Archives for October 2012

2.27.13: 2013 Innovation & Insight Day, featuring Celent’s Sixth Annual Model Bank Awards

Celent senior analysts, Banking Group This event is free for Celent clients and the media. Non-clients can attend for a fee of USD $495. Space is limited, so pre-registration is required. Please click here for more information.

12.4.12: Celent Banking Webinar: Launching a Merchant-Funded Rewards Program: Why and How

Zilvinas Bareisis, Senior Analyst, Celent’s Banking Group This event is free to attend for Celent clients, flex-plan clients, and the media. Non-clients can attend for a fee of US$195. If you are unsure of your client status, please contact Steve Nawrocki at +1.617.262.3128 or Please click here for more information.

12.13.12: Celent Banking Webinar: State of Consumer Capture 2012: The Death of Desktop

Bob Meara, Senior Analyst, Celent’s Banking Group This event is free to attend for Celent clients, flex-plan clients, and the media. Non-clients can attend for a fee of US$195. If you are unsure of your client status, please contact Steve Nawrocki at +1.617.262.3128 or Please click here for more information.

Why I Support Reg E

Reg E required that banks separately and explicitly get customer permission for debit card and ATM overdrafts. This reduced the profitability of retail checking accounts by reducing NSF income to banks, making many checking accounts unprofitable. I discussed this in the Celent report, Reg, Reg Go Away: Sorry Banks, They’re Here to Stay, April 2010  I am in favor of Reg E, and actually believe it is good for the banking industry in the long run, even though as Maynard Keynes stated, “In the long run, we’re all dead.” I think transparency is a good thing for the long-term relationship between a bank and its customers. Clients who now opt in to overdraft know they did it, and are likely to pay the fees without rancor. Reg E isn’t new. Why discuss this now? I recently stayed at an Embassy Suites and saw the following message on my water bottle:

It’s In Your Hands.

Please Recycle.

Be Green.

reg-e-2 You’d think that Embassy Suites was into preserving the environment and encouraging recycling, but unlike many hotel rooms I stay in, there were no recycle bins in the room. So why the strong messaging?
Please Recycle

Please Recycle

If you look in the upper right hand corner of the label, in low contrast knock out type, you can see $4.95*. And if you attempt to read the fine print at the bottom of that label, you see (or don’t stand a chance of seeing) that if you drink this water $4.95 will be added to your room charge. While the recycling of the bottle might have been in my hands, I want to give Embassy Suites just a finger. This is exactly what banks are doing when they bury overdraft protection language in paragraph 23 of an account agreement and surprise their clients with a $33 overdraft charge. What do you create? Angry and disloyal customers. Is that any way to run a hotel? Is that any way to run a bank?

3 down, 1 to go

With just (just?!) Sibos to go, I’ve now done three different conferences (Commercial Cards & Payments, BAI & AFP) and three very different cities (London, Washington & Miami Beach) in the last 3 weeks. But some similar themes that seem to have run across all three events. These are, in no particular order: Data Whether Big, customer centric or lack of, data was part of every conversation. Only the Commercial Card people thought they had it both sorted and a USP (until one panellist told them they hadn’t – me!), whilst the customers felt they had a distinct lack of data. My take-away and advice to the client has been data without purpose or context is just that – data. Understanding how the data is or could be used and improving that process is going to be where people can make a difference. 1073 Not only is there growing concern that the deadline will be impossible to meet (one can only assume that a fair proportion of the people who asked what were the penalties for failing to meet the deadline are unlikely to meet the deadline!), there is a growing belief that the rules could touch on some commercial transactions, and that the rules may be extended to cover commercial transactions under a certain value. Changing competitive boundaries Whether its vendors creating new payment networks, vendors merging or acquiring or existing networks being perceived to be muscling in on the business of its ecosystem partners, there is plenty of potential game changing action going on. I’d predicted some of this a few years ago – I keep my crystal ball ready for these special occasions 😉 – but even I hadn’t figured so much change, in such a short period of time. Regulation As a European, I managed to resist the urge to say “welcome to our world”. But even the US domestic people I spoke believe they’ve entered a new era. Opinions varied far and wide, but all agreed on two words – “more, soon”. Sibos is next week and some, if not all, of these themes are already occurring in my pre-briefings. What was interesting about these last 3 events, and so far holds true about Sibos, is that there have been no big announcements of note, and far fewer announcements overall. Some small, interesting ones, but considering the changes mentioned above, no major ones yet. Watch this space – after Sibos in Vienna in 2008, and what unfolded during that week, we certainly know anything is possible!

