Bank of America Testing New Deals Service
We’ve seen them do this before without success, but maybe the second time around will be a charm… Reuters reports: “Bank of America is wading into the fast-growing business of offering consumers targeted online discounts. [BoA] will start testing a new service [named BankAmeriDeals] that will allow customers to rack up savings from retailers based on their previous spending patterns. Customers will receive offers through the bank’s online banking website. The discounts will be awarded in the form of cash payments once a month. Customers need not sign up for emailed coupons or check a separate web site, as bargain hunters do with offerings from Groupon Inc. and others.”

The Race for the Second Screen: Five Apps That Are Shaping Social TV
“Co-viewing. Back channeling. Checking in. Double- or triple-screening. Layered content. The increasing symbiosis between good old traditional TV and the social world will be one of the most interesting media trends to watch this year. In this three-part series, Co.Create looks at the world of social TV from a few different angles. First up: the apps.”

Facebook’s Biggest Weakness: Mobile
The SAI Business Insider published an interesting piece by Matt Rosoff about Facebook’s mobile weaknesses along with some other interesting ‘risk factors’ found as the company filed for IPO. “First, Facebook‘s mobile apps are not making any money — Facebook doesn’t show any ads to mobile users. Facebook has to figure out how to show ads fast. Otherwise, as more users turn to Facebook on mobile devices, and away from Facebook on their computers, that could hurt ad revenues. Second, Facebook has no control over the platforms on which its mobile products are used. If Apple or Google limit or block what Facebook can do on their mobile platforms, that could also hurt. It’s doubtful that mobile platform makers will ban Facebook entirely — it’s too popular. But they will certainly exercise control. For instance, last year Facebook introduced a version of its Credits payment platform for mobile developers of Facebook apps. But Apple won’t let developers use Credits on iPhone or iPad apps — they have to route payments through Apple’s App Store instead, giving Apple (rather than Facebook) the 30% cut of each transaction.”

5 Signs of a Great User Experience
It’s safe to say that the quest for the best User Experience can seem never ending. Here’s a great article from ReadWriteWeb that might help lead you further in the right direction. “If you’ve used the mobile social network Path recently, it’s likely that you enjoyed the experience. Path has a sophisticated design, yet it’s easy to use. It sports an attractive red color scheme and the navigation is smooth as silk. It’s a social app and finding friends is easy thanks to Path’s suggestions and its connection to Facebook. In short, Path has a great user experience. That isn’t the deciding factor on whether a tech product takes off. Ultimately it comes down to how many people use it and that’s particularly important for a social app like Path. Indeed it’s where Path may yet fail, but the point is they have given themselves a chance by creating a great user experience. In this post, we outline 5 signs that the tech product or app you’re using has a great UX – and therefore has a shot at being the Next Big Thing.”

 11 Deadly Social Media Sins for Brands
“Most brands are trying really hard to succeed with their social media initiatives. They are trying new ways to engage – from receipts at checkout to advertisements in newspapers; brands are trying their best to connect with consumers on social networks. In the pursuit of trying to get things done, some “top” brands have made mistakes. Here are some things to avoid, with no exceptions – things that I hope are rarely repeated.”

Until next week- TGIF!

Certain companies (Amazon, Apple, Simple) have raised the bar when it comes to offering customers a seamless online journey. Technology has also advanced significantly in the last year and now facilitates a profusion of consumer-oriented applications. All of this leads us to predict the top four trends for this year will be: Self-directed customers, better User Experience (UX), mobile banking, and more personal and relevant banking interactions.

Accenture has been tracking customer behavior for several years and was already seeing the beginning of a behavioral shift due to social networks and computer and cell phone usage back in 2009. In its most recent survey on global customer behavior it saw a distinct increase in customers seeking direct self-service, more personal interactions, and more discounts online. All of this fits with our expected trends for 2012.

In order to offer this kind of service we expect banks will improve UX and incorporate microsites as a way to interact on a more personal level with customers while also making their interface compatible for mobile banking initiatives, which is another of our expected trends. Higher demand for mobile applications will inform the UX of banking sites like never before. Simplicity will reign. Further, making applications more personally relevant will mean more segmentation and customization by the banks.

