Forte Financial Blog

Musings on the Future of Contactless Payments

David Birch has a great post on the future of contactless payments vs. phone payments:

I've heard more and more people -- on the issuing side -- talk about skipping over contactless cards completely and just moving directly to phones of one form or another, either NFC phones or phones with NFC stickers on them. The argument is, essentially, that it's hard to deliver enough added-value to compete with the cash just using a card whereas a phone can be a platform for more services for the both the payments and retail sectors.

There is much food for thought in the post, so don't stop reading - go here for the rest.

Demo Videos from FinnovateStartup Posted Online - Very Cool

Back in April I attended Finnovate Startup here in San Francisco and live blogged the event. It was a whirlwind of 40 startup/young financial technology companies presenting 5 min demos (no scripted PowerPoint!) of their products/new features. Lots of energy, great people, and some really cool stuff.

This week the videos were posted online, so now you can watch from the comfort of your office, cafe, or sofa. Check 'em out here.

Vendors represented include:

Wells Fargo Enhances Corporate Mobile Offering to Include Wires and Positive Pay

My previous post on Wells Fargo's mobile banking for corporates was very popular, so I imagine Forte Blog readers will be interested in these recent updates to WF's CEO Mobile service:

Wires: CEO Mobile users now can initiate and approve wires from wherever they are and are no longer tied to their PC in the office. Corporate treasurers rejoice!

Positive Pay: Image positive pay gives mobile customers the ability to view exceptions, including the check image -- an important protection against fraud -- when deciding to pay or reject check exceptions.

In addition, a number of other features are being piloted:

• Manage and decision potentially fraudulent ACH transactions
• View even more balance and reporting information
• and company administrators can perform tasks such as resetting user's passwords.

Mobile Banking with Global Implications: Interview with Obopay CEO Carol Realini

Check out Sramana Mitra's six part interview with Obopay CEO Carol Realini: "Bringing Banking To The Cell Phone Masses"

Corporate Mobile Banking: Separating Hype from Reality [NACHA Payments]

[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]

Corporate Mobile Banking: Separating Hype from Reality [NACHA Payments]

Jacob Jegher
Senior Analyst, Celent

Amy L. Johnson
Vice President, Wells Fargo

Synopsis from Conference Program

Mobile banking is generating a wave of excitement in the North American marketplace. While much of the emphasis is on the retail market, corporate customers stand to benefit tremendously from this nascent channel. This session provides an overview, based on independent research from Celent, of the latest corporate mobile banking technology trends. The state of mobile cash management solutions is examined through a different lens, by distinguishing hype from reality. This session provides a detailed picture of what future mobile cash management solutions will look like, as well as descriptions of key features and functionalities that will attract users to this blossoming technology. Finally, it will help banks to ensure that their corporate mobile customers are provided with the proper security and authentication mechanisms while maintaining ease of use. A case study is presented by a pioneering institution in the mobile banking service for business sector, including an overview of its solution, descriptions of functionalities, lessons learned and business benefits.

My Observations & Comments

This was one of the best sessions I attended - an ideal balance of research/industry observations from Celent and real-world experience from Wells Fargo.

Celent

Eighty one percent of corporate executives are linked to their office through a mobile device. However, in the US 40% of business people are connecting to their corporate email using a personal device (an iPhone or other smart phone that they themselves purchased). This poses security challenges for corporate IT and those that seek to promote mobile banking and payments for corporates.

Mobile is proven to be effective in driving productivity, enabling remote work, and connecting disbursed teams. According to Celent four trends will drive the adoption of mobile banking and payments for corporates: 1) the evolution of full featured devices, 2) "BlackBerry mania", 3) Faster networks that provide a better user experience, and 4) the increasing prevalence of data plans.

Yet banks are slow to adopt new technologies, and mobile banking is no exception. Many banks are cautious about mobile banking in general, let alone offering mobile services for corporate customers. Security is obviously a major concern. Moreover, most vendors focused on corporate payment solutions do not feature mobile solutions and most mobile vendors are focused on consumer solutions. And mobile solutions are still immature. It is not clear whether text messaging, mobile browser, or device applications will be the dominant interface (or some combination). Celent predicts that mobile applications will be dominant, despite the challenge of developing multiple versions for each phone model and wireless carrier. And, thus far, corporates are not clamoring for mobile banking.

Demand for mobile banking:

Wells Fargo is the first bank to offer mobile banking to its corporate customers. Celent expects that seven additional banks will launch corporate mobile banking this year, and 6 more next year.

Wells Fargo

Wells Fargo believes that mobile banking and payments are inevitable and intends to lead in the mobile space. Their customers demand it and they have a mobile product road map to guide their progress. They are relying on text messaging and mobile browser for now, avoiding mobile applications (they are less enthused about applications than Celent is).

Mobile is particularly valuable for corporate clients as the need for dual controls and fraud prevention increases the number of approval steps for day-to-day payment activities. As the workforce becomes busier and virtual it is increasingly likely that corporate finance managers are away from their office (if only in a meeting down the hall) when they need to approve a payment or resolve a discrepancy/inquiry.

Wells Fargo's corporate mobile approach targets four types of transactions:

"Snack sized" functions (a Gartner term) - discrete tasks that take less than 5 minutes. The don't require enough time for it to make sense to boot up your laptop. You can do them while you stand in line, in between meetings, or waiting for your flight.

