By Glenn Wheeler, president, Viewpointe Clearing, Settlement & Association Services
The payments landscape has been transforming. Jockeying for position are some major non-banking players – social networking sites, peer-to-peer payment services, mobile phone providers and credit card companies. As the competition heats up, the time horizon for establishing supremacy in the market will get shorter and shorter.
Some believe that banks, long the dominant facilitator of payments, will have problems reacting and adapting to this new paradigm. Certainly the evolving payments market presents new challenges for banks, but the situation might not be as dire as some have predicted.
There is no question customers are demanding convenience. According to a recent Bank Systems & Technology article, “Mobile Payment Users Expected to Surpass 375 Million by 2015,” market research firm In-Stat predicts that the number of mobile payment users globally will triple by 2015. Where will this demand be met? Well, there are a multitude of channels for customers to gain access to mobile payments; many do not require a financial institution. Consumers have many options: there is “virtual currency” offered by social networking mobile apps such as Facebook, "tap and pay" apps via smartphone using near-field communication (NFC) offered by Google and telecom providers, and mobile peer-to-peer services from PayPal, among others. Undoubtedly, there are additional mobile payment channels being innovated as I type this.
Banks are keenly aware of the risk mobile payments pose to a key part of their business. However, it is the security component of mobile payments that deserves a second look. Security is a differentiator and one in which non-bank providers may have a hard time competing with the banks. By developing capabilities for payment transactions that bypass financial institutions, thereby circumventing the advanced systems that help secure and oversee transactions, consumers could be at risk. Naive consumers might falsely believe that they have the same type of security and protection that they do with their bank. From an individual concern, payment data could wend its way without needed security and structure.
Certainly the mobile payment market is fascinating to watch. Who would have imagined 20 years ago that your wallet could very well be replaced by a mobile phone?
But will this technology disrupt or energize banks? While mobile payments pose some challenges, I believe banks will rise to the occasion, and many already have. Billions of dollars have been spent securing the existing payment ecosystem and new entrants have to play by the same rules. This is one area where banks clearly have a leg up, and are well-prepared for the challenges ahead. Banks, mobile payment providers and consumers should keep this in mind.
What do you think?
Showing posts with label online banking. Show all posts
Showing posts with label online banking. Show all posts
Tuesday, June 14, 2011
Thursday, June 9, 2011
Top trends in retail online banking
Posted by Mark Brousseau
Bank customers have started to demand that their banks’ online offerings keep up with the times, according to new research from Celent, LLC. And for good reason: the online banking space has stagnated for far too long, the research and advisory firm contends.
The evolution of the Internet has provided consumers with rich and interactive experiences online. Unfortunately, the banking industry has not kept pace with the evolution of the Internet, and customers have started to demand that their banks keep up with the times. For the most part, financial institutions recognize their online shortcomings.
Celent says the question is: Why haven’t they acted on them, what can they do about it, and how can they keep up with ever-increasing customer demands? These questions become even more difficult to answer because financial institutions have just started to emerge from the impact of the financial crisis and are under extreme pressure to run sustainable businesses in the wake of increased regulatory pressures.
The good news is that next-generation online banking is on its way, according to Celent research. Some of these are in full swing; others are just emerging or expected to impact the space within the next three to five years.
"Online banking isn’t an alternative channel any more. It’s a mainstream channel," says Jacob Jegher, senior analyst with Celent’s Banking group. "This channel, however, requires a lot of attention. If banks don’t act swiftly, they risk critical customer relationships and revenue. It’s important that banks harness technology but don’t use it as their best foot forward."
What do you think?
Bank customers have started to demand that their banks’ online offerings keep up with the times, according to new research from Celent, LLC. And for good reason: the online banking space has stagnated for far too long, the research and advisory firm contends.
The evolution of the Internet has provided consumers with rich and interactive experiences online. Unfortunately, the banking industry has not kept pace with the evolution of the Internet, and customers have started to demand that their banks keep up with the times. For the most part, financial institutions recognize their online shortcomings.
Celent says the question is: Why haven’t they acted on them, what can they do about it, and how can they keep up with ever-increasing customer demands? These questions become even more difficult to answer because financial institutions have just started to emerge from the impact of the financial crisis and are under extreme pressure to run sustainable businesses in the wake of increased regulatory pressures.
The good news is that next-generation online banking is on its way, according to Celent research. Some of these are in full swing; others are just emerging or expected to impact the space within the next three to five years.
"Online banking isn’t an alternative channel any more. It’s a mainstream channel," says Jacob Jegher, senior analyst with Celent’s Banking group. "This channel, however, requires a lot of attention. If banks don’t act swiftly, they risk critical customer relationships and revenue. It’s important that banks harness technology but don’t use it as their best foot forward."
