Potential: Revealed

Strategic Thinking, Innovative Ideas, Growth Marketing, and Revealing of Potential

Archive for online banking

From Insight To Action In Under A Minute

One of the toughest challenges most businesses, including and perhaps especially the many small financial institutions in the U.S., face is having all three key ingredients for being a successful marketer:

1. strategy and plans to use data to target their customers with relevant offers (to get from talking about it to doing it)

2. technology to create the targeting analytics and deliver the offers (to be able to make sense of the data and take action)

3. investment in skills and resources to sustain marketing efforts (direct marketing is largely a numbers game – you have to get beyond the one-time and piecemeal marketing that is highly ineffective)

I’ve certainly seen this with clients of mine and in listening to the experts in the area of direct and digital marketing, and data analytics.

At FinovateFall 2012 this week there continues to be an emerging set of companies that are providing ways for financial institutions to breakout – particularly with the first two ingredients. But I believe there is just one company, Segmint, that is also tackling #3 – by taking the required skills and resources and putting them into a box – or more accurately behind OneButton. Making it ultra easy to take action on what the data is telling you and reach the right customer at the right time with the right offer, in real-time wherever a customer might be: online, mobile or social.

So easy that targeted FI marketing campaign can be selected and launched in less than a minute.

All the work is done for the marketer, as long as they have #1, #2 and especially #3 are taken care of automatically by Segmint’s platform and solution.

See the post on Finovate’s blog from the Fall 2012 conference this week. I’ll also update you with a post in a week or so with the video Finovate will make available of the presentation by Rob and Nate.

Let me know what you think too!




Mobile Banking Future Has Not Arrived …. Yet

 Interesting study out of the  U.K. on Mobile banking adoption and usage. A few snippets:

– Smartphone users registered at just 17.5 percent in terms of those who paid bills with their devices

– yet half of all desktop users said they paid bills

– 45 percent of those surveyed had heard of a mobile wallet

– less than half of those (about 20%) expressed interest in having one

If as conventionally believed Europe and Asia lead the U.S. in adoption and use of mobile for financial services and payments, then should we expect even weaker numbers if this survey was done in the U.S.? The future has not arrived … yet, at least in terms of higher levels of adoption and higher value usage for mobile in the area of financial services and payments. Until there is significant growth in usage beyond merely checking account balances and finding a nearby ATM, the potential of mobile will continue to be hampered by lack of consumer interest or weak consumer experience and functionality, or both. . .  How and when will this change?

Electronic Bill Pay, After All These Years

Recently I did some work for a client who asked “tell me about the market for bill payment services in the United States?” I was in this business for a number of years as an executive for the market’s largest provider of such services but had not looked at the market at a broad level since 2008. I thought it was interesting to see how things have unfolded and thought I would share with everyone.

First of all, even though electronic bill payment is relatively mature I talk to a lot of people who are quite knowledgeable about financial services, payments and technology who don’t really understand the bill payment ecosystem nor the differences between the two main models. Below is the fastest growing model and soon to be the largest in terms of adoption and usage, referred to as Consolidated Bill Payment. Named such because it is a service that consolidates a customers’ bills and payments at a single point – most often through their bank.

(click to enlarge)

The second model which is popular and growing quickly but not as fast is known as Biller Direct – it is projected to be surpassed by Consolidated in terms of usage volume in the next few years. Biller Direct as the name implies is where a consumer pays their bill directly to their biller (for example, logging into your cable provider’s website and paying your monthly bill).

Biller Direct Ecosystem (click to enlarge)

I’ve also included here a snapshot of the size of this market overall. It has grown well since 2009 and projected to continue at overall a double digit pace for key electronic methods – ACH debit at 12% (for example, when you have your mortgage automatically deducted each month from you checking account), Online Biller Direct at 13% and Consolidated at 18.5%.

Bill Pay Market Size Projected (click to enlarge)

Behind these number though is a natural slowing of this growth rate. The rates quoted just before are the compounded average rate over 5 years from 2009 to 2014 but the rate of growth from any year to the next year is decelerating. It is one of the key challenges to providers in this market – how to deal with a rapidly decelerating growth rate without resorting to price and volume as your only competitive weapons for revenue growth. As evidence, the anticipated revenue growth rate for providers selling the Consolidated model is just 8% per year from 2009 to 2014 (and as with volume growth rates, is decelerating toward zero as 2014 approaches and we get beyond it).

Recent Commentary: E-Banking

For a client recently I published some commentary on recent news in the financial services technology (Fintech) market.  Just sharing the publicly available portions here for your interest – and of course comments!

Here’s the first one …

Online Banking Increases Lead While Mobile Banking Continues to Lag

Online Banking (OLB) is far ahead now — 55% v. 28% for branch v. 2% for mobile — as the most satisfying channel for retail banking consumers according to May 2011 study from Foresee. Cautiously good news for leading providers like Fiserv (FISV), Intuit (INTU), Jack Henry (JKHY).

OLB’s main competition (or complement) is the branch. Together they make up nearly 75% of the channel preference for retail consumers. Financial services (FI) firms should continue to see these channels as complementary, driving as much customer interaction as possible to electronic channels but integrating the experience with the branch and other personal touch points rather than trying to fully replace them.

Mobile continues to lag because it is often erroneously sought as an OLB or branch channel replacement (to further drive out service costs and serve younger demographic segments). Since it is not a replacement at all, it falls naturally short of retail banking customer expectations and needs, and in turn harms its value proposition.

Mobile is more likely a successor (or complement) to the ATM and call center – and at best a complement to the online channel. Until some day far in the future, if a killer mobile device form factor emerges, mobile banking is likely to be over-hyped and under-performing. The aforementioned FinTech firms plus others such as ClairMail, FireThorn (Qualcomm (NASDAQ:QCOM)), mFoundry, the telcos are heavily invested in mobile banking technologies and apps — and their strategies need to be well crafted or they’ll continue to miss the mark and expectations.

This will mean for foreseeable future mobile banking will at best grow to 15% penetration as the “preferred” retail banking channel. A better strategy is a focused and integrated set of functionality centered around payments and customer service.

An online bank — as a stand alone or as the flag ship of retail strategy for a brick and mortar FI — done right has a significant and receptive market awaiting it. . .