Time sensitive tasks - deadlines looming, expiring rates, or payments due.

Dual Control tasks - those that require two or more approvers, increasing the odds that one or more approver is away from their desk.

Fraud detection - utilize mobile to alert customers that there may be a real time fraud risk. Send just enough information to make a decision, or at least give manager an alert to phone the bank and learn more.

Wells Fargo is taking  an incremental approach, rolling out "a little something every quarter" and involving its customers to get continuous feedback. The solutions are very simple and elegant. For example, if you are approving a wire using the web browser on your mobile phone and have a question about it, the phone number of the person in your company is included in the record so you can click to dial that person directly and ask a question. When you conclude the phone call, the browser session resumes so that you can seamlessly approve the transaction. 

Lessons learned:

1) Involve customer service early. Train them to handle phone calls.

2) Do not expect high usage at first. It is a big shift for the customer. Use patterns vary from daily to occasionally.

3) Get your SMS short codes lined up early (lots of lead time necessary)

4) Be prepared to be nimble

>> Return to index of my posts from NACHA Payments 2008

ClairMail - Secure, Efficient, 2-way Mobile Banking & Payments [NACHA Payments]

[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]

ClairMail - Secure, Efficient, 2-way Mobile Banking & Payments [NACHA Payments]

ClairMail enables two-way customer interaction via mobile phones, regardless of the type of phone and the wireless network, using the phones existing software and standard features, including email and SMS messaging, mobile web and native client applications. No new mobile phone software is required.

The big news from ClairMail at the NACHA Payments is that it is partnering with WAUSAU to extend the WAUSAU remittance platform to the mobile channel. ClairMail Mobile Lockbox technology enables an alet message sent to the payer's mobile phone with details such as payee name, dollar amount, and due date. The payer replies to message to instantly pay the bill from their mobile phone. If the biller is fortunate (and the consumer not particularly adept at cash management) the payee may respond immediately to the alert, rather than paying on the due date.

Regardless of the desire or need for consumers to pay their bills from their mobile phone, I do think that mobile alerts for corporate payments make a lot of sense. Because the payment amounts are larger and the stakes of missing a payment are often higher, corporate payments are particularly suited for mobile transactions - they have the added benefit of being discrete, enabling corporate finance managers to quickly and quietly respond to urgent payment matters from meetings, on the road, and off hours. In particular, positive pay confirmations, wire payment confirmations, and lockbox exception handling are well suited to the ClairMail solution.

One particularly cool feature overcomes the awkwardness of entering a URL and username + password combination into a mobile browser. Using the ClairMail solution the customer can send a text message "go" to their financial institution and receive in reply a dynamic link. Upon loading the dynamic URL the mobile user enters an encrypted session and only has to enter a PIN rather than their username/pw pair.

>> Return to index of my posts from NACHA Payments 2008

Peter E. Raskind, President and CEO of National City [NACHA Payments]

[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]

This year's keynote presentation was by Peter E. Raskind, President and CEO of National City. The topic was supposedly "Executing Payment Strategies in a Changing Environment" but it sounded a lot like an infomercial for National City. I tuned most of it out, but the Q&A was quite interesting.

Q&A with Peter E. Raskind, National City

There were many questions about subprime housing and the credit crisis and regulatory response. Raskind expressed faith in the free market, and emphasized that the industry "must do the right thing in a timely manner" or regulators will step in.  One questioner cited a recent Economist article advocating a "countercyclical" approach to bank regulation (building reserves during good times in anticipation of the eventual bad times) and Raskind agreed that a more modulated measurement of capital adequacy (a sliding scale based on bank risk profiles) rather than a binary threshold makes sense.

With regard to banking competition (and consolidation, in particular the Chicago market) Raskind stressed that banks must focus on execution in order to earn the right to survive. Raskind acknowledged the "real fear" of  bank disintermediation by PayPal, Google Checkout, telecoms and mobile startups. He characterized the access to payment systems for consumers and businesses as the last great franchise left to the banking industry and an enormously profitable one. He said that the competitive threat is relevant and of enormous concern. Banks must "earn their customers business by providing safe, reliable access to payments at competitive cost."

He endorsed the consolidated payments hub concept, but did not think it would come to fruition in during the course of his career. He believes that mobile payments are a viable substitute for currency, particularly small value transactions, but predicted a more glacial rate of mobile adoption rather than cataclysmic change.

Raskind deferred that representatives from BofA and Wells Fargo would be better positioned to comment on their recently announced plans to consolidate their ACH processing, but did wonder about the two banks' ability to differentiate their brands with their customers.

>> Return to index of my posts from NACHA Payments 2008

Overall Observations & NACHA Leadership Interview [NACHA Payments]

[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]

Overall Observations &
NACHA Leadership Interview

ACH Transaction Growth: Over All and B2B - More than 18 billion automated clearing house (ACH) payments were made in 2007, a 12.6 percent increase over 2006. Business payments increased to 2.5 billion, up 8.5 percent over 2006. Financial EDI records (remittance data passed through the ACH network) increased by 11.9 percent and the number of Financial EDI payments increased 18.1 percent over 2006. That means that a whole lot B2B payments were made via ACH but the remittance information traveled from buyer to seller via other means (mail, email, fax, phone, etc.).  Details here.