What do you think?
Tuesday, November 23, 2010
Network Security Facing Dual Challenge
By Dan Joe Barry, Napatech
Network security systems are under pressure. You might not be experiencing it yet, but you will soon. The dual challenge of dealing with more attacks at higher speeds threatens to undermine the stability of the most important commercial platforms of the 21st century; namely the Internet.
What can be done to address these challenges and avert the economic impact of an Internet collapse?
For many, the Internet is synonymous with web browsing, email and chat. But, the Internet and, IP-based networks in general, are now the foundation for a host of commercial services with significant impact on our daily lives.
On-line shopping is familiar to many, as is net-banking, but the financial world has now become reliant on the Internet for executing banking and investment transactions, sometimes thousands per second. Government services have also moved on-line. The Internet is used extensively in education and healthcare to provide distance services and expert consultation. The advent of cloud computing means that corporations will be more reliant than ever on the Internet to support their business.
In short, without the Internet, our lives would come to a grinding halt.
The development of the Internet as a commercial platform has not gone un-noticed by criminal organizations, which are exceptionally innovative in finding new ways of generating revenue! They have displaced the amateur hacker enthusiasts as the key threat to the Internet.
The open and global advantages of the Internet are now suddenly disadvantages as cybercriminals can attack from any location in the world, beyond the reach of domestic law enforcement agencies.
To understand the scope of the network security challenge, consider figures from Trend Micro, a leading provider of network security solutions, who have reported an explosive growth in the number of unique malware samples (i.e. types of attack) over the last 20 years.
Network security system vendors are struggling to respond to these new attacks as quickly as they occur. In a sense, they are playing a cat-and-mouse game with adversaries who are at least as intelligent and innovative at exploiting weaknesses in networks and applications, as they are at detecting attacks.
Higher data rates compound the challenge facing network security system vendors. IP networks are now being upgraded from 1 Gbps to 10 Gbps link speeds with 40 Gbps and 100 Gbps on the horizon. At 1 Gbps, a network security system needs to analyze up to 1.5 million packets per second. At 10 Gbps, this becomes 15 million packets per second. This is per port and only in 1 direction.
The challenge for network security system vendors is to ensure that their systems:
• Can handle up to 15 million packets per second per port in each direction
• Have the necessary processing power and memory to analyze packets in real-time
• Can scale to detect millions of new malware samples and higher line rates
The traditional approach to building network security systems is to build customized hardware including ASIC chip development. However, with the exponential growth in malware and higher line-rates, network security systems need to scale in both terms of data handling and computing power on a regular basis. This in turn means that the lifetime of a product revision will be shorter.
This begs the question: can network security system vendors keep up and have they got the deep pockets required to fund custom hardware and chip development on a regular basis?
It also leads to the question: is there another way?
High-performance network security systems can be based on standard, off-the-shelf PC servers when these are combined with Intelligent Real-time Network Analysis adapters for handling full line-rate data.The advantage of this approach is that it takes advantage of the strong roadmap of PC server and CPU chip vendors who are updating their performance and the number of processing cores they support on a yearly basis.
Basing high-performance network security system development on standard PC servers with Intelligent Real-time Network Analysis adapters provides a path to addressing the dual challenge of more malware at higher line-rates. It provides a cost-efficient, yet high-performance model that allows network security system vendors to focus on their expertise, namely combating cybercriminals and protecting the vital commercial platform that the Internet has become.
What do you think?
Network security systems are under pressure. You might not be experiencing it yet, but you will soon. The dual challenge of dealing with more attacks at higher speeds threatens to undermine the stability of the most important commercial platforms of the 21st century; namely the Internet.
What can be done to address these challenges and avert the economic impact of an Internet collapse?
For many, the Internet is synonymous with web browsing, email and chat. But, the Internet and, IP-based networks in general, are now the foundation for a host of commercial services with significant impact on our daily lives.
On-line shopping is familiar to many, as is net-banking, but the financial world has now become reliant on the Internet for executing banking and investment transactions, sometimes thousands per second. Government services have also moved on-line. The Internet is used extensively in education and healthcare to provide distance services and expert consultation. The advent of cloud computing means that corporations will be more reliant than ever on the Internet to support their business.
In short, without the Internet, our lives would come to a grinding halt.
The development of the Internet as a commercial platform has not gone un-noticed by criminal organizations, which are exceptionally innovative in finding new ways of generating revenue! They have displaced the amateur hacker enthusiasts as the key threat to the Internet.
The open and global advantages of the Internet are now suddenly disadvantages as cybercriminals can attack from any location in the world, beyond the reach of domestic law enforcement agencies.
