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Essential Fintech Reading: Jan 23-Feb 1

Account Switching Made Easy Doesn't Increase Account Switching In The UK

Dan Latimore, Senior Vice President of Celent's Banking Group, writes that account switching rates have barely budged in the UK, even after the launch of the Current Account Switch Service in September 2013, which enabled consumers to switch their accounts between banks within 7 days. Latimore writes that "switching hasn't increased significantly despite having been made much simpler and easier, and that overall rates remain low, between 1.8% to 3.0% per annum."  


"Customers know the foibles of their current bank, and while they may be unhappy with it, they at least know what to do and what to avoid. They don’t know the ins and outs of the alternative banks, and don’t think that they’ll be much better," writes Latimore. "In the absence of a markedly better alternative, inertia sets in and they remain where they are."

Confronting Skepticism Around The Value Of Digital Investments

Jim Marous of the Financial Brand addresses the struggle of banking executives in both justifying and measuring the success of their digital investments. The authors of a Novantas report, Digital Investment: Success Driver or Bottomless Pit?, "point out that financial executives are becoming skeptical of proposals and funding requests because of previous digital investment initiatives that delivered lackluster (or poorly documented) results."  Novantas recommends that digital investments have a business case based around improving sharing of wallet, driving cost savings (branch to digital, call center to digital) and improving customer acquisition.

Bank of America Triples Mobile App Spending, Plans Cardless ATM Rollout

Robert Barba of American Banker reports that Bank of America plans to triple spending on its mobile app in 2016. "Consumer use of bank branches was surpassed by mobile in 2015. In response, we're seeing banks redirecting funding from low-growth channels to mobile," said Daniel Van Dyke, an analyst at Javelin Strategy & Research. Among new product offerings, Bank of America has extended an on/off switch for debit cards — similar to Discover's "Freeze-It" option — allowing customers to temporarily suspend their cards when they're misplaced. The company also plans to introduce cardless ATMs and expand its two-way text capability for alerts around suspicious credit card activity, enabling customers to validate a transaction or confirm it should be blocked.

Ten Things Digital Teams Should Be Doing In 2016

Jim Marous of the Financial Brand shares the findings of a new Mapa Research report, Ten Things Digital Teams Should Be Doing In 2016. These include:

  • Designing Customer-Centric Apps
  • Streamlining App Strategy
  • Removing Friction from the Onboarding Process
  • Using Data Analytics for Targeted Marketing
  • Personalizing Functionality
  • Personalizing Products and Content
  • Investing in Open API Technology
  • Building a Strategy to Compete with the Disruptors
  • Investigating the Potential of Blockchain
  • Creating a Seamless Multichannel Experience

Marous notes that banks and credit unions that analyze internal and external data "can create robust profiles of their account owners. This includes insight on products held, consumer interests, preferred channel(s), shopping patterns, and even where and when banking activities are conducted. Leveraging this information can help organizations develop targeted digital marketing campaigns that come with a far higher level of success."

Mapa addresses the ways that incumbents can cope with disruptors. Some banks and credit unions, such as Barclays and BankMobile, are focusing on in-house innovation. Others, such as BBVA, are experiencing success by partnering with and investing in fintech

How Can Banks Best Support Digital Transformation?

Writing for the Financial Brand, Accenture's Safwan Zaheer argues that banks need to design products that are easier to use and better utilize data to propel their digital transformation strategy. This includes personalizing banking products — f.e., facilitating access to publicly available school ratings and neighborhood crime rates when consumers buy a home —and embracing new financial technologies such as blockchain, cloud payment services and emerging lending platforms. Zaheer also advises banks to "design a blueprint that defines a vision and operating model. The blueprint will outline the future state technology foundation, product pipeline and governance structure that can help establish a bank as a digital leader."