banks can launch the product by providing mobile alerts and self-service features such as account balance(s), money transfer, bill payment and location-based services (e.g., branch finder). For business users, services can include current/previous day balance and transaction detail, current-day snapshots, pending transaction approvals, wire release and intra-company funds transfers.

The company's Sybase mPayments 365 allows new service offerings, such as micropayments, bilhttp://www.blogger.com/img/blank.gifl pay and top-ups. "You can purchase goods from merchants, top-off credit balances for airtime, or make person-to-person payments, loan payments, bill payments and more," says Mallon.

Andrew Mikesell (left), mcommerce product director for Sybase, sees an evolutionary path from mbanking to mpayments, with exciting results.

"In terms of ROI," he says, "initial mbanking services are generally focused on cost savings from moving existing transactions into the lower cost channels. It is only as the services move from non-transactional to transactional services that new services can be created, and hence new revenue. We don't see mobile banking as an end-point, but rather the start of the path to a complete range of mcommerce services. We strongly believe a complete mcommerce solution is comprised of mbanking, mpayments, mremittance and mCRM services (vouchers, loyalty, customer engagement and marketing)."

To learn more about Sybase 365, check out the company's website: www.Sybase.com.

And be sure to read my Technology Focus column in the October issue of BankNews for more about Sybase mbanking and mcommerce solutions.

Banks and Debit Networks Prepare for Future

By Michael Scheibach, Executive Editor, BankNews

Recent regulations set down by the Federal Reserve Board concerning debit networks have many banks on alert. The regulations, implemented in accordance with the Durbin amendment of the Dodd-Frank Wall Street Reform and Consumer Protection Act, require many banks now using a single network to diversify by joining an additional, unaffiliated network.

The August issue of BankNews features an article by Kevin Barry, general manager of the STAR Network, on the impact of these regulations. Click here to read the article in our digital edition.

STAR, a leading PIN debit networks, is backed its parent company, First Data. According to the company, "STAR continues to deliver innovative product advancements in security, online payments and network management that simplify service delivery for members and improve the end-user experience."

Two other networks, SHAZAM and PULSE, also responding to the new regulations, are quoted in the August issue, as well.

SHAZAM is a member-owned network committed to open access and member control that owns its own processing systems. According to a spokesperson, SHAZAM is "focused on maintaining and developing strategic business partnerships with each of our participating financial institutions and committed to helping them improve their technological capabilities in order to compete effectively in their local markets."

PULSE offers U.S. debit card issuers broad national reach and a comprehensive set of debit products, including ATM services, PIN and signature point-of-sale debit products, PINless bill payment, Internet PIN debit, fraud detection services, and an optional surcharge-free ATM alliance.

From my perspective, these new regulations are another element in the changing landscape in "traditional" banking. And although the Durbin amendment is a regulatory change, other, and perhaps more significant, changes are revolving around technology.

BankNews asked each company to discuss briefly how it is dealing with technological changes, such as mobile payments.

SHAZAM: SHAZAM provides a comprehensive suite of services, such as card services (including gift cards); debit MasterCard and Visa debit processing; switch services; Card Authorization Service (CAS); ATM services; Privileged Status (surcharge-free ATM alliance); SHAZAM R.A.D.A.R (Risk Assessment, Detection, and Response); Automated Clearing House (ACH) services; merchant services; and support services.

SHAZAM is in the process of deploying a mobile infrastructure that will allow us to enhance card management and fraud alerting. We will add payment applications to this platform over time, including person-to-person transfers and near field communications for contactless payments.

FIRST DATA: STAR’s parent company, First Data, has an innovative mobile roadmap that addresses today’s changing technology and consumer demands with a focus on mobile payments in particular. Most recently, First Data teamed with Google, Citi, MasterCard and Sprint to unveil Google Wallet, a new app that essentially makes your phone your wallet, letting consumers simply tap and pay when they shop.

The STAR Network last year introduced STAR CertiFlash, the aforementioned PIN debit application that advances point-of-sale (POS) security using one-time card number technology.

STAR CertiFlash is designed to evolve with the mobile payments landscape. The STAR specification supports STAR transactions with RFID implementations now, but was written with the future in mind and can be used when payments move to mobile. The application works with currently available payment devices such as fobs, payment stickers or any consumer device that incorporates an SD micro-chip. It is designed to migrate to use on NFC chips as well, when those are available on mobile handsets.