AFP Conference 2012, Miami Beach

I had the pleasure of attending the Association for Financial Professionals (AFP) Annual Conference in Miami Beach this week with several of my colleagues in the Celent banking team. The venue was well attended. I can say it was much more comfortable inside the convention center than being in the Miami hot and humid weather. This probably explains the large number of polo shirts and tieless casual dress shirts.

For those of you not familiar with the AFP Annual Conference, it’s a large event of about 6,000 treasury and finance professionals that meet for education and networking opportunities. A broad range of best practice topics are covered including payments, risk management, treasury operations, financial planning, and much more.

I spent much of my time at the event in constructive meetings with clients and prospects. Some of the hot topics I have encountered include cash forecasting, data analysis, risk management, mobile, paper-to-electronic, and treasury management systems. I did not feel that any topic reigned supreme but mobile does continue to increasingly take up the agenda items. The ‘newest’ topic which I think will continue to drive interest and top of mind for many, is the cloud.

The word that would best summarize many conversations across disciplines is “integration”. We are talking integration of data from mobile, integration of cash management banking portals, integration for data analytics, and integration of solutions and systems across the financial and peripheral systems within organizations.

The most exciting aspect for me was the level of innovation, investment, and excitement demonstrated by banks and vendors alike in our strategy meetings. There seems to be a sense of ‘seizing the opportunity’ from organizations across multiple topics. The folks I had a pleasure meeting with showed a genuine enthusiasm about their new services and solutions while the future is seen as being a glass half full instead of half empty.

Overall, I felt the conference was beneficial and met my expectations. However, I did hear from several attendees that this year seemed to have a lower attendance. Regarding the exhibitors, it appeared at par with previous years. I did observe several new exhibitors of smaller size but very innovative – this was very encouraging. The sessions also received mix reviews but mostly favorable.

Next week, I will be at SIBOS in Osaka, Japan.

