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Essential Fintech Reading: July 23-29


Mobile Banking Investments Drive Customer Satisfaction Improvement

The mobile banking investments of the big banks — Bank of America, Chase, Wells Fargo, Citibank — are creating a huge uptick in their customer satisfaction scores, reports Jim Marous of the Financial Brand“The large banks’ satisfaction scores increased by more than 50 points between 2012 and 2016, and are now slightly higher than the scores for both regional and mid-sized banks. Why? Increased investment in digital delivery by the largest banks has to be one important reason," Ron Shevlin, director of research at Cornerstone Advisors, tells Marous.

J.D. Power research shows "there is an immediate lift in overall satisfaction when customers use mobile banking (+27 points on a 1,000-point scale), and this impact increases even more when banks provide their mobile banking customers with a highly satisfying experience (+82). J.D. Power notes that, “The outlook for Big Banks remains positive, driven by their ability to invest in customer-centric innovations (e.g., digital channels, analytics, and branch transformation), as well as their success in growing customer segments.”

Mobile not only drives customer satisfaction but reduces branch visits, providing financial institutions with significant savings. J.D. Power found branch visits can be reduced by 33% if a customer is encouraged to use mobile banking and use their phone for check deposit.

Big Banks Set Sights On Instant Payment Market

Michael Corkery and Nathaniel Popper of the New York Times report that big banks are aggressively entering the instant payments market to reverse the gains made by Paypal's Venmo and Square Cash. Wells Fargo has joined JPMorgan Chase, Bank of America and US Bank in allowing customers to send money within seconds to another person's bank account. "The banks worry that if they do not respond with their own instant payment offerings, they will be relegated to performing less-profitable back-office functions for hip new payment companies, which make their money primarily by charging small fees to customers who pay by credit card rather than directly from a bank account," write Corkery and Popper. The P2P market is seen as valuable because it allows finanial companies to start a conversation with the consumer around more profitable products like loans.

BBVA Shakeup & Emphasis On Digital Continues
Bloomberg reports that BBVA is preparing its second management reorganization in 14 months as Chairman Francisco Gonzalez accelerates the bank's push into digital banking. While BBVA weighs possible job cuts and a shrinking of its branch network in Spain, additional responsibilities — asset management, global wealth and consumer finance — have been delivered to its Customer Solutions unit, led by former Barclays Plc digital officer Derek White. “These changes are set to really push BBVA’s digital transformation as the bank is ahead of its competitors in embracing a new way of doing banking,” said Ricardo Wehrhahn, a Madrid-based managing partner at banking consultant Intral Strategy Execution. “Derek White has become one of the managers with more powers within the bank to lead the digital revolution in a faster and deeper way."
Millennials Making Biometrics A Reality In Banking
ABI Research suggests that the biometric market is pivoting from consumer electronics to biometric banking technologies that appeal to millennials. Payment card companies and startups alike have been integrating biometrics into mobile payments, smart cards and ATMs to improve security. “This market shift is occurring faster than initially anticipated, with global revenues for biometric banking technology expected to top $4 billion by 2021,” says Dimitrios Pavlakis, industry analyst at ABI Research. “North America alone accounts for almost $8 billion in payment card fraud, a statistic that suggests the need for greater transaction security." While banks worldwide have been adopting fingerprint, voice and facial recognition, another technology — vein recognition — could soon find its way into ATM applications; companies like Fujitsu and Hitachi are leading the charge. 

Topics: fintech