Leadership Transition at NACHA - At the end of the year, Elliott McEntee will step down after 18 years as CEO of NACHA. He has led the ACH organization through unprecedented growth as the payments industry transitions from paper to electronic. Many innovative, non-bank payments solutions leverage the ubiquity of the ACH network in ways unimaginable eighteen years ago. McEntee's successor, Janet Estep, formerly an Executive with US Bancorp, is charged with defining a vision for NACHA's future. A future that, according to NACHA's Board Chairman Steve Ellis, will not only continue to focus on the migration of paper payments to electronic, but also, increasingly focus on mobile and global payments.

I had an opportunity to talk to McEntee, Estep, and Ellis on Tuesday afternoon. After only one week on the job, it is too soon for Estep to outline her plans (I'll check in with her in a few months), but my first impression is positive. She emphasized the need to collaborate with all of NACHA's constituencies - member banks, technology partners, consumers and businesses - in order to ensure the ACH network provides reliable, secure payments that meet the needs of both senders and receivers in a number of contexts. And she vowed to rid future conferences of showgirls and Cher impersonators.

When asked about the tension between NACHA's role in defining standards and rules and its efforts to develop products, Estep made a distinction between traditional product management (from concept to development, including pricing and going to market) and what she would term "initiatives" at NACHA, which does not imply full ownership or include pricing and go-to market execution. Her view is that NACHA has a unique role in collaborating with its constituencies to enable new payments initiatives. Ellis also views NACHA's efforts as distinct from products, seeing the organization as an enabler of new products, leveraging the rails that already exist to do more and more. He characterized the NACHA efforts (EBIDS, Secure Vault Payments) as proof of concepts/pilots - not unlike a laboratory.

Increased Focus on B2B - I was particularly pleased that Ellis, Estep, and McEntee all stressed the importance of B2B payments to NACHA's future strategy. NACHA is increasing its focus on B2B, not only conducting research to determine small business payment needs, but also launching a number of its own payments initiatives focused on B2B, e.g. the proposed BIZ transaction that enables invoice flipping. I will be attending the NACHA Councils "MEGA Meeting" in June to learn more about the organizations B2B efforts.

Meanwhile, in the exhibit hall mobile and remote deposit capture had the most buzz. I had a number of interesting one-on-one conversations with  representatives from eGistics, ChoicePay, ClairMail, OB10, Wausau, NetDeposit, and GoldLeaf. And of course, the recent announcement of Wells Fargo & BofA's plans to merge their ACH operations was the subject of much discussion.

>> Return to index of my posts from NACHA Payments 2008

NACHA Payments 2008 - Forte Blog Index

I took a slight detour en route home from Las Vegas (via Death Valley and Yosemite - spectacular!) and just finished writing up my observations.

This year is the largest NACHA Payments conference to date (they get bigger and bigger each year) with nearly three thousand attendees. There were sessions devoted to ACH, check electronification, card solutions, global payments, corporate payment solutions and the payments industry over all. Over the course of the conference I attended eight sessions and had one-on-one conversations with seven vendors. I also participated in a press conference with the NACHA Leadership.

General Sessions & Overall Observations

Summary & NACHA Leadership Interview

Keynote/Peter Raskind, National City (general session)

Break Out Sessions

International Payments
ACI Worldwide & BofA

Global Remote Deposit Capture
Goldleaf Financial and Global Concepts/McKinsey

Corporate Mobile Banking
Celent & Wells Fargo

XML All Stars
BofA, JPMorgan Chase, GE Corporate Treasury, Upper Midwest ACH Association, ABN AMRO Bank

B2B Outlook
Federal Reserve, AFP, Cal State AAA, Costco

Remittance for Wires
Federal Reserve, CHIPS, SWIFT

NACHA's B2B Strategy
NACHA, Celent

How To Turn Your Online Bill Pay Expense into a Revenue Stream
eCom Advisors

Vendors

Bob Lund/eGistics

Elspeth Bloodgood/ChoicePay

Joe Salesky/ClairMail

Rob Peyton/OB10

Kathy Strasser/Wausau

Danne Buchanan/NetDeposit

David Peterson/Goldleaf

Live Blogging from Finnovate - Best of Show

I am live blogging from Finnovate Startup in San Francisco. Jim Bruene and his team at NetBanker gathered 40 startups, rebrandings, and company debuts in online banking and finance. Each participant had a brief 5 minutes to demo their product.

We're back from the networking and eagerly anticipating the best of show announcement (based on audience votes)...

BEST OF SHOW

• 3rd Place (tie) - Zecco and First ROI/BancVue 
• 2nd Place - Jwaala 
• 1st Place - Zopa

More coverage here:

• Intro
• Morning Session 
• Afternoon Session 
• Observations & Trends [coming soon]

Live Blogging from Finnovate Startup - Afternoon Session

I am live blogging from Finnovate Startup in San Francisco. Jim Bruene and his team at NetBanker have gathered 40 startups, rebrandings, and company debuts in online banking and finance. Each participant has a brief 5 minutes to demo their product so I’ll be typing as fast as I can. (Please forgive typos!)

