Saturday, February 21, 2009

Building Online Banking for Gen Y

Marketing to generation Y or X is continuing to gain imporantance, financial services not being an exception. During the past three months, 69 per cent of generation X/Yers have shopped online and 65 per cent used online banking—more than any other group. And not surprisingly, this generation identifies the online / mobile offering of a bank to be one of the most important factors in selecting a new bank. Todd Lesher, division president of Fiserv Electronic Banking Services and Shelby Hutcherson, vice president of the innovative solutions group at Synovus Financial recently collaborated to provide insight how to build a online banking experience for this generation.

Not Your Father's Bank: Building Online Banking for Gen Y

Growing up in a world immersed in digital technologies, members of Generation Y have the highest of expectations on how they want to interact with their banks online. Born at the dawn of the digital age in the early 1980s, the oldest among Generation Y have never known a world without personal computers and video games. The youngest of these so-called Millennials are still in their early teens, using their cell phones for texting more than talking and counting their "friends" on MySpace.

Millennials may not have the most money or be the most profitable to banks -- not yet, anyway. One day Generation Y, the largest U.S. generation since the Baby Boomers, will outnumber their parents' Boomer generation and control the lion's share of financial assets in this country. In the meantime, financial institutions need to keep a close eye on this consumer group because they represent the future -- and they're the ones for whom we're building the next generation of online banking today.

Still, a common thread among all of Generation Y is technology, especially when it supports a lifestyle need and is embedded into everything they do. No doubt about it, this tech-savvy generation won't be easy to please. In this next generation of online banking, banks will develop innovative online financial services that deliver a rich, innovative experience to attract and retain profitable customers. For example, Synovus Financial, a US$34 billion financial services holding company, headquartered in Columbus, Ga., delivers online and mobile financial services keeping a key principle in mind: Build it not only for today's customers but also for tomorrow's.

User Experience: The Priority Gen Yers won't settle for their father's online banking experience delivered in a bland interface that barely gets the job done and isn't fun to use. To go toe-to-toe with the emerging social networks being created, banks of all sizes with investments in the online channel must deliver a comparable Web 2.0 experience or they risk losing some of their Millennial customers and other consumer segments. Banks must provide an online banking experience in which pages load quickly, transactions post nearly in real-time, and fewer clicks are required to navigate the site. Online banking applications must deliver all relevant financial information at a glance on a single screen for easy access: electronic bills and payments, account balances, transfers and personal money management tools. All these enhancements will help all consumers better manage their finances while providing a rich user experience.

Understand Consumer Behavior: Banks should make an early commitment to delivering a unique and intuitive online banking experience that encourages service adoption and avid use. This effort begins with partnering with solution providers that invest heavily in research and development to help understand consumer behavior through surveys, usability studies and advanced analytics. These findings provide valuable product design direction and can help banks fully understand and market to their customer segments. Given the turmoil in the financial markets, customers are looking for banks to provide them with greater control in managing their accounts and tracking their expenses and cash flow.

Integrated Online Experience: Sometimes it's the simplest improvements that yield the greatest results. For example, Synovus implemented a simple functional user enhancement that gave consumers direct access to online bill payment features from within the online banking user interface. Consumer enrollments in online bill pay in the first month jumped a surprising 50 percent. They also saw an average 9 percent lift in payment volumes during the 90-day program. The next generation of online banking seamlessly integrates all commonly viewed account information -- bill pay, balances, transfers and personal money management -- onto a single screen, for enhanced usability and a better consumer experience. Rich Internet platforms such as Ajax and Silverlight transform yesterday's flat, one-dimensional interface into a dynamic, multi-dimensional online banking and bill payment experience.

Go Where the Users Are: Mobile Creating an optimal user experience also means going where users are. For Millennials, that means the cell phone or smartphone, the device they interact with more than any other.When Synovus was among the first to pilot mobile banking in Georgia at Athens First Bank and Trust Company in 2007, 42 percent of those using the service were members of Generation Y. That's not surprising, given that AFB&T serves Athens, Ga., home of the University of Georgia and a large population of Millennials who stay glued to their iPhones and other smart devices. The mobile pilot demonstrated a strong commitment to meeting consumers on their terms and a forward-looking approach to adoption of new technology. Since the pilot, they have rolled out the downloaded mobile banking application to Synovus' 34 banks and their customers, and the adoption rate has far exceeded expectations.

Mobile is an emerging channel, currently used mainly for balance refreshes and transfers. In the near future, banks will need to provide secure mobile banking solutions that address consumers' wide-ranging needs and preferences through multiple modes, including text and browser, and downloaded applications. For financial institutions, it's essential to aggressively move into the mobile channel where the next generation of users will be, because today's wireless devices are evolving into tomorrow's wireless wallets.

Personalize, Personalize, Personalize: Younger consumers don't just expect their bank to serve up personalized content based on their online behavior and account transactions. They expect some measure of control over preferences such as frequency and timing of alerts, as well as how their financial information is organized and presented on the online banking site.