As consumers increasingly rely on their mobile phones in their everyday lives, incorporating STAR CertiFlash to increase security in mobile phone contactless payments is an obvious next step.

PULSE: PULSE also offers a back-to-basics approach focusing on the advantages that set our service apart: personal service through a http://www.blogger.com/img/blank.gifdedicahttp://www.blogger.com/img/blank.gifted account manager; a consultative relationship that provides participants customized solutions for maximizing the value of their electronic payments programs; continued commitment to providing professional development programs, http://www.blogger.com/img/blank.gifresearch, debit-focused publications and industry research; and a commitment to continuing to serve as a source of vital information and leadership for our participants on the interchange regulations.

PULSE intends to offer a suite of secure, cost-effective mobile payment product offerings to issuers. We are investing our time and resources to ensure that our mobile payments solution will be accessible to a majority of consumers, regardless of device, carrier or mobile operating system.

To learn more, visit the websites for Star (First Data), SHAZAM and PULSE.

On the Move . . . and Going Mobile

By Michael Scheibach, Executive Editor, BankNews

Whether in your role as a bank professional or as a consumer, it's hard not to be excited about the possibilities associated with mobile technology.

In my professional role, I recently attended two info-packed conferences: the Mobile Banking & Emerging Technologies Summit in New Orleans; and the Prepaid Cards & Mobile Commerce Conference in Denver. Speakers included leading bankers with a clear vision and strategic plan for mobile banking and mobile payments, as well as such non-banking powerhouses as eBay, which will surpass $4 billion in mobile payments this year.

As one speaker said, 2011 is "The Year of Mobile Payments." The next step in mobile banking offers opportunities - and some trepidation - for banks, and exciting new possibilities for consumers.

Statistics tend to wave in the wind, but still . . .

-- 75 million people in the U.S. own smartphones.

-- AT&T, Verizon and T-Mobile, collectively, have more than 270 mobile customers, just not all smartphones ... yet.

-- Android has surpassed Apple in number of devices, with 400,000 Android devices being sold daily.

-- By end of this year, there will be 53 million iPads sold worldwide. And other tablets will most definitely increase this number substantially.

Banks have gotten the message: The world is going mobile. What remains is the implementation of technology to keep banks at the forefront of mobile payments. And this will take both commitment and dollars.

Fraud Alert

By Michael Scheibach, Executive Editor

Financial fraud has never been more serious — and costly — for American businesses. According to the “2011 Business Banking Trust Study,” just released by Guardian Analytics, 56 percent of businesses responding to the survey experienced fraud in the last 12 months. Of these, 75 percent were victims of corporate account takeover or online fraud. The FBI estimates that corporate account takeover, in which fraudsters redirect ACH money transfers for legitimate business payments to their illicit accounts, could cost companies $1 billion this year alone.

“The level of ACH risk for a financial institution continues to rise as fraudsters become increasingly sophisticated,” said Barry Rich, chief financial officer and enterprise risk management group head at CapitalMark Bank & Trust, a 4-year-old de novo bank in Chattanooga, Tenn. “These criminals are beginning to target community banks in the belief they are more susceptible to attack.”

Banks are the front-line defense against financial fraud, which is increasingly challenging as payment channels expand, thus offering more avenues for fraudulent activity.

“Customers rely on anytime, anywhere access to payment information that can be easily integrated into their workflows and allows them to be more efficient,” said Uma Wilson, vicehttp://www.blogger.com/img/blank.gif president, product management and development at UMB Bank in Kansas City. “As companies continue to operate daily in an open and highly networked online environment, safeguarding this information requires a delicate balancing act to provide ease of use and security.”

Connie Livingston, vice president, treasury management product manager, at Regions Bank, headquartered in Birmingham, Ala., also emphasizes the critical role for banks.

“Protecting the security of information is something Regions takes very seriously, and we are committed to providing advanced solutions to mitigate our clients’ exposure to fraud,” she said. “We have multiple systems in place that are client-facing with multi-factor authentication as well as internal to ensure the security of information. We also believe that client education of best practices is a critical component of preventing corporate account takeover.”

Click here for the rest of the column.

Mobile Customers. Can You Keep Up?

By Michael Scheibach, Executive Editor

Jack Henry recently announced its 350th mobile banking customer. It introduced its mobile banking solution, goDough, in 2007. Fiserv just acquired M-Com to enhance its mobile banking and payments capabilities. Mitek has introduced a mobile ACH enrollment solution. Fifth Third Processing Solutions and 3i Infotech have joined together to introduce a mobile check deposit solution.