To understand the scope of the network security challenge, consider figures from Trend Micro, a leading provider of network security solutions, who have reported an explosive growth in the number of unique malware samples (i.e. types of attack) over the last 20 years.
Network security system vendors are struggling to respond to these new attacks as quickly as they occur. In a sense, they are playing a cat-and-mouse game with adversaries who are at least as intelligent and innovative at exploiting weaknesses in networks and applications, as they are at detecting attacks.
Higher data rates compound the challenge facing network security system vendors. IP networks are now being upgraded from 1 Gbps to 10 Gbps link speeds with 40 Gbps and 100 Gbps on the horizon. At 1 Gbps, a network security system needs to analyze up to 1.5 million packets per second. At 10 Gbps, this becomes 15 million packets per second. This is per port and only in 1 direction.
The challenge for network security system vendors is to ensure that their systems:
• Can handle up to 15 million packets per second per port in each direction
• Have the necessary processing power and memory to analyze packets in real-time
• Can scale to detect millions of new malware samples and higher line rates
The traditional approach to building network security systems is to build customized hardware including ASIC chip development. However, with the exponential growth in malware and higher line-rates, network security systems need to scale in both terms of data handling and computing power on a regular basis. This in turn means that the lifetime of a product revision will be shorter.
This begs the question: can network security system vendors keep up and have they got the deep pockets required to fund custom hardware and chip development on a regular basis?
It also leads to the question: is there another way?
High-performance network security systems can be based on standard, off-the-shelf PC servers when these are combined with Intelligent Real-time Network Analysis adapters for handling full line-rate data.The advantage of this approach is that it takes advantage of the strong roadmap of PC server and CPU chip vendors who are updating their performance and the number of processing cores they support on a yearly basis.
Basing high-performance network security system development on standard PC servers with Intelligent Real-time Network Analysis adapters provides a path to addressing the dual challenge of more malware at higher line-rates. It provides a cost-efficient, yet high-performance model that allows network security system vendors to focus on their expertise, namely combating cybercriminals and protecting the vital commercial platform that the Internet has become.
What do you think?
Monday, November 22, 2010
Congress Should Amend COICA
Last week, the U.S. Senate Judiciary Committee unanimously voted to approve the "Combating Online Infringements and Counterfeits Act" (COICA). The bill would allow the U.S. Attorney General to obtain a court order disabling web domains deemed to be “dedicated to infringing activities.”
Intellectual property scholars at the Competitive Enterprise Institute praised the bill in principle but warned that the legislation's current provisions threaten free speech and lack crucial safeguards to protect against the unwarranted suspension of Internet domain names.
“Combating piracy and counterfeiting on the Internet should be a priority for Congress, but care should be taken to ensure that legislative attempts to protect intellectual property rights do not harm other vital interests,” said Ryan Radia, CEI Associate Director of Technology Studies. “COICA’s overbroad definition of Internet sites 'dedicated to infringing activities' risks ensnaring legitimate websites. The bill also lacks a provision ensuring that Internet site operators targeted by the Attorney General have an opportunity to defend their site in an adversary judicial proceeding."
Over three dozen law professors recently submitted a letter to the U.S. Senate raising concerns about COICA, arguing that the bill suffers from “egregious Constitutional infirmities.”
“In its current form, elements of COICA raise serious First Amendment concerns,” said Hans Bader, CEI Senior Attorney. “If enacted, the law will not likely survive a constitutional challenge.”
Radia argued that Congress should amend COICA to provide for more robust safeguards, including:
• Providing a meaningful opportunity for Internet site operators to challenge before a federal court an Attorney General’s assertion that their site is “dedicated to infringing activities” prior to the domain name's suspension;
• Requiring that the Attorney General, prior to commencing an in rem action against a domain name, make a reasonable attempt to notify the site’s actual operator;
• Clarifying the definition of an Internet site “dedicated to infringing activities” to ensure that Internet sites with cultural, artistic, political, scientific, or commercial value that facilitate infringing acts by third parties do not face domain name suspension if their operators comply with legitimate takedown requests;
• Instructing the Department of Justice and federal prosecutors not to request that domain name registrars, registries, or service providers suspend domain names that have not been deemed to be “dedicated to infringing activities” by a federal court;
• Requiring the Department of Justice to compensate domain name registrars, registries, and service providers for any reasonable costs they incur in the course of disabling infringing domain names.
What do you think?
Intellectual property scholars at the Competitive Enterprise Institute praised the bill in principle but warned that the legislation's current provisions threaten free speech and lack crucial safeguards to protect against the unwarranted suspension of Internet domain names.