Event-triggered campaign management tools suggest on-the-spot loyalty rewards to consumers as incentives tied to certain online behaviors like paying bills or using bank-issued credit cards. Additionally, you can supply interactive calculators and widgets that serve as virtual financial mentors to help consumers save and invest and guide them through major financial decisions.

Members of Generation Y, like most consumers who bank online, want their online bank to do more than recognize and serve their basic needs. Increasingly, consumers expect their bank to engage, educate and relate to them as individuals, not just as generic customers. For financial institutions, realizing the promise of next-generation online banking requires gaining a greater understanding of their customers. Then they must apply that deep insight to delivering online financial services that anticipate and satisfy customers' personalized needs. Organizations that do all of these things well stand the best chance of surviving and even thriving through today's challenging economic times.

Originally published in CRM Buyer 2/20/2009

Tuesday, February 17, 2009

Is Turmoil is Boosting E-Banking Usage?

Fiserv Inc. recently conducted a survey and found that economic turbulence is driving more consumers to bank online.

Seventy-one percent of respondents said they were watching their finances more closely than a year ago. Of those, 75% said they use online banking; 28% said they were using it more often than a year before; 44% said they were using it the same; and 3% said they were using it less. Use of other channels, such as automated teller machines, call centers, and branches, declined and use of mobile banking was essentially unchanged.

Sixty-three percent of survey respondents said banking online gives them a greater sense of control over their finances.

The October survey of 1,009 online U.S. adults was conducted by Forrester Research Inc. of Cambridge, Mass.

Todd Lesher, the president of the electronic banking services unit at Fiserv, of Brookfield, Wis., said in a press release Thursday, "This survey indicates that online banking is still a great opportunity for financial institutions looking to strengthen their ties with consumers." From American Banker article.

Wednesday, November 19, 2008

Any Big Vendor Announcements from BAI Retail Delivery


It is that time of year again, when us vendors and bankers pack it up to head to the annual BAI Retail Delivery Conference and Expo. This year marks the 30th anniversary of the conference and is the time when exhibitors are unveilling new banking innovations, technologies and groundbreaking strategic insights. Let's take a look into a select few vendors to see what announcements are out there this week and the buzz:

Fiserv - Nice mix of acheivements, customer wins and new product announcements, high buzz.
Metavante - Just one partner announcement, no buzz.

NCR - Four announcements and demo on MSFT surface, good buzz.

Yodlee - One announcement on something they have probably been doing for a while, no buzz.

Cash Edge - One cool re-announcement of me-to-me payments, high buzz.
S1 - Busy marketing department and winner for most with five announcements, good buzz.

Digital Insight - Nothing, nada to announce...

We'll keep updating as things draw to a close and they turn off the lights in Orlando.

Nothin' Depressin' 'Bout Paper Supressin'

eBills have always been a big part of the CheckFree bill payment and presentment solution. Heck, we even have our own site dedicated to eBills @ eBill Place.

If you are a consumer, the benefits of receiving and paying bills online are pretty clear from convenience, control, organization - and its enviornmentally friendly - it is amazing to think about the solid waste that is produced for a bill that you are ultimately going to throw away and carbon footprint it took to create - get that bill to you. You can calculate your green savings here or simply have a look at the diagram below. So if you aren't getting your bills electronically what are you waiting on?


For those of you that are already using eBills, I wouldn't go as far as to say that you are a Real American Hero but maybe an "unsung hero" or maybe even a "real man of genius"... and for that we salute you Mr. Online Bill Pay Payer (listen below)... because there ain't nothin' depressin' 'bout paper supressin'.

eBills of Genius - The eBill Advancement Team

Tuesday, November 4, 2008

Q&A with Fiserv Mobile Money PM

Calvin Grimes, product manager for Fiserv Mobile Money, sits down with Michelle Robart, contributing editor for TMCnet, to explain the benefits of mobile banking and what he predicts in the future for this exciting industry.

TMCnet: For anyone who is not familiar with Fiserv, can you provide a brief overview of what the company offers, and who its customers are?


CG: Fiserv is one of the world's largest providers of information technology services to the financial and insurance industries. Leading services include transaction process, outsourcing, electronic bill payment and presentment, investment management solutions, business process outsourcing, software and system solutions. Fiserv reported nearly $4 billion in annual revenue from continuing operations for 2007, processed 18 billion transactions and provides technology solutions, including core and online banking systems, for top 100 U.S. banks, credit unions and community banks.


TMCnet: What is Fiserv Mobile Money and who can benefit the most from using this service?


CG: Fiserv Mobile Money is the industry's only all-in-one, triple-play mobile banking and payments solution providing universal reach by serving any device via any access mode on any carrier network. The solution provides financial institutions with the flexibility and scalability to deploy different access modes such as text (SMS), browser (WAP) and mobile application to meet the evolving needs of their customers. Fiserv Mobile Money also integrates seamlessly with existing banking systems and security infrastructures, including those offered by Fiserv. With one technology deployment, financial institutions can maximize their mobile return on investment and consumer adoption, while providing their customers with a user experience tailored for their unique mobile device and mobile banking preferences. Powered by proven technology from Mobile Commerce, Fiserv Mobile Money is available today via an in-house software solution; a hosted version of Fiserv Mobile Money will be offered in 2009.


