J.D Power: Mid-Size Banks Need To Spend More On Digital
Digital services are key in driving customer satisfaction and mid-size banks can’t settle for the status quo. Those are the key findings of a J.D. Power survey of more than 80,000 bank customers, reports BizTech’s Meg Conlan. Big banks like Citi, Chase and Bank of America have narrowed the customer satisfaction gap with mid-size banks by offering superior mobile and online services and J.D. Power’s Rocky Clancy states that branches with self serve kiosks and tablets score highly. However, the picture is not entirely rosy for big banks, whose mobile satisfaction scores suffered a six point drop due to difficulties with ease of navigation.
Favoring Offense Over Defense, South African Bank Expands Into Cellphone Service To Attract New Customers, Improve Retention
While U.S. banks are preoccupied with the threat of losing their customers to technology companies with digital payment and mobile wallet solutions, South Africa's First National Bank is looking to encroach on another sector's turf. FNB began offering cellphone service to its direct-deposit account holders last month, aiming to expand its relationship with the customer through a one stop shop for financial and mobile accounts. "The more we link them to other products we have, the more that helps with stickiness," Ravesh Ramlakan, CEO of FNB Connect, tells American Banker.
American Express Rolls Out Fast Checkout Solution
American Express has introduced Amex Express Checkout, enabling cardholders to pay for goods and services via web, mobile and app with the password they use to access their Amex accounts. The service launched in the U.S. with a select group of retailers including Burberry, Gap, Ticketmaster and Avis. American Express has also partnered with and made a strategic investment in Stripe to help the new feature gain traction with online businesses, reports TechCrunch. By autofilling billing and shipping details that trip up many online transactions, Amex Express Checkout counters one nuisance that has driven lower purchase rates. American Express does enter a crowded space, packed with platforms like Visa Checkout, Apple Pay and digital wallets such as MasterPass and Google Wallet.
PayPal Acquires Money Transfer Firm Xoom, Begins Trading As Spin-Off From eBay
PayPal announced the acquisition of online money transfer firm Xoom for $890 million, a deal Xoom shareholders are contesting, claiming it undervalues the company. The deal is expected to close in the fourth quarter of this year. Rivals Western Union and Moneygram International saw their shares fall in the aftermath of the announcement. PayPal also debuted this week on NASDAQ, formalizing its spin-out from eBay. Valued at $44 billion during its first full day of trading, PayPal represented 60 percent of eBay's market capitalization even though it 2014 sales were only 40% of the combined companies’ revenue. "One reason investors are more excited about PayPal than eBay is the payment unit's faster growth rate. Revenue was up 19% to $8 billion last year, about double the rate of growth in the older e-commerce and auction unit," notes Yahoo Finance's Aaron Pressman. PayPal handled $235 billion worth of transactions last year, a 26 percent increase driven not just by the company’s payment service but by the Venmo app it acquired two years ago.
Favoring Technology Over Face-To-Face Relationships, Millennials Seek Digital Products
Being able to attract, retain and delight Millennial customers will separate the leaders from the laggards in financial services, reports a new white paper from Innotribe and Wharton FinTech. By leveraging the explosion of mobile, social networks and this segment's preference for companies with a social or environmental mission, the paper notes that companies like Wealthfront, Venmo and Wonga are excelling. Authors Daniel McAuley and Steve Weiner find that Millennials trust technology more than face-to-face relationships and are looking for new digital products with lower fees to manage their assets.