Watch the webinar for more on our trend predictions as well as the great questions from participants (along with our answers).

Banner image courtesy of virtuemarttemplates.org

In the latest edition of This Week in Engagement Banking comes a spot-on look at the legacy problem within large financials via a recent piece by David Bannister in Banking Technology. We especially identified with this statement: “…they [big banks] are also strong believers in the old maxim, ‘if it ain’t broke, don’t fix it’. The result is that most organizations have a raft of systems held together by sealing wax and string.”

Other highlights this week include our advisor, Bank 2.0 and Movenbank founder, Brett King’s launch of his latest book on the death of branch banking, as well as, a lively post about how some banks are dealing with Twitter feedback – hint, hint – not so successfully.

Big Banks Struggle to Help Customers on Twitter
The ‘Bucks Blog’ from the New York Times recently reported that Twitter is proving to be a vexing customer service tool for big banks. According to a new report from Javelin Strategy & Research on banks’ use of social media, customers seem to like the speed and directness of sending a question or complaint to their bank by Twitter, but banks must weigh the implications of responding quickly with the need to protect a customer’s personal and financial information, like bank account numbers. As a result, they’re ‘struggling’ with how to best use the service, Javelin found.

Managing Complexity, Living With Legacy Systems
Banking Technology’s David Bannister discusses the issue of legacy systems within financial organizations. “A combination of new technologies, systematic methodologies and sheer necessity is driving firms to finally address their legacy issues. For as long as anyone can remember, the financial technology world has had to get to grips with the problems caused by the plethora of legacy systems in use in most organizations. Banks have always been heavy users of technology, but they are also strong believers in the old maxim, ‘if it ain’t broke, don’t fix it’. The result is that most organizations have a raft of systems held together by sealing wax and string,” he writes.

Want Popcorn at the Movies? Try QkR, MasterCard’s New Mobile App
Demo of QkR by MasterCard, the latest smart phone payment pilot app developed in conjunction with Hoyts and Commonwealth Bank.

Which Will Make a Bigger Splash in 2012, Mobile Wallet or EMV?
During the latter half of the past decade, a heated battle has been fought around the world to determine which payment method will take center stage in the coming years. According to a Bank Innovation blog entry by Robert Siciliano, an identity theft expert, many believe mobile payment will leapfrog what is known as EMV, which stands for Euro MC/Visa, or chip and PIN credit card technology, and that soon enough chip and PIN technology will go the way of the magnetic striped credit card.

As he argues, certainly, there are many major companies that have wagered heavily on the presumed success of their chosen technology, and these companies have a vested interest in the failure of their rivals. He thinks there is more than enough room for both Mobile Wallet and EMV.

Branch Today, Gone Tomorrow: The Case for the Death of Branch Banking
Backbase advisor Brett King’s new book has just been released.  In it he once again touches on the lag between what is currently  possible in a Bank 2.0 world and what still holds banks back. Specifically, the new book discusses how, in the wake of the global financial crisis, retail bankers face another equally challenging shift to their business in the near term – the demise of the branch. For example, in the UK, one branch has closed everyday since 1990. In the US, transaction volume in-branch will be down almost 60% from 2006-2015. In developed economies, consumer visits bank branches have been down 80-90%. Yet today most banks spend more than 80% of their channels budget on branch real estate, staffing and support.

With that we bid you adieu for this week!

Image provided by chaitanya via www.deviantart.com

The biggest problem:

Some banks tackle social media by treating it as just another way to distribute marketing messages. Instead, banks should begin by defining their business objectives, listening to the social conversations occurring online and creating a targeted plan to meet customer needs. By monitoring social media, you don’t have to guess what your customer wants. You can be part of the conversation as they discuss their financial goals.

Amen! This was taken from a recent article in BAI Banking Strategies. It’s identical to the kind of message we’ve been trying to get across to financials ourselves as a company whose prime objective is helping banks to connect with their customers.