Get the picture? Vendors are moving rapidly to meet the growing demand by banks for mobile banking and mobile payments solutions. The race is on to keep up with increasingly mobile bank customers and, even more important, those potential customers looking for a bank that can meet their mobile needs (and demands).

You can't drive somewhere without talking to someone on a cell phone. A growing number of people can't drive to the store without checking their bank account balance. And, coming soon, people won't go shopping without the ability for make a mobile payment.

Citing studies is getting old. But most predict 80-100 million mobile users in the next two or three years. Americans using mobile payments will only be a small percentage of this number, but a rapidly increasing one.

Another, and perhaps more lucrative development, is the rise in corporate mobile banking, which will allow businesses to review and approve payments, as well as to perform basic functions such as checking balances and transferring funds.

Banks are, indeed, going mobile -- every day. Banks are introducing mobile banking apps -- every day.

If you want to keep up on mobile banking, click on Mobile Banking News under the News/Events tab at BankNews.com.

And if your bank is not in the news, send your press release to me.

Grab a Flight to New Orleans for Mobile Banking Summit

By Michael Scheibach, Executive Editor

A new report by comScore, Inc., a leader in measuring the digital world, finds that in the last quarter of 2010, 30 million Americans were using mobile devices to access financial services accounts (bank, credit card or brokerage), an increase of 54 percent from the same period in 2009. According to TowerGroup, more than 53 million Americans will become mobile banking users in the next two years. By 2012, the number of "remote transactors" — customers performing more than 75 percent of their banking via a self-service channel (online banking/ATMs) — will reach almost half of U.S. banking customers.

Mobile banking has arrived. And banks across the country — large and small — have introduced mobile banking, or have mobile banking in their plans.

Whether your bank falls in the first category or the second, the 5th Annual Mobile Banking & Emerging Applications Summit should be on your must-attend calendar. The Summit is being held June 5-7 at the Hilton Riverside Hotel in New Orleans.

Here are some of the things you will hear and learn:

* Lessons learned from banks of all sizes
* The ROI for banks that have deployed mobile services
* Security and risk management
* The right solution and mix of services for your customers

You'll get an update on mobile payments, including where we are with NFC capabilities, P2P payments and even social media-driven payments.

The next phase of mobile financial services will be covered, as well:

* Remote deposit capture
* Corporate mobile banking
* Location-based services
* Mobile financial services beyond the mobile phone
* What mobile financial services will look like in 10 years

First Tennessee Bank, Bank of the West, Suntrust Banks and Sun National Bank are among the speakers. Plus, all the leading players in mobile banking technology and applications will be represented.

For more information, visit the Mobile Banking & Emerging Applications Summit website.

Business eBanking at Union Community Bank

Union Community Bank, based in Marietta, Pa., is ahead of the curve for community banks offering business/commercial clients ebanking services. Businesses may choose from four options: eBanking Plan, Business eBanking Plan, Commercial eBanking Plan and Commercial eBanking Plan Plus. This approach provides flexibility for everyone from the self-employed individual to the larger, multi-user business.

Depending on the specific plan, business ebanking includes the following features:

* Viewing account balances and transaction details, including check images and bank statements
* Scheduling future and repeating transfers between accounts
* Implementing direct deposit of payroll (using templates or an upload)
* Making state and federal tax payments
* Initiating collections with ACH debits
* Creating a stop payment request for a single check or a range of checks
* Making loan payments and request loan advances

Union Community Bank is also ensuring that ebanking accounts are secure through a multiple authentication system.

For more information, including technical specifications for business clients, visit the bank's website at www.UnionCommunityBank.com.

If your bank offers business ebanking, please let me know. I'd like to hear more about how banks are meeting the ebanking needs of their customers.

Online Banking Fraud - Chinese Style

By Michael Scheibach, Executive Editor

Online banking fraud continues to plague the financial industry. Earlier this week, the FBI, the Financial Services Information Sharing and Analysis Center, and the Internet Crime Complaint Center released information about unauthorized wire transfers to Chinese companies located near the Russian border occurring between March 2010 and April 2011.

According to the report, 20 incidents occurred involving online banking. The release said, "The online banking credentials of small to medium-sized U.S. businesses were compromised and used to initiate wire transfers to Chinese economic and trade companies." The total of the attempted fraud was $20 million, but the actual victim loss amounted to $11 million.

