April 20, 2011
Over the past week I've accrued a stack of other people's business cards about as thick as Brett King's book, 'Bank 2.0.'
Between TowerGroup's Financial Services Strategy & Technology Conference in Boston and Fiserv's Focus 2011 Spring client conference in Las Vegas, I've interviewed bankers, technologists, CEOs, CFOs, CIOs, vice presidents, lawyers, Elvis impersonators, et cetera. Some business cards came with recipes, others were made of translucent, sparkly plastic. All of them came with a story.
While it'll take a little time to decompress and turn a notebook full of my not-so-pretty handwriting into stories worth reading, I can share some of the topics on everyone's mind.
They go a little something like this:
Regulation: Dodd-Frank, and particularly the Durbin Amendment's threat to debit interchange fees, is something all bankers are concerned about.
Loyalty/Stickiness: There's a sense that, with the new regulation, banks will be working harder than ever to attract and maintain customers. While traditional debit rewards and free checking are already starting to disappear from the big banks, it represents an opportunity for smaller community and regional banks to incentivize customer relationships through loyalty rewards, merchant-funded rewards and the thing one thing a small bank can do that a national one can't: highly personalized customer service. Through boosting customer activity and incentivizing and rewarding the loyal, valuable customers who have multiple relationships with the bank, it could represent a means for banks to mitigate the potential losses of oncoming regulation.
Mobility/P2P Payments: Mobile banking -- the ability to do the basics like check account balances, move money between accounts or use geolocation to find a nearby branch or ATM -- is becoming pretty standard. Mobility, however, or the ability to make meaningful, contextual experiences regardless of location, is probably the next big thing. One of the driving forces, some believe, is in enabling person-to-person payments via mobile device. One statistic I heard during Fiserv's event is that U.S. households originated $865 billion in P2P payments in 2010. By sidestepping debit, ATM, online or checking to do this -- i.e. implementing cashless mobile money capabilities via mobile -- banks could have an opportunity to save on cost per transaction, or at the very least, take back some of the stake from outsiders like PayPal.
Security/Fraud: Another topic that's been around as long as banks. But it's a real threat. Banks are looking to continue adding layers of protection as more customers adopt online and mobile. The problem is that fraudsters are smart, have their own R&D budgets and are often outside the jurisdiction of U.S. law enforcement. It's expensive to fight fraud, but it's more expensive to lose money and, potentially, customers.
Relevance: Ultimately, banks are fighting to stay relevant in world where the line between traditional banking and nonbank entities is more perforated than ever. A customer can't tell the difference between a PayPal or a bank when it comes to moving money or purchasing goods and services. Banks seem more willing than ever to learn lessons from other consumer industries and adapt.