So, you say, the past is the past. True. How can financials use the tools available to gain this critical outside-in thinking now? Well, according to BAI Banking Strategies they can use it to focus on:

• Customer acquisition: Engaging brand advocates to acquire new customers and increase loan portfolios.
• Community engagement: Building strong customer relationships through participation in local events and promotions.
• Customer service: Providing prompt, personal attention for questions or complaints.

This last bit, refers to customer service, which is a key area that has, and does, actually impact the bottom line. Banks can use software to monitor customer responses and in effect, manage to kill two birds with one stone by responding better to customer’s needs and gaining important knowledge about who its customers are as well as what they want. This, in turn, makes it easier to sell products and services that customers will actually buy.

In short, if financials make the leap and decide to use the social media tools at their disposal, they will reap the rewards of improving the bottom line and gaining consumer insight all while helping improve customer engagement which, in the end, is what it’s all about. Right?

Banks Start Playing Games with Your Money
Financials (Visa, CapitalOne, Chase) are embracing gaming as a way to attract and keep customers engaged according to a recent article by Reuters journalist Linda Stern.  Game-like scenarios such as contests, prizes, scorecards, badges, friendly competitions and so forth, are perhaps obviously being used to attract a younger demographic, but also and more interestingly, can even result in encouraging lower-income people to save more money (so says the article).

How to Create a Banking Strategy
On his own blog, ‘The Financial Services Club’, Chris Skinner discusses how to avoid the faddish management philosophies of the times when coming up with a banking strategy. He has devised an acronym PEST – Political, Economic, Social and Technology, which encompasses the forces he believes will most impact change for Financials in the near future.

Digital Banking Tipping Point Set for 2015, and Customers will Pay for It
PricewaterhouseCoopers’ (PWC) recent survey and research, highlighted on the Finextra news site projects that in three years time more people will interact with their banks digitally than through branches, and they’ll be prepared to pay for the privilege.

How Many Jobs will Digital Kill Off in Banking?
This question is posed by Bank 2.0 guru, writer and entrepreneur Brett King this week. The ultra juicy post begins: While I won’t name any names or budgets, I’ve heard of mid-sized banks dedicating more than $50 million to Internet, mobile and social-media this year, and large banks in the range of many hundreds of millions. This begs the question – where’s the money going? Keep reading . . .

Bank of America Banging it in Banking
Finally, we end with a positive blog note about BoA. Yes, I wrote positive. Hard to believe maybe, but JJ Hornblass over at Bank Innovation lends some insight to BoA’s latest earnings report in which it disclosed mobile usage growth. BofA said that its mobile banking customers grew 45% in 2011 to 9.2 million by the end of the fourth quarter. It also says it has about 29 million active users of its online banking platform today and there’s more!

Image source: HDW (High Definition Wallpapers)

It was an interesting week in Engagment Banking news. As everyone warmed up to 2012, topics were broached ranging from Health-Wealth portals to the use of social networks to evaluate potential customers for financial services.

12 Big Ideas for 2012
We begin with an insightful cover story by American Banker. We were particularly struck by the number one prediction that health care (under Obama’s Patient Protection and Affordable Care Act 2010) represents a big opportunity for banks. How?  “Besides serving as the payments vehicle for doctors, hospitals and health care plan administrators, banks could become central to a kind of ‘health-wealth’ portal that many believe will be a major source of the $35 billion in health care savings that the White House projects the act will provide by 2013.”

Number eight on the list also begged to be highlighted. In the context of Engagement Banking, the rise of Psycho (graphics) is going to be a real game changer. What are psychographics? “[It’s] really taking all that data and paper trail you leave behind and painting a picture of who you are.” These details, of course, can be used in myriad ways by a bank to make a connection with the customer.

Web Browser, the Most Popular Online Banking Channel
At Bank Systems & Technology a reality check, in the form of a report by the Javelin Group, was given to those who are touting all the new, potential, benefits of technologies related to mobile banking. The report reinforces that, despite the efforts being given by many technology companies to bring customers around to mobile banking applications, the majority still use a web browser.