AFTERNOON SESSION

Expensr / MoneyStrands 

Just acquired by Strands - rebranded as MoneyStrands. Redesigned user interface. Stronger focus on widgets because users felt online managers were too simple and desktop managers were too complex. Use widgets to customize to make as complex as you want; drag and drop, etc. Automatically sync bank accounts. New analysis widgets, including incomes & expenses.

Analyze your money and compare against people like you (career, age, location, etc.) by category. Parse your transactional data and suggest improvements. Suggest products or small day to day behavior.

SmartyPig 

SmartyPig is for everyone. Social banking application "20th century piggy bank." Reverse buy now, pay later trend. Help people save for very specific goals in your life. Possible to add minors (kids) to your account and teach them to save. 

Make goals public. Family and friends can track your progress toward your goal and make gifts. 

Advertisers, sponsors can make special offers based on your goals. 

Do not have to change your bank. Every goal must have a monthly recurring contribution from your bank. All funds at SmartyPig are FDIC insured. 

Facebook widget is linked to your public SmartyPig page that shows your goals and progress. Link to your friends and family via SmartyPig and gift them. Can also buy giftcards for someone who is not using SmartyPig (they can then create their own account). 

Stop goal at any time. Two choices to access funds: a) create SmartyPig MasterCard or b) create a SmartyPig gift card with a major retailer (often with incentive). 

Invesra 

Online personal investment manager that can be private labeled or co-branded by financial interfaces. Consolidate retirement accounts (stocks, mutual plans, ETFs, etc.)Wizard walks user thru creating a profile. Demographic data, retirement goals, load account data, determine risk profile. Risk discovery tool to anticipate best case/worse case scenarios based on historical data and future projections. 

Personalizes advice that is rendered on the site based on data entered in wizard. Generate Target Profile and compare to current plan. Demonstrate changes to allocations necessary to achieve target. Evaluate both value and cost of current and target. Can take action 

1) Open a fully managed account or 2) if self-managed provide buy/sell list to reallocate account by account. Report can be emailed, printed, branded with FI logo. Education can  be customers to partner. 

Delivering sophisticated investment tools previously only available via financial planner to mass affluent online. 

Wesabe 

Leading personal finance community on the web. Community, financial management, insight based on community's collective data. Up until now, mostly advice and support. But now, with value engine, offering insight based on aggregated anonymous community data - not sponsor generated offers. Show community statistics vs. your own spending patterns. Average dollar amount, frequency, percentage of other Wesabe users that recommendations. Using tags that are created by users themselves to parse data. Can drill down by tag to find merchant comparisons based on your transactions. 

Trader Joes vs. Safeway vs. Whole Foods. Can 'cheer' the tip, add your own comment, or hide it the tip. 

Possible to search. For example, want to buy a kids bike (birthday gift for daughter). Search for merchants in your area that sell bikes. See community data by 

Provides link to Yelp for additional location data and more reviews. 

Make better financial decisions based on the "Wesabe value engine" 

Tyfone 

Mobile banking and payments. Build technology to secure transactions via your mobile phone. Mobile banking, contactless payments via mobile, identity management, remote payments, retail services. Enable independence between choice of bank and wireless carrier. 

Utilizing memory card slot on phone (not SIM card). Has security built in with smart card controller for contactless payments. Demo with Palm (not NFC enabled) memory card enables near filed communications. Bank does not have to have relationship with wireless carrier. Third chip that enables security. 

12 patents applied for (one issued so far). 

Can also support software only mobile banking. Demo with iPhone. Integrate with GPS to find enabled retail locations nearby. Works with different software on handsets. 

Wonga 

From UK, live 5 months thus far. Addressing small, short term loans to consumers via web or mobile. Quick. Example. Booking flight on EasyJet to go to Barcelona. But low on cash. Link from merchant to Wonga. How much do you want, for how long? Real time calculation of what it will cost (amount borrowed + fee). Enter basic info. Real time evaluation of risk, receive verification code on mobile phone. Enter verification code on web site, enter banking info to receive funds, enter banking account to repay (not necessarily the same). Money available within minutes.   

Preview of mobile solution not available yet. Out and about. Need to make a purchase. No laptop, so no Internet capability. Send text message to Wonga address indicating amount of money you want. Enter PIN. Money is funded to bank account. Now can use debit account to make purchase. 

Not running up long term debt. 

Loanio 

Product is about to launch. This is the first public unveiling. New peer lending to facilitate borrowing and lending via an auction platform. Challenges with peer lending today: lots of traffic, but many consumers wanting funding cannot get funds. Poor or low credit or less than compelling profile. 

Loanio offers co-borrowing. Even if you have good credit you may want to enlist a co-borrower to enhance credit. 

Normal and Platinum (additional qualifying info entered up front) listing services. Enter Loanio request, dollars, term, interest rate willing to pay. Why you want it and how you will pay it back. Co-borrower and borrower provide more detailed information later (paycheck stubs, etc.) 

Potential loaners can view credit information on both borrower and co-borrower. Nice comic relief after lunch: demo featured pictures of Bill Gates, Michael Jackson, Madonna, and Hilary Clinton as potential borrowers and co-borrowers. 

ConfIdent Technologies 

Next generation security for online financial transactions. Used today with Live at Charles Schwab retirement. Distributed to 80 other FIs, passes muster regulators. Eliminates passwords but is more secure than other forms of authentication. 