Any person using a computer within a company is susceptible to malware, a phishing email or a malicious website. And when this person initiates a funds transfer, he or she becomes a potential fraud victim.

The report reads: "When the authorized user attempts to log in to the user's bank website, the user is typically redirected to another web page stating the bank website is under maintenance or is unable to access the accounts. While the user is experiencing log-on issues, malicious actors initiate the unauthorized transfers to commercial accounts held at intermediary banks typically located in New York. Account funds are then transferred to the Chinese economic and trade bank account."

These transfers range from $50,000 to $985,000. According to the FBI, the malicious actors were most successful when wire transfers were less than $500,000. As soon as these transfers went through, the money was withdrawn immediately from or transferred out of the recipients' accounts.

In addition to large transfers, domestic ACH and wire transfers also were sent to "money mules" in the U.S. within minutes of conducting the overseas transfers. The domestic wire transfers ranged from $200 to $200,000; ACH transfers ranged from $222,500 to $1.275 million.

The bad news: The culprits of these unauthorized transfers are unknown. In fact, no one knows whether the Chinese accounts were the final destination, or whether the funds were transferred elsewhere.

So what to do? Banks need to help protect themselves and their business clients with fraud alert, detection and protection systems. And they must educate their customers about the potential of this type of fraud.

Be sure to read my article on online/mobile banking fraud in the June issue of BankNews.

Mobile Banking Fraud - Are You Prepared?

By Michael Scheibach, Executive Editor

Today, more than 80 percent of adults in Europe and the United States own a mobile device. According to Forrester Research, some 29 million Americans are doing mobile banking, and this number is expected to pass 50 million in the next three years. The Millennial Generation (18 to 29) is skipping the online banking phase altogether and view mobile banking as, well, "banking."

So what does this all mean for the banking industry? It means banks better be ready to counter the growing fraud threats associated with mobile banking.

Scott Perry, director of authentication and fraud at Entrust, in a white paper titled "Addressing Advanced Fraud Threats in Today's Mobile Environment," writes: "While many safeguards are deployed within financial institutions, criminals are evolving their techniques rapidly. Phishing, smishing and spear-phishing attacks are now designed to deploy malware, which takes over users' browsers and mobile devices to execute malicious transactions."

Perry points out that mobile devices are particularly susceptible to attack for several reasons. At the top of the list is the potential malware threat from downloading third-party apps. In addition, the frequent checking of email from mobile devices and current limitations of mobile browsers make it more difficult to identify fraudulent messages and websites.

Because of the escalating threats to mobile banking and mobile payments, the Federal Financial Institutions Examination Council (FFIEC) is working to strengthen security measures for online and mobile banking.

Perry suggests three areas that should be addressed by banks:

1. Banks should adopt a versatile authentication platform that supports a wide range of options, such as transparent authentication, physical methods of authentication (e.g., tokens or grid cards), and "soft tokens" that leverage mobile devices.

2. Banks should consider out-of-band transaction verification using a mobile application, such as SMS or voice dial-out with a one-time security code.

3. Banks should also explore solutions that actually embed security features of the authentication platform directly into a mobile application.

To learn more about mobile security, visit Entrust.com. This is a subject that won't go away.

Corporate Account Takeover Fraud Remains a Serious Problem

By Michael Scheibach, Executive Editor

Guardian Analytics, specializing in predictive analytics-based fraud prevention, has just released a new study on the pervasiveness of fraud targeting small and medium businesses (SMBs) and the impact it has on businesses' relationships with their banks. Guardian Analytics worked on the report with Ponemon Institute, an independent research firm.

The "2011 Business Banking Trust Study," which includes responses from 533 executives and business owners, reports that little is being done to address corporate account takeover and fraud affecting businesses and banks. The study reports: "The data shows that fraud is still pervasive, money is leaving accounts unnoticed at an alarming rate, and businesses will leave their banks because of it."

The report goes on to say, "While businesses are taking some precautions, their overall expectation is that banks will protect them."

A few highlights:

- 56 percent of businesses experienced fraud in the last 12 months. Of these, 61 percent were victimized more than once.
- In 78 percent of fraud cases, banks failed to catch fraud involving the illegal transfer of funds or other nefarious practices, such as information identity theft.
- Banks were unable to recover funds in 68 percent of cases.
- 43 percent of businesses said they had changed banks after a fraud incident.