NFC Payments: Still for Patient Payments Geeks Only

Recent launch of the iPhone 5 made me decide that it was time to upgrade my old iPhone 3GS. I knew I was going to stay with my current telco provider (Orange, or as they are now known, EE), so I just went into an Orange shop to discuss my options. To cut a long story short, instead of buying a new iPhone 5, I ended up getting Samsung Galaxy S3. Among the reasons for getting an S3 was the fact that it was one of a small but growing number of NFC handsets in the UK market and I knew that Barclaycard and Orange have just made their Quick Tap wallet available on the S3 and I was keen to try it. Here are some observations based on my first-hand experience: 1. Telcos could and should do a much better job at marketing the new services, such as NFC, and need to ensure that their front-line staff are properly trained. An example of my conversation with an Orange salesman: – Me: “This (S3) does have NFC, doesn’t it?” – Salesman: “NFC?? Oh, I am not too sure, let me check.” … – Me: “And how do I sign up to the Quick Tap wallet?” (followed by me explaining to him what a Quick Tap wallet is) – Salesman: “Oh, I think you probably have to call Barclaycard to get it set-up, I don’t really know.” As it happens, both Orange and Barclaycard websites had a description of the wallet, but I didn’t see any links or suggestions how to obtain it. Finally, I downloaded the app from Google’s PlayStore and followed the relatively straightforward steps in the app to register and link a card. Only when I got home I realised that my phone packaging box had a sticker on it saying “Hold your phone here to get started with Quick Tap”, but I didn’t notice it at the time and the salesman didn’t point it to me either. In other words, I knew what I wanted and was able to get it; someone less determined than me may not even realise their phone had these capabilities. 2. The experience of using NFC seemed to get better over time. Armed with my new mobile wallet, I set out to try paying with it (you see, unlike a “normal” customer, I actually think about payment!) I went to my local town (Bromley) and into the Boots store, as I knew it was one of the early adopters of contactless terminals. My suggestion that I was about to pay with my mobile phone was met with visible excitement from the cashier staff – there was no queue, so two of them came over to take a look, saying “How exciting! We’ve seen contactless cards, but not the mobile phone payments yet!” However, the first transaction was actually quite painful – I touched the phone against the terminal and nothing happened; I thought perhaps I needed to log-in to the app (the answer is, I don’t), so I did that, and the result was the same. Finally, after a few times of trying, there was a beep and much to our relief, the transaction went through. However, the second transaction was better (only took a few taps) and the third onwards have been absolutely smooth – literally, “tap and go”. I don’t think I was doing anything different and I even went back to the same merchant, so perhaps the phone needed “to go through the motions” to properly activate the NFC chip? Again, I am a patient geek and I want this to work, so I persevere; the question is, how many “normal” customers would have had the courage to try it again if their first transaction was anything like mine. 3. There are more merchants accepting contactless than we think, but they could do a better job telling us about it. I knew I would be able to pay contactless at Boots, Pret-a-Manger and a few other well publicised merchants. I was positively surprised that I could actually pay in a lot more places than that, including small independent merchants, such as my local independent CD store and my local fishmonger. The “where you can pay” feature inside the Quick Tap wallet showed that even a cafe at my Virgin Active gym was accepting contactless. More visible signs of contactless acceptance at the counters would be helpful though – some terminals are obviously different, but others look just like regular card terminals, so I couldn’t really tell if I could use my phone without asking about it. 4. Merchant cashier staff are crucial to shaping customer opinions and should become “the ambassadors” for new technology to succeed. When buying breakfast and coffee this morning at Pret-a-Manger I again tapped the phone to pay, the cashier’s response stunned me – “Do you realise that if someone gets hold of your phone, all your money is gone?”, he asked me. After I regained my speech, I said, “is this what you tell all your customers?” Unfortunately, the overly emphatic “No!!!” could only mean, “yes, I do”… How does that help the already security-anxious consumer? Overall, I’ve enjoyed tapping my phone over the last few days. Having said that, more often than not I reached for my actual wallet only to remember to take out my phone (old habits die hard!) While the experience now is easy – literally, “tap and go”, it’s not really a step change from paying by card. And there are no additional services for now, other than the summary of transactions I get on the phone. It’s enough to excite my inner payments geek, but my experience seems to suggest that we are still some time off from a mass market adoption of NFC.

Reflections on the Remote Deposit Capture Summit 2012

I had the pleasure of attending the Remote Deposit Capture Summit 2012 in Orlando last week. As in prevous years, the Remote Deposit Capture Summit 2012 was a helpful networking event for those who derive their livelihood from RDC. And as in previous years, the number of new faces were few. To my eyes, there was a singular source of excitement at the Summit this year, and it was again all about mobile. Discussions with a number of financial institutions prior to and during the event suggests that mobile RDC is a source of both excitement and aggravation. The excitement is a function of the large and growing appetite among consumers and businesses for the capability. Stories abound about how enrolments and subsequent deposits happen within minutes of making apps available on the Apple iStore. Such stories are simply…amazing! The aggravation reflects a growing realization that we may have collectively over promised and under delivered mobile RDC’s efficacy to consumers. Said simply, the advertising makes mobile RDC appear faster and easier than it typically is. The unfortunate result is that an alarming percentage of deposit attempts fail. Worse, many banks don’t have clear visibility to these dissatisfying interactions and feel powerless to address the problem. In several cases, banks explained that prior to a deposit being accepted, they can’t track the activity back to individual users. Don’t misunderstand my comments as being down on mobile RDC. I’m a big fan. What the RDC Summit drove home for me is that significant improvements need to be made in the user experience. Two things appear central to doing so. 1. Improved integration into mobile banking platforms. Particularly in the area of analytics to help financial institutions better understand the customer experience and address poor experiences with targeted customer outreach. How many banks provide real-time help to depositing customers who are having difficulty? Not many. 2. Improved image analytics. Image analytics engines have come a long way over the past few years, but the extreme variability of mobile image capture has proven to challenge even the best of them. The space, once the sole purview of Mitek Systems is now a hotbed of competition from AllMyPapers, Top Image Systems and others. Trends in product development point to real-time user feedback designed to reduce the variability in the raw images. The end result, will hopefully be reduced image rejects, reduced back-office exception processing and improved customer satisfaction. It can’t come soon enough.