Instead of username, choose images. You create categories (e.g dogs, airplanes). Then when you login each time you choose the pictures of the dog and the airplanes by entering the digit code in the corner of each image (in the right order) into the box below the images. Each time the images change, the digits change, and the order of the image categories changes. 

Withholds image display from unauthorized computers - authorized computers have soft token. Effective against phishing. Highly configurable. Change size of display, number of categories user needs to enter.   

Easier for user because images are easier to process than text (many years of research to support this theory). 

Very cool. 

IP Commerce 

Denver based. Address need to payment enable any application, provision payment services, address security requirements. Unlike other presenters today, not a bank, not a payment company. Partners have reach to thousands of banks - partners include [missed name], Chase Paymentech, and many software developers. 

Does not own relationship with small business. Bank does. 

Rapid receipts developed by a user using IP Commerce tools to payment-enable QuickBooks. 

Per BAI small businesses will change banks to get better services. Often make payment decisions based on guidance from IT service provider. 

Login and and have access to different services 

• service agreements 
• service bundles 
• sell services across product silos that exist in my bank

For example, business with merchant services and remote deposit at bank obtains verification code from bank. Most small business people don't know anything about payments. But they do know about software activation. So makes sense when bank provides an activation code. Enter with password. Talk via platform to determine services available to each merchant. 

Encrypting data on machine as authentication code is entered. 

Services/products supported: 

• Credit 
• Remote deposit capture 
• store value 
• gift flows 
• e-commerce (PayPal, Google Checkout) 
• ACH

Brand payment solutions, capture incremental revenue. 

SimpleTuition 

Student loans are not sexy. 

Simple solution for students to determine what their options are for student loans. Limited liquidity out there. Modeled after online travel space  in terms of interface. Enter basic info. Consolidate options. View, compare, and once select click out to go to the vendor themselves. 

Work with colleges and universities and partner with LendingTree and LowerMyBills.com etc. 

Been in existence two years; 40,000 leads to lenders this month. Looking to other verticals to expand offerings. 

Record = presentation was less than 3 minutes! 

BlingNation 

Open payment network enabling FIs to offer financial services to their customers via mobile. Both mobile banking and mobile payments. Cell phones or single purpose device (just for mobile payment). Branded software on cell phone. Push technology - receiving data from the bank real time as transactions occur. Can initiate payment, using your bank account, to send data to anyone using email address or their phone number. Enables proximity payments (catching on internationally, eventually) 

Demo'd sending amount from one phone to another. Using bank account (ACH) and PIN. 

Link phone to bank account or a prepaid card so you can access funds transferred to you via an ATM. 

Flexible platform. Balance on home screen so you know funds available. Interface can be customized, suits various handsets. Multiple technologies available e.g. blue tooth or NFC or finger recognition. Enable  interface with other applications that bank is offering. 

Zopa 

Worlds' first social finance community - started in 2005. 225K users worldwide (Italy, US, UK, adding Japan later this year). Adopt model to suit culture of each company. Not a peer to peer lender in the US - based on regulatory environment and security concerns partnered with Credit Unions. People who deposit money at Zopa are not lending money to borrowers. They are helping with cash payment. 

Borrower rates vary from 8.99 to 16.99. Immediate response and get loan funded within days. Borrower can reduce interest rate... 

How? Create profile to tell people about yourself. Investors deposit money in a Zopa CD. Original loan payment each month is augmented by help from members of the Zopa community. Example, $5000 loan, pay back just $2000. Getting help. 

Federally insured CD of up to $100,000. Buy CD at 3.75% but you are helping someone else at a rate of 83 cents per month. I can reduce the amount of return on my CD (to national average 2.90%) and designate borrowers to receive the other 85 basis points. 

TrustedID 

Allows hundreds of thousands of consumers protection vs. Identity Theft. Proactive protection, not credit monitoring (simply notifies you after your ID has already been stolen). Lock on front door vs. alarm to notify that intruder is in your home. 

Launched new service "ID Freeze" 

Family package of identity protection (unlimited number of adults and children in household). $15 per month. Vs. individual plan priced at approx. $100 a month. 

Monitor buying and selling of ss#, bank account data, credit card data, health insurance data online. 

Additional services: 

Require bank to contact you before creating account. 

Reduce junk mail. Anti-spyware or software for home computers. 

Easy to re-brand and co-market (private label with Suze Orman, 100,000 sold in a single day on QVC). 

MoneyPools

Help investors organize and analyze their investment. Example Harold with $2.4 million at Schwab and T.Rowe. Benchmark securities against appropriate assets. 

Drag and drop interface, sophisticated adjustment of graphs as click on various elements. 

My pools and public pools. Drill down by asset class to see detailed information. Auto pools generated and maintained by system. Can also create own pools. Track goals and view asset allocation of funds tied to specific goals. 

Strategies - how have they fared (eg. sovereign, Buffet, etc.) 

Aradiom 

Mobile strategies and mobile deployments do not always mesh. Many devices, issues related to deployment to multiple handsets. In 4 minutes, build mobile banking platform. Login, go to home screen, and 

Client wizard - goes on phone. Start with home page with about/login/about buttons. WYSIWYG interface. Output is a Java application that can be utilized on nearly any handset. Create foundation and then generate pages: home, login, about. 