Click here to download the study.

My article in the June issue of BankNews magazine will focus on the issue of fraud and how four banks are addressing the problem.

Mark It Down: Mobile Banking Summit, June 5-7, New Orleans

By Michael Scheibach, Executive Editor

A new report by comScore, Inc., a leader in measuring the digital world, finds that in the last quarter of 2010, 30 million Americans were using mobile devices to access financial services accounts (bank, credit card or brokerage), an increase of 54 percent from the same period in 2009. According to TowerGroup, more than 53 million Americans will become mobile banking users in the next two years. By 2012, the number of "remote transactors" — customers performing more than 75 percent of their banking via a self-service channel (online banking/ATMs) — will reach almost half of U.S. banking customers.

Mobile banking has arrived. And banks across the country — large and small — have introduced mobile banking, or have mobile banking in their plans.

Whether your bank falls in the first category or the second, the 5th Annual Mobile Banking & Emerging Applications Summit should be on your must-attend calendar. The Summit is being held June 5-7 at the Hilton Riverside Hotel in New Orleans.

Here are some of the things you will hear and learn:

* Lessons learned from banks of all sizes
* The ROI for banks that have deployed mobile services
* Security and risk management
* The right solution and mix of services for your customers

You'll get an update on mobile payments, including where we are with NFC capabilities, P2P payments and even social media-driven payments.

The next phase of mobile financial services will be covered, as well:

* Remote deposit capture
* Corporate mobile banking
* Location-based services
* Mobile financial services beyond the mobile phone
* What mobile financial services will look like in 10 years

First Tennessee Bank, Bank of the West, Suntrust Banks and Sun National Bank are among the speakers. Plus, all the leading players in mobile banking technology and applications will be represented.

For more information, visit the Mobile Banking & Emerging Applications Summit website.

Mobile Customers. Can You Keep Up?

By Michael Scheibach, Executive Editor

Jack Henry recently announced its 350th mobile banking customer. It introduced its mobile banking solution, goDough, in 2007. Fiserv just acquired M-Com to enhance its mobile banking and payments capabilities. Mitek has introduced a mobile ACH enrollment solution. Fifth Third Processing Solutions and 3i Infotech have joined together to introduce a mobile check deposit solution.

Get the picture? Vendors are moving rapidly to meet the growing demand by banks for mobile banking and mobile payments solutions. The race is on to keep up with increasingly mobile bank customers and, even more important, those potential customers looking for a bank that can meet their mobile needs (and demands).

You can't drive somewhere without talking to someone on a cell phone. A growing number of people can't drive to the store without checking their bank account balance. And, coming soon, people won't go shopping without the ability for make a mobile payment.

Citing studies is getting old. But most predict 80-100 million mobile users in the next two or three years. Americans using mobile payments will only be a small percentage of this number, but a rapidly increasing one.

Another, and perhaps more lucrative development, is the rise in corporate mobile banking, which will allow businesses to review and approve payments, as well as to perform basic functions such as checking balances and transferring funds.

Banks are, indeed, going mobile -- every day. Banks are introducing mobile banking apps -- every day.

If you want to keep up on mobile banking, click on Mobile Banking News under the News/Events tab at BankNews.com.

And if your bank is not in the news, send your press release to me.

Fast and Furious, Part IV

Prepaid cards and mobile commerce -- two technologies driving financial institutions into an unchartered future where banking, as we know it, will be left in the dust, so to speak.

Fiserv, always ahead of the curve, has just introduced a new set of prepaid solutions. In short, the company is targeting large financial institutions and corporation, offering them prepaid processing, turnkey program management, and support of general-purpose reloadable and payroll cards.

This is being made possible by Fiserv's acquisition of Maverick Network Solutions, a Delaware-based provider of advanced prepaid and reward and incentive card programs. As the saying goes, why reinvent the wheel when it makes more sense to purchase existing technology.

On the mobile commerce front, Mitek Systems is making news with its Mobile ACH Enrollment solution, which allows mobile-payment companies to help consumers enroll their checking accounts as funding sources for mobile payments.

Consumers simply snap photos of blank checks with their smartphone cameras. Mitek's application captures all the information needed for enrolling their accounts.

If you want to stay up-to-date on the latest mobile happenings, mark your calendar. The 2nd Mobile Commerce Conference is being held June 20-22 in Denver. For more information, visit the conference website.