Movenbank Believes in You, Not Just Your Money
In what is the most fascinating and forward-looking post of the week, Brett King lays out how Movenbank is  utilizing social networks to evaluate the worthiness of customers. [King recently joined the Backbase Board as an advisor].

New Online Banking Report Published: Online and Mobile Forecast through 2021
Again, speaking about online and mobile banking, NetBanker posted a report from Financial Innovations that shows online banking is remaining relatively flat while mobile banking expanded more than 40% in the US last year. It also gives predictions for the future of online and mobile banking as well as about P2P lending along with the top ten innovations of the year.

Gartner Predicts Rise of External Social and Cloud-based Banking Services
This week Gartner’s annual predictions for trends in several industries including financial services made the rounds on fintech sites. Among the more interesting comments in the report, Gartner contends that financial institutions will continue to be challenged by emerging technologies particularly by new external social web or cloud-based services such as Twitpay or Facebook credits virtual currency.

What’s Coming in 2012: Making Hay Out of All Those Deposits
Finally, JJ Hornblass at the Bank Innovation blog discusses the potential of a financial bright side for 2012. Banks need to do something with the $10 trillion of assets they accumulated through the third quarter of 2011. He comes up with a couple of hopeful scenarios in the post.

And with that we wish you an uneventful Friday the 13th!

Welcome back from the holidays! Today we inaugurate Backbase’s, This Week in Engagement Banking; a list of the most interesting, amusing or curious stories, blog posts and reports for Fintech professionals, put into a nicely digestible package at the end of every week.

KPMG’s 5th Annual Global Consumer & Convergence Survey Confirms Trend of Accelerated Pace of Consumer Adoption of New Digital Business Models
We begin with a recent report out from KPMG in which the firm found that 56 percent of consumers said they trusted their financial services institution most to handle their mobile commerce financial data. Only 7 percent trusted retailers and 6 percent said they trusted their mobile/Internet service providers. This doesn’t mean, necessarily that consumers aren’t interested in offerings from Google or Square, but seems to infer that they are still wary of new, mobile technologies when it comes to financial transactions.

Google Android Market Tops 400,000
Meanwhile, over at the Distimo Blog they are reporting on Google Android’s 400,000 applications milestone. ‘Android is making enormous gains in terms of app volume as Google’s platform proliferates around the world.  It’s hard to make a direct comparison based on volume alone, as Apple reviews every app while Google does not. But if its pace keeps up, Market could easily be nipping at the App Store’s heels this year.’ The reasons why Android is making these gains is for another blog post, but it is meaningful information for Engagement Banking developers who most certainly are keeping score.

9 Trends Reshaping Risk Software
American Banker’s Penny Crosman posted an article on trends in risk software and in so doing pointed out some very relevant issues affecting the budgets and concerns of financials in 2012.  “Firms continue to want to chop down the silos and provide more information across disciplines,” says Michael Versace, research director of IDC.

What Will 2012 Bring for the Banking Industry?
The Discerning Technologist, Bradley Leimer, asked what readers thought 2012 would bring to the banking world on banking.com resulting in some thoughtful answers like this from a Financial Consultant & Social Banker (Independent) for J.D. Power & Associates, “Clearly Gen X and Gen Y customers comprise the majority of those subscribing to and using social media, but the number of Pre-Boomers and Boomers who do so as well is growing at a considerable rate . . . Banks should be prepared to interact with and satisfy the growing Pre-Boomer and Boomer customers too!”

Some Countries are More Social than Others
And we leave you with this little tidbit from the New York Times: “In the big cities of India and China, it seems, people can’t help being social. Nearly everyone who uses the Internet there is also active on social networks, according to a vast global survey by Forrester Research, and most of them do much more than read and watch what’s posted online. Three out of four of them write blog posts or upload pictures and music.”

