What New ATM Transaction Types are Consumers Interested in?

Payments Journal takes a look at the data around consumer interest in new ATM transaction types.

Free virtual filing cabinets – the way to client loyalty?

From Banking Exchange -

“Startup argues for banks offering paperless bill storage at online banking site.

As banks seek ways to differentiate their online banking sites and to increase customer loyalty, paperless archival storage and simplified password access to the stored documents offers promise.

One startup company—backed by two well-established industry heavyweights—hopes to address these two as-yet-unaddressed but growing consumer needs: paperless, long-term archival of bills and statements, and reduction of the need to remember multiple passwords.”

Read more>>

How Your Phone's Camera Can Help Pay Bills

From Fox Business –

“In a snap, you can take a selfie with your pals at happy hour or shoot a photo of your family romping on the beach. Now, you can use your camera-equipped smartphone for a less exciting, but no less important task: paying bills.

Two major banks - U.S. Bank and Bank of the West - have introduced features in their mobile apps that enable customers to snap photos of their paper bills from utilities, credit card companies and mortgage servicers. The payment information is then loaded into the bank's online bill-paying system. That means no more fat-fingered typing of addresses, account numbers and other payee data on your smartphone.”

Read more>>

Understanding Digital Banking

By Stanley Epstein - Principal Associate, Citadel Advantage -

The term ‘Digital Banking’ is, to my mind, one of the most miss-understood concepts in the financial world today. Ask any group of 21^st century bankers and you will get more definitions than there are member of the group. And this confusion of definition is one of the reasons why there a lack of fire and enthusiasm for the whole idea. 

Many simply see Digital Banking as mobile banking or on-line banking. They see it as an add-on to existing and traditional banking services. All of these are too narrow focused. They fail to see the big picture.

How do I define “Digital Banking”?

Well, I have agonized over this for a while now, in part because I have been seeking a simple, succinct turn of phrase, ten or twelve words crafted into a killer definition. But even this eludes me.  

My best shot at this is;

Digital Banking is the application of technology to ensure seamless end-to-end (STP in the ‘old’ jargon) processing of banking transactions/operations; initiated by the client, ensuring maximum utility; to the client in terms of availability, usefulness and cost; to the bank in terms of reduced operating costs, zero errors and enhanced services. 

Just for a moment I would like to expand on the benefits, to both the bank and the client, just to try to illustrate a larger reality, the way that I see digital banking.

Benefits to the bank:

• Lower operating costs through;

- the elimination of costly back-office processing operations,

-   fewer (or ideally no) errors,

-   smaller branch footprint (the typical branch can become a kiosk affair, providing technology interfaces for the client to use plus the ability to deal with banking specialists via a video link) – a minimum number of actual staff will be required.

-   concentrating banking/business specialists in a single centre, who are then available to clients via a technology link (either on their mobile, pc or via a kiosk branch).

Operating cost savings of between 20% to 40% could be achieved this way, according to industry experts. Cutting costs has the opposite effect on profits – they go up.

·  

• Dumping legacy systems;

-   Make no mistake - one of the biggest drawbacks to going ‘Digital’ is this irrational clinging to legacy systems (developed in the 1960s and 1970s) that hold progress back. Banks plead the huge cost of making the change. They are wrong. The ultimate costs of not making the change are far greater.

Benefits to the customer:

• Improved services and product offerings;

-   24/7 bank services and availability through your mobile, pc or kiosk branch,

-   ‘smart banking’ applications that allow ALL transactions to be completed from the device of your choice, from beginning to end (with clear instructions and fail safe mechanisms),

-   access to a FULL range of services (savings, investments, insurance, loans, mortgages, foreign currency, etc.),

-   new useful client services such as warnings, notifications, budgeting, expenditure analyses, savings programs, calculators (you name it – the range is endless),

• Lower charges (and therefore cheaper banking),

• Banking that meets the client’s needs (not the banks).

Of course with all this data available banks should not hesitate to follow up on what their client is doing or looking at – by e-mail, on-line chat, personal phone call. Just like the popular hotel grading system ‘Trip Adviser’ does today. If you’ve been checking out hotels – they follow up in days with a ‘Are you still interested in hotels in ….?’ 

However, somewhere along the way the concept is just simply getting lost to many bankers. To put it in simple terms, after a promising start, a digital application for a banking product or service comes crashing out of the digital world, spiraling down as just another piece of paper to be handled in just the same way as it has been done in the past. The illusion vanishes; the bubble bursts; the concept is dead. And we remain trapped in the same old inefficient, disjointed and highly expensive manual processing routine of the past.

Some banks are getting it right though and for those still on the shelf it is going to be one hell of an uphill struggle to catch up when the penny (or the pound) finally drops.

To my mind the concept of the ‘Digital Bank’ is vibrant, alive and exciting. It points the way to a future where banks can really add value and where customers can secure huge benefits in terms of bank products and services that are really, really useful.

6 Reasons Why Cash is Still The King of Payments

From The Financial Brand

“Despite all of the talk about credit cards, debit cards and mobile payments, cash still dominates many forms of payments. In fact, any talk about a cashless society seems tremendously premature.

“Debit card use is up” … “The check is an antiquated form of payment” … “Mobile wallet usage is about to take off.”

You can’t open a bank or credit union publication today without hearing about the transformation (and disruption) of the payments industry. New players are emerging, with established financial institutions trying to keep up with digital payment innovations.

Despite all of this chatter, however, a Federal Reserve report from the Diary of Consumer Payment Choice (DCPC), suggests that cash is still king. The study found that consumers choose to use cash more frequently than any other payment instrument, including debit or credit cards for the following reasons:

1. Cash plays a dominant role for small-value transactions
2. Cash is the leading payment instrument for specific types of purchases
3. Cash is the key alternative when other options are not available
4. Cash is the leading payment alternative for Gen Y
5. Cash is a primary payment option for lower income segments
6. Cash can’t be hacked’

read more>>

Bill Payments via Your Smartphone

Similar to depositing your check using your phone, paying bills this way is just around the corner. Mitek systems have developed Mobile Photo Bill Pay and U.S. Bank is said to be already testing this functionality.

What we are reading … 20th March 2013

RBS to invest £700 million in retail operations http://www.finextra.com/News/FullStory.aspx?newsitemid=24643

Next in Mobile Banking: Photo Bill Payments http://nyti.ms/ZKIRbH

Using Remote Deposit Capture to Extend Your Reach http://dld.bz/cqKVg

Fed Rebukes Goldman Sachs and JPMorgan Chase Over Capital Plans http://shar.es/exm4u

Cypriot bank 'bail in' levy to save sector, but sparks fears of fresh eurozone crisis http://dld.bz/crrn8

Twitter Just Crushed Wall Street After The Cyprus Bailout http://dld.bz/crryj

Chart of the Day