The Greening of Chicago

By Michael Scheibach, Executive Editor

Three banks closed this week.

Community banks worried about new regulatory requirements.

Small banks strive to compete with big banks.

Stagnant salaries, reduced benefits and more downsizing at banks around the country.

Yikes! The news is rather depressing. Except for news coming out of Chicago, where GreenChoice Bank, positioned as Chicago's only green community bank, has opened for business.

Steve Sherman, the bank's founder and chief operating officer, is a second-generation community banker with a commitment to helping the community and the environment -- at the same time.

Sherman acquired Family Federal in July 2010. And since that time, he and his equally dedicated staff have worked behind the scenes to transform a former traditional community bank into a true green bank . . . inside and out.

GreenChoice is operating out of two former Family Federal branches in Cicero and Lockport, Ill. Later this year, however, the bank will become the official bank of the Green Exchange, a 272,000-square-foot former factory that is being converted according to LEED Platinum standards.

GreenChoice is a great story: A community bank opening its doors during difficult that has a mission of helping the community while promoting the importance of saving the planet.

For more about GreenChoice Bank, watch for my Technology Focus column in the March issue of BankNews magazine.

On the European Mobile Front

By Michael Scheibach, Executive Editor

If you've attended any banking conferences over the last couple of years, you've undoubtedly heard that telecom service providers (e.g., Verizon, Sprint, AT&T) loom as the biggest potential threat to traditional banking in the payments arena.

Well, listen to this:

Ericsson, which calls itself the world's biggest mobile telecom equipment maker, is launching mobile banking services - primarily money transfers. Although focusing on Europe first, the company has global aspirations. Estimated revenues in Europe from financial services over the mobile channel are $27.7 billion by 2015 - a significant sum of money.

According to a company press release, the mobile banking service "will be a rival to traditional money transfer operators like Western Union and MoneyGram initially, but could replace credit cards in the future." Ericsson said mobile payments and person-to-person money transfers are likely to become some of the most-used mobile applications in the next two or three years. And I think we'd all agree on this.

Here is the heart of the story, though. Ericsson is partnering with a bank for its European service; however, it's long-range global strategy is to sell the service to telecoms around the world and connect them in what it calls a "cross-border system."

A Brave New World is coming.

Costs, Capital ... and Delivery Channels

By Michael Scheibach

A recent discussion on LinkedIn's Community Bank Group asked about the top three challenges facing community banks. The answers ranged from costs and capital, to compliance and delivery channels.

In many respects, delivery channels can be considered the fundamental challenge because the costs associated with staying ahead of the technology curve requires capital.

Karen Massey, senior research analyst for IDC Financial Insights and author of a 2006 survey of U.S. consumer channel preference, said "Understanding the dynamics of channel utilization is critical for financial institutions and important as well for the vendors that serve the industry. Simply put, consumers want their banks to offer convenient, secure access, and they want their bank to know who they are."

In 2006, minimal changes were reported in branch and ATM use; however, call centers and online banking were showing significant growth. Since then, the introduction of smartphones has escalated the growth of mobile banking while raising the bar on expectations of the online delivery channel (e.g., e-statements and e-payments), raising questions about branch expansion, and redefining the role of the ATM in a bank's overall delivery strategy.

Another question might be appropriate: What are the three biggest challenges facing community banks in retail delivery channels?

Calls on the Run

By Michael Scheibach, Executive Editor

Mobile banking is expanding. We can all agree on this statement. But a recent survey by IDC Financial Insights revealed a rather interesting twist.

According to a web poll of 385 individuals about their use of mobile banking, 53 of the respondents indicated they have used a mobile device to interact with their bank. That's 14 percent, which is in line with other surveys.

The twist, however, was that the vast majority used a mobile device to call the bank's toll-free number!

The breakdown was as follows (respondents could choose more than one method):

-- 61.2 percent called the banks toll-free number using their mobile device

-- 40.8 percent used a mobile browser

-- 17.5 percent used a downloadable application

-- 15.5 percent used SMS/text messaging

Another interesting aspect of this small survey was that age was not a factor in calling the toll-free number. Sixty percent of those 18-30 called the number, and 61 percent over 50 called the number.

The major differences came in more technical applications. For example, 21 percent of the 18-30 group used downloadable apps, while only 9.7 percent of those over 50 did the same.

This survey doesn't offer much more than fun facts for conversation. But it just may shed a little more light on the world of mobile banking.