Rich user experience without really knowing code. Interfaces to all backends: webservices, SQL Server, etc. 

Build mobile banking application easily from modular components. 

First ROI / CheckingFinder.com 

Community banks and credit unions are losing business. Offer checking account with CD style interest rate and free ATM nationwide but need marketing reach. First ROI and BancVue partner to offer online service to find, open, fund reward checking accounts online. Supported by National Advertising starting June 8th. 

Enter zip code to find banks close to you. Sort by geographic proximity or rate. Calculator to determine value: $ amt funded plus number of ATM visits per month. Choose based on your parameters. Online account opening provided by Andera (demo'd earlier).   

Big banks we are coming after you! 

Sparkroom 

B2B product. Help Financial Institutions that are big buyers of leads on the Internet to monitor their marketing investments. Track gross margin generated by source and by dimension. Eg. in Mortgage industry which states are most valuable, which dollar amounts are most successful. 

Use dashboards to measure 4-5 key metrics each day. For example leads by source (LendingTree, LowerMyBills, Bills.com, NexTag. etc.) - measures leads, number closed, and cost per closed loan. Determine ROI. 

Understand what is working and what is not. Stop activities that aren't delivering. 

120% ROI increase on marketing spin (on average across customer base) 

Scalable to eery FI product. Built out Mortgage vertical first. 

TradeKing 

Innovated online options and stock brokerage for cutting edge options and equity traders. Pioneering social community in brokerage industry. First to allow traders to share their actual trades. Naturally network around investments, remove barriers between clients and traders - wall street meets main street. 

Do not sell data or advertising. Just share data among the community members. 

Trade notes, blogs, forums, and trading activity. See trades, trade notes provided by trader, portfolio if he shares, blog if he has one, and whether or not TradeKing knows who the investor is. 

Provides expert advice and education based on trading. 

Forums are monitored for compliance reasons. Therefore trusted environment to interact safely and securely. 

ClairMail 

Mobile banking infrastructure at 5 of top 10 banks today, moving down market to community banks. two way triple pay - rec'd bill via SMS, send text message to determine balance, open mobile web browser, send text to server to request dynamic link to website. Simply enter pw rather than username and pw. Initiate transfer from one account to another. Return to SMS and pay bill by replying with "Y" 

Single registration. Onboard at ATM. wbe, IVR, 

Open platform. SMS works on all phones. Mobile web works on many phones. Also native mobile application (in this case mfoundry). Works in retail, works in treasury, too. 

Facilitate ability for bank to ask consumer questions. Allow consumer to initiate 

Mobile lockbox. 

SMS offers "you have a $25 credit on your credit card account if you visit Home Depot this weekend." Generating new value rather than having bank pay for rewards, rather than get paid for offering rewards. 

Not dependent on back-end systems to engage with customers. 

Vestopia 

Service, platform that connects self-directed investors to wall street pros. See what they are doing in their personal investment accounts with real money, real time. Two constituencies: 1) wall street pros, and 2) self-directed investors. 

Grown member base ten fold since January. Venture backed. 

Free enrollment. Public beta is free, so feel free to check it out. 

Investment pros - recruited like an asset manager or hedge fund would. Lots of inbound inquiries, review track records, conduct in person interviews. select investment directors for community. Individuals are not investing anonymously - have name, photo, brief strategy snap shot, performance, 

IF you are interested you can connect to investment directors. 

Look at my dashboard - view investment directors you follow (are connected to) and benchmark against appropriate indices. View holdings (by sector) and can view individual holdings (in detail). 

Entertain questions from community members. 

Okay, off to the exhibit hall to talk to the startups and hopefully find a snack. 

More coverage: 

• Intro 
• Morning Session 
• Best of Show 
• Observations & Trends [coming soon]

Amazon Launches TextBuyIt

Browsing at Best Buy and suspect there is a better deal at Amazon.com? Now savvy consumers can comparison shop and order Amazon.com products from their cell phone via text message. Of course it's handy when you are simply out and about, or more likely in my case, reading the Sunday New York Times book review in a cafe and want to buy a book.

[graphic from Amazon]

Learn more:

• Amazon TextBuyIt

Obopay Targets Small Businesses

Obopay recently announced that "customers can now use their existing bank accounts to send and receive money via their mobile phone. With Obopay's mobile money transfer, non- customers can pick up payments without signing up for Obopay. These innovations make it easier than ever for any bank customer to conveniently send and receive payments from their mobile phones."

Obopay is targeting small businesses as well as consumers: "In addition to the obvious appeal to parents (with kids away at school), friends (who split dinner, activity or utility bills) and family (who send money to loved ones far away), Obopay gives small business owners the tools to pay employees, vendors or service providers immediately and conveniently." Obopay charges 10 cents per transaction for these transactions.

Obopay markets to merchants as well, pricing their services at a competitive 1.5% + 25 cents per transaction.

Learn more at the Obopay website.

NACHA & Mobile Banking

NACHA is joining the mobile banking bandwagon. The ACH organization has formed a Mobile Banking Work Group under the leadership of its Internet Council. The goal is to develop an ACH payment platform strategy for mobile banking.