TMCnet: What are some of the main benefits of Fiserv Mobile Money for businesses and professionals?


CG: Fiserv Mobile Money provides consumers with an enhanced mobile banking and payment experience for all mobile devices, such as the Google Android-powered G1 and the Apple iPhone, as well as a broad range of phones from other leading manufacturers such as Nokia, Motorola and Samsung. The Fiserv solution also enables consumers to choose the most convenient access mode - browser, text, or downloadable application - to meet their mobile banking needs, including checking account balances, receiving alerts, transferring funds and paying bills.


TMCnet: With the rising consumer demand for mobile banking services, what do you think is the main driving force behind mobile banking popularity?


CG: Certainly, a major factor is that mobile devices and the carrier networks have evolved to the point where they can support mobile banking services. More importantly, consumers are using these services in greater numbers, and many more are interested and ready to adopt in mobile banking services. In Fiserv's latest mobile survey, 23 percent of consumers said they use their mobile device to conduct mobile financial services, up from essentially zero in 2006. The survey also showed that 75 percent of consumers are interested in using mobile banking services, up from 49 percent in 2006. Among Generation Y consumers, that figure is even higher - 83 percent express an interest in and willingness to using mobile financial services.


TMCnet: What are some of the creative, real-world ways customers are using mobile banking in their daily lives?


CG: Today's increasingly mobile consumers are frequently away from their Internet-connected desktop or laptop computers that they would generally use to access online banking and bill payment services. However, consumers are rarely very far away from their mobile devices, giving them continual connectivity and unprecedented access to mobile banking services. During this economic downturn, mobile banking is providing consumers with a very powerful tool to help make more informed choices about how they manage and spend their money. So now they can use any mobile device, anywhere, anytime to check account balances to determine whether to make a purchase. In the course of a day, they can receive alerts that will empower them to transfer funds to avoid an overdraft and pay an overdue bill to avoid a service shutoff. This gives consumers tremendous flexibility and empowerment to manage their finances more effectively than they ever have before.


TMCnet: What are some of the trends shaping the mobile banking industry in the U.S.?


CG: Financial institutions generally will choose one of two paths - either pursuing a relatively defensive strategy whereby they are looking to provide straightforward, check-the-box mobile banking functionality - or taking a broader, forward-looking mobile commerce strategy aimed at providing mobile banking services today, while setting the stage for opportunities to generate revenue from the mobile channel and near-field communications, contactless point-of-sale transactions and micro-payments.


TMCnet: Looking ahead, what predictions do you have about companies continuing to utilize the benefits of mobile banking technology?


CG: In the near term, we see financial institutions seeing the value of providing customers with multiple ways to access mobile banking via WAP, SMS and downloadable applications. We also anticipate continued growth of near-field communications to help us realize the full promise of mobile commerce. You'll see companies across the industry spectrum using mobile phone numbers rather than email addresses to interact with their customers for peer-to-peer communications, and you'll also see retailers using NFC for loyalty, contactless card programs.


TMCnet: How can mobile banking help companies improve their bottom line and survive economic hardships?


CG: Mobile banking can help financial institutions reduce costs, improve their bottom line, boost customer retention and generate revenue from the mobile channel. That's especially important during this economic downturn. For example, ANZ National in New Zealand and Australia has been able to monetize the mobile channel using the M-Com-powered solution, by charging their customers for bill pay transactions and mobile text alerts. The bank is also driving down annual cost-to-serve expenses by $20-30 per customer by "right-channeling" customers from more costly offline channels such as the call center to the lower-cost mobile channel. At the same time, they're lowering churn rates to 5 percent for frequent mobile users versus 10-15 percent on average.


To read more of Michelle's articles, please visit her columnist page. Read the full article.

Monday, October 27, 2008

Finovate 2008 | Credit Karma

Presenter: Kenneth Lin, CEO

Notes from the Presentation: Polled if the audience thought credit scores are important. Majority indicated yes. Used this to transition to overview of the product. The product has three value prop – free credit scores within seconds, educational tools to track and better your score, and they provide incentives and financial services offers. New product just launched this weekend – Credit Simulator (see below) – how doing certain things will affect your individual credit score. They simulated what applying for a new credit card would be. The next example – what would be the effect if they paid which card late. Common theme is that it is very pro consumer service.


Show Note: Credit Karma was selected as one of the Best of Show for Finovate 2008.

Finovate 2008 | SmartHippo

Presenter: George Favvas, Cofounder and CEO

Notes from the Presentation: George wanted to use SmartHippo to address the current financial problem – and thinks that if we didn’t solve the core problem we will waste $770 billion dollars. He commented on the fact that there are too many intermediaries with lending. Smart Hippo is a community of consumers helping each other with the collective power to change the way the industry works. First vertical is mortgage and they have consumer reviews. Provide the ability to rank thinks from customer service to disclosures. They also have a rate version – new version which will launch this month was demonstrated. First site of this type that combines data – feed by lenders, proprietary bot and other users who are feeding their own information. Two key innovations – no charge to feed data and the best ones bubble to the top.