The first of many – trade shows ahoy!

My colleagues have already blogged about their hectic conference schedule, and I can sympathise with them. Whilst they are very important and useful, equally they are very hectic and tiring! Next week is BAI in Washington, where all the banking team from the US and Europe will be in attendance, including Robert Mancini, our latest hire. I’ll be then leaving to join Bob, Robert & Jacob in Miami for AFP. This will be my first time at this show – for many varied reasons, I’ve never quite made it previously so looking forward to it. And then shortly after, it’s my biggest event of the year – Sibos. This year it’s in Osaka, Japan. It looks as if it could be a slightly strange show. Many clients are sending fewer people, and several “serial exhibitors” are only sending attendees this year. Compared to previous locations, the perception is that this is a more expensive and logistically harder venue for the event, and that does seem to be impacting attendance. News reports today suggest that the 3 largest Chinese banks have withdrawn because of the growing tensions between China and Japan over a disputed territory. Couple that with a concern that has surfaced is the location of next years’ event, Dubai, which some people believe will also have lower attendance, some are pondering their future commitment to Sibos. With the show not returning to Europe until at least 2016 (Boston 2014, Singapore 2015), it will be interesting to see if the show evolves to address these concerns. Regardless, we still believe it’s a “must attend”. But my conference season started early. Last week I was in Berlin speaking at EXPP. This is the major electronic invoicing and billing show globally, and I was invited to keynote day 2. I was talking about my recent series of reports where I state that banks need to revisit e-invoicing. The presentation went well, with at least one member of the audience vociferously agreeing with my analysis. What were missing though were the banks. The show was as well attended as ever (c.400 attendees and at least 20 exhibitors), yet the bank attendance was probably at the lowest in the history of the event – I counted about 10. It would seem then that there is a real division in the market. We’re party to lots of interesting discussions, which we obviously can’t always share. But it would seem that there is a very clear group who “get it” and about to “just do it”. What will be interesting is to see how successful they are and whether other banks can play catch-up in time. Next up is Commercial Cards & Payments, this Thursday & Friday in London, where I’m part of the Ask The Expert panel. See you there.

Mobile Banking Around the World at BAI

I will be speaking at BAI Wednesday, October 10,9:45 AM. The title of the presentation is, “Mobile Banking from Around the World: What the US Can Learn.” It promises to be an interesting discussion. If you are attending BAI, I would encourage you to attend. From the BAI website: Mobile banking is a global phenomenon and banking institutions around the world are creating innovative business models that can be applied in North America. Hear insights from two key global players – Hana Bank, Korea who for example has gained 250,000 mobile banking customers in 2 years and Bankinter, Spain, who has had mobile offers with a response rate as high as 9.2%
  • Understand how you justify funding the mobile initiatives
  • Learn about Hana N Coupon, a bank-led merchant reward program
  • Hear about Bankinter’s labs, which test new concepts with the public
For those of you not able to attend this session. There will be a full stable of Celent analysts at the event:
  • Bob Meara
  • Gareth Lodge
  • Jacob Jegher
  • Robert Mancini
  • Stephen Greer
  • Zil Bareisis
Many, but not all of us are fully booked. Please reach out to your account manager or to schedule a meeting.