The Mobile Banking Work Group leadership will focus on four primary objectives in the initial phase of this project:

• Assess the NACHA Operating Rules for the accommodation of mobile banking and payments;
• Identify authorization and authentication considerations;
• Identify unique security characteristics and requirements;
• Assess systemic opportunities and barriers in the ACH Network.

For information about participating in NACHA’s Mobile Banking Work Group visit the NACHA Internet Council website.

Press Release

Mobile Payment - An Insightful Discussion of the Business Case

This week David Birch posted an insightful commentary on the business case for mobile payment (as opposed to mobile banking). His discussion was in part a response to a study by Deloitte and partially prompted by new mobile payment projects recently announced by two large UK banks.

A brief extract (you should read the whole post)

The answer depends on the question (if you see what I mean). Deloitte are posing a particular question: given that the business model remains the same as it has been for decades, what is the ROI on this particular payment technology? Answer: not that great. Other people are asking an innovation question: given the possibilities opened up by the new technology, what new business models will emerge? Answer: no-one knows, but for a relatively small expenditure it is worth it for banks not to take the chance of getting outflanked and gain the opportunity to (as Deloittes note inside their report) to explore new value-creating opportunities around the payment itself.

Another good resource on this topic is this is a January 2007 Edgar Dunn eInsight newsletter that breaks down mobile financial services, identifying key features and the various stakeholders and outlines key success factors.

David Birch's 12/04 Post

Reversing the Charges: Could mobile payment at the point of sale ever pay for itself?
Deloitte UK

Mobile Financial Services: Unlocking the Potential
Edgar Dunn Insight eLetter
January 2007
(free registration required)

Latest Mobile Payment Projections (from Jupiter)

New forecasts from Juniper Research show that around 52 million consumers will adopt new mobile technologies such as NFC (Near Field Communication) and other physical mobile payment methods to pay for everyday goods and services by 2011. This will help drive the physical mobile payments market to $11.5bn by the same year.

Other findings from the report include:

• Mobile payment applications and services are already available in most regions in a variety of formats where they are being adopted in either a trial or commercial mode with favourable user feedback.
• Industry players (including retailers, handset vendors and the financial community) in the Far East and the US are seen as particularly receptive to the idea of using RFID or NFC to facilitate mobile payments for physical goods and services.
• Members of the mobile payments value chain must develop a mutually satisfactory, robust business model, guaranteeing revenue to all parties

Learn more:

Mobile Payments: Strategies & Markets 2007-2011
Jupiter Research

Google's Phone Ambitions

An article in today's New York Times explores Google's motivations for developing open source mobile phone software (not necessarily developing a phone, a la Apple, but rather going head to head with Windows Mobile). Obviously, as with Google Checkout, the goal is to increase ad revenues. But what caught my eye, and is relevant to the payments industry, was the emphasis on "disaggregating" the mobile phone carriers.

Read more:

Business / Media & Advertising
For Google, Advertising and Phones Go Together
By MIGUEL HELFT
The New York Times
Published: October 8, 2007

Live Coverage of Finovate 2007

My plans changed and I couldn't make it to NYC this week, but I am following the live blog coverage from Finovate 2007. You can, too:

William Azaroff
NetBanker 2.0 / Part 2

Brandon McGee
Mobile Banking

Mobile Banking: Where's the Business Case?

In the latest issue of BAI's Banking Strategies Karen Epper Hoffman explores whether or not there is a viable business case (from banker's perspective) in developing mobile banking capabilities.

At mid-2007, at least nine U.S. banks had begun to develop or had rolled out a mobile banking service to their customers, either through a proprietary mobile Internet banking site or via an application embedded into the handset. Proponents believe cell phone banking will grow quickly based on ubiquitous cell phone usage and consumers' growing expectation of anywhere/anytime access. Yet, with banks providing the service to customers for free and carriers clamoring for a piece of the action, a business case remains elusive. Banks say they will justify the investment based on strengthening customer relationships, lowering delivery channel costs and paving the way for more sophisticated mobile financial services in future years.

With very few actual consumers using mobile banking, it's too early to tell how things will play out. I'm an early adopter (my bank, Wells Fargo, offers access to both my personal and small business accounts) and I'm already hooked on the ability to check balances and make transfers from anywhere.

According to the article, these are the key components of the cost-benefit equation:

BENEFITS

• Building stickier relationships with customers (just as investments in online banking are justified)
  
• Lower usage of more costly channels, such as the branch and call center
  
• More advanced tasks, such as making expedited payments or remittances, for which the banks can then collect incremental revenues
  
• Competitive reasons (similar to online banking, mobile access will become "table stakes" to compete effectively)

COSTS

• Per transaction or per user fees paid to mobile carriers (telcos)

• Intermediary companies, bridging the gap between banks and the various handset/carriers, that must be compensated for their investment
  
• Internal bank investment in the development of a new channel

CHALLENGES

• Lack of standards across devices and software platforms

• Security

Read more:

Mobile Banking: Where's the Business Case?
by Karen Epper Hoffman
BAI Banking Strategies
September/October 2007

Thumbnail Mobile Banking Strategy from Glenbrook

Scott Loftesness, the go-to source for payments news, just posted an article titled Glenbrook's Thumbnail Mobile Banking Strategy on the Glenbrook website.