Till next week……

A main takeaway from the seminar was a better understanding of the level of commitment banks have to actually implement a digital strategy as well as some of the obstacles they face in fully achieving one. Rabobank, a Dutch bank with distant roots in the agricultural industry in the Netherlands, presented a look at how it is dealing with the phase-out of its legacy branches. There’s been much discussion in Fintech about how a ‘branch mentality’ has continued to suck the life out of some engagement banking initiatives. However, for most banks, the question of ‘how and when’ to get rid of branches is fairly difficult to answer. Unlike startups, which don’t have older, luddite customers to serve, most banks can’t afford to pursue a purely digital course at this point in time.

Rabobank’s Gerrit Scheers discussed, in detail, how the bank has implemented its virtual kantoor (office) strategy. The parameters for implementing this new approach, for example, included the necessity to take into account the needs of its more rural and older customers. Even in these ‘virtual’ times, there are many customers who are attached to branch banking, for instance, because they still don’t use the Internet or don’t have Internet access at home.

Rabo’s answer to this has been to phase out many branches and to replace most of their services with ‘live’ agents on their website. This has had the advantage of cutting real estate costs and also with allowing sales of products to happen all day long. Before, conditions such as bad weather, would limit the sales and other transactions a bank could do while they still had to pay for overhead. Now, poor weather conditions actually result in more sales because people can access services anytime. To continue to serve other customers and for times when it is necessary to go to a branch, Rabo has revamped its branches with touch screens that are connected to the same live agents you can find online. The personnel costs, therefore, are reduced while access to help and a ‘real’ presence is maintained. Educating customers on how to use these new services is one of Rabo’s main objectives.

Overall, this seems like a sane strategy for easing customers into a new way of banking. It’s still a far cry from the kind of engaged banking we envision, but it’s a start.

The banks so far are going with a close telecom competitor of Wallet called Isis. The potential reason? Well, it’s something that we’ve been talking about for a while here at Backbase. Banks are at a crossroads. If they don’t do something to hold onto the crucial, customer relationship, then their future viability comes into question. Everything hinges on this relationship and the suitors for customers have never been greater with other players having moved in like: Bank Simple, Movenbank, Paypal, etc.

The banks could just be betting that the carrier relationship will continue to be the most important one in the future of anything mobile-related – or they could be intentionally trying to keep a distance from Google, (or both). The only problem with these scenarios is that Google and upstarts like it have continually proven that it’s the customer who will make the choice in the end. It would be wise for banks to keep this in mind since, sooner or later, the only way to keep the customer happy is to give them what they want. It would probably be wiser, then, to focus on improving their overall banking systems so that they are ready to provide those services when the customer makes their choice.

A widget is a (mini,) independent Web application that is aggregated in a portal page, and can be personalized by the website user, whether e-business or end customer. Widgets become the building blocks of the portal providing the functionality and the content to make it useful and engaging.

Aside from their content possibilities and functionality, widgets can also have their own title bar, action buttons, initialization and end-user preferences and perspectives. These are portal-specific functions that enhance a user’s ability to personalize a widget. This unprecedented level of personalization is what gives widgets their power and why they are currently transforming the Web.

Semantically, widgets are similar to portlets in the sense that they are the building blocks of the portal. However, widgets provide an evolutionary way to truly enable cross-channel, cross-device enterprise strategies.

Widgets are based on open standards and they remove technological limitations, acting as a foundation component in a new, more flexible and open generation of portals. In the context of the Backbase Bank 2.0 Portal, widgets are simply Web applications built with any server technology and client library you prefer, which allow you to implement highly-interactive user relationships and leverage mainstream technologies and the existing skill-set of your team. Moreover, widgets composed of various technologies can coexist within the same portal page. This allows for unprecedented freedom in business decisions since there is no technology locking you in and at the same time no compromise on enterprise-level characteristics such as performance, security and maintainability.

If your development team knows how to build a Web application, they know how to implement a widget, and if your architect team knows how to design and implement enterprise-level Web solutions, they already have all the basics required to design and implement a portal based on Web Oriented Architecture (WOA) and built on widgets like those used in the Backbase Bank 2.0 Portal.