He's setting aside mobile payments - "a whole separate kettle of fish" - and, as promised, delivers concise, actionable advice for those financial institutions still sitting on the proverbial fence.

Excerpt:

• ... just get moving now on developing a CSS style sheet to front end your existing online banking system and provide a slimmed down yet elegant web interface to your bank.
  
  
• If your bank has a focus on attracting the younger demographic, you may also want to consider adding SMS-based text messaging as an interface to your existing IVR platform.

Read the whole article - it's short!

Glenbrook's Thumbnail Mobile Banking Strategy
by Scott Loftesness
Glenbrook
September 20, 2007

American Banker on Emerging Technologies

Amid all the market enthusiasm yesterday, you may have missed that American Banker published a special report on emerging technologies featuring an article on mobile banking, a case study on authentication, an online banking roundtable, and commentary on contactless payments.

Check it out here.

Contrarian view: mobile payments and contactless cards will languish until chips proliferate

The August edition of Bank Technology News quotes Javelin Research's James Van Dyke on mobile and contactless payments. His view is that contactless cards and instore mobile payments will be held back until chips are embedded in mobile devices, counter to the prevailing industry thought that contactless is a payment method in and of itself (albeit a transitional one).

Javelin Research's president and founder James Van Dyke says both contactless cards and mobile payments initiatives will languish until chips are embedded in mobile devices.

If Van Dyke is right that means is that institutions planning to make heavy bets on contactless cards need to view them as a landmark on the road to a world where mobile devices replace wallets altogether.

"What we're saying is contactless payments are at best a interesting stop over point, but the only significance is it prepares us for mobile payments," he says.

Read more:

Payments: For Time Being, Mobile Payments are Grounded
Bank Technology News
August 2007

News from SourceMedia's Mobile Commerce Summit

Jim Breune of Mobile Money and Banking posted a good write up of the inaugural Mobile Commerce Summit.

Major themes:

• Mobile banking has arrived
  
• Mobile payments, at least in the U.S., are some years away; widespread adoption needs a critical mass of contactless terminals
  
• Short-term, mobile banking will be delivered through a mix of text messaging, WAP sites, and downloadable applications. Each has its own pros and cons, but ultimately the consumer will vote with their wallets. On stage anyway, the vendors of the various different models were extremely conciliatory, complementing other models and providers.
  
• Security of the mobile channel is generally much better than online (at least in the days before multi-factor authentication)
  
• The U.S. wireless carriers were generally portrayed as hindering developments, although Spencer White of AT&T did an admirable job of defending the carrier's position.

Read the whole post here.

Wells Fargo Offers Mobile Banking for Business Customers

As anticipated (after Steve Ellis' not so subtle hints at the NACHA Payments conference last month), Wells Fargo has announced mobile banking service for business customers. This is a first in the industry as all other mobile efforts have been targeted at consumers. And from my perspective, it is a wise move on Wells' part, as business customers are more likely to tolerate a fee for mobile access than their consumer counterparts.

Wells Fargo press release:

Wells Fargo & Company (NYSE:WFC) has introduced its CEO Mobile (SM) service to a select group of customers, becoming the first major U.S. financial services company to offer mobile service for businesses.

The initial version of the CEO Mobile service, made available to a small number of business customers on April 30, delivers key treasury reports through a secure browser session. Functions that Wells Fargo plans to add later this year include wire approvals, image positive pay exceptions, and administrative tools such as password resets.

"Mobile service makes executing financial transactions more convenient and flexible for our business customers," said Megan Minich, who leads the Mobile Technologies team for Wells Fargo's Wholesale Internet and Treasury Solutions. "With each new step, we'll gather customer feedback and refine our interface to ensure it's usable, streamlined and simple."

Wells Fargo has extended the same strong security features to its CEO Mobile service that it employs for its Commercial Electronic Office® (CEO®) portal, including:

    * Authenticating users with the same credentials they use on the CEO portal,
    * Protecting data with 128-bit Secure Socket Layer (SSL) encryption, and
    * Enforcing session time-out rules.

We want to be where our customers want us to be-at the office, in meetings, out of town, wherever-and provide information when they need it so they can act on it," said Steve Ellis, head of Wells Fargo's Wholesale Services Group. "Our business customers need to make decisions instantly, instead of waiting to get back to the office or calling someone to complete a crucial transaction."

Wells Fargo's pioneering effort in mobile banking for business customers is the latest milestone in the company's history as technology trailblazer. In 1995, Wells Fargo became the first financial institution to introduce access to banking accounts on the Internet. In 2000, the company launched the Commercial Electronic Office portal, the first financial services portal for mid-sized companies and large corporations.

Will Consumers Prefer Mobile Banking over Online Banking?

WirelessWeek, the mobile industry publication, explores mobile banking this week. The article summarizes recent research and efforts underway by major banks and carriers - most of which we've already covered here at FORTEblog, see mobile posts archived here - but one nugget at the bottom of the article that caught my eye:

One of ClairMail’s bank customers has done a study on the ROI of using mobile banking, which showed a payback in less than three months, Thompson says. He says the bank’s customers even preferred using their phones over their PCs for banking. If that’s true, the future of mobile banking looks solid.

Read the whole article:

Banks Go Mobile
By Brad Smith
WirelessWeek
May 01, 2007