“Combating piracy and counterfeiting on the Internet should be a priority for Congress, but care should be taken to ensure that legislative attempts to protect intellectual property rights do not harm other vital interests,” said Ryan Radia, CEI Associate Director of Technology Studies. “COICA’s overbroad definition of Internet sites 'dedicated to infringing activities' risks ensnaring legitimate websites. The bill also lacks a provision ensuring that Internet site operators targeted by the Attorney General have an opportunity to defend their site in an adversary judicial proceeding."
Over three dozen law professors recently submitted a letter to the U.S. Senate raising concerns about COICA, arguing that the bill suffers from “egregious Constitutional infirmities.”
“In its current form, elements of COICA raise serious First Amendment concerns,” said Hans Bader, CEI Senior Attorney. “If enacted, the law will not likely survive a constitutional challenge.”
Radia argued that Congress should amend COICA to provide for more robust safeguards, including:
• Providing a meaningful opportunity for Internet site operators to challenge before a federal court an Attorney General’s assertion that their site is “dedicated to infringing activities” prior to the domain name's suspension;
• Requiring that the Attorney General, prior to commencing an in rem action against a domain name, make a reasonable attempt to notify the site’s actual operator;
• Clarifying the definition of an Internet site “dedicated to infringing activities” to ensure that Internet sites with cultural, artistic, political, scientific, or commercial value that facilitate infringing acts by third parties do not face domain name suspension if their operators comply with legitimate takedown requests;
• Instructing the Department of Justice and federal prosecutors not to request that domain name registrars, registries, or service providers suspend domain names that have not been deemed to be “dedicated to infringing activities” by a federal court;
• Requiring the Department of Justice to compensate domain name registrars, registries, and service providers for any reasonable costs they incur in the course of disabling infringing domain names.
What do you think?
Tuesday, May 4, 2010
Group says legislation threatens electronic commerce
Posted by Mark Brousseau
Reps. Rick Boucher (D-VA) and Cliff Stearns (R-Fla.) today unveiled draft legislation aimed at improving online privacy that would impose new rules on companies that collect individual data on the Internet. But technology analysts at the Competitive Enterprise Institute warned that the proposed bill would actually harm consumers and hinder the evolution of online commerce.
“Substituting federal regulations for competitive outcomes in the online privacy arena interferes with evolution of the very kind of authentication and anonymity technologies we urgently need as the digital era evolves,” argues Wayne Crews, vice president for Policy.
“Today, businesses increasingly compete in the development of technologies that enhance our privacy and security, even as we share information that helps them sell us the things we want. This seeming tension between the goals of sharing information and keeping it private is not a contradiction -- it’s the natural outgrowth of the fact that privacy is a complex relationship, not a ‘thing’ for governments to specify for anyone beforehand,” Crews states.
“This legislation flips the proper definition of privacy on its head, wrongly presuming that individuals deserve a fundamental right to control information they’ve voluntarily disclosed to others online. But in the digital world, information collection and retention is the norm, not the exception. Privacy rights, where they exist, arise from voluntary privacy policies. The proper role of government is to enforce these policies, not dictate them in advance,” argues Ryan Radia, associate director of Technology Studies.
“If Rep. Boucher wants to strengthen consumer privacy online, he should turn his focus to constraining government data collection, which poses a far greater privacy threat than private sector data collection. A good starting point would be reexamining the Electronic Communications Privacy Act, the outdated 1986 law that governs governmental access to private communications stored online. Strengthening these privacy safeguards, as a broad coalition of companies and activist groups are now urging, will empower firms to offer stronger privacy assurances to concerned users,” Radia states.
What do you think?
Reps. Rick Boucher (D-VA) and Cliff Stearns (R-Fla.) today unveiled draft legislation aimed at improving online privacy that would impose new rules on companies that collect individual data on the Internet. But technology analysts at the Competitive Enterprise Institute warned that the proposed bill would actually harm consumers and hinder the evolution of online commerce.
“Substituting federal regulations for competitive outcomes in the online privacy arena interferes with evolution of the very kind of authentication and anonymity technologies we urgently need as the digital era evolves,” argues Wayne Crews, vice president for Policy.
“Today, businesses increasingly compete in the development of technologies that enhance our privacy and security, even as we share information that helps them sell us the things we want. This seeming tension between the goals of sharing information and keeping it private is not a contradiction -- it’s the natural outgrowth of the fact that privacy is a complex relationship, not a ‘thing’ for governments to specify for anyone beforehand,” Crews states.
“This legislation flips the proper definition of privacy on its head, wrongly presuming that individuals deserve a fundamental right to control information they’ve voluntarily disclosed to others online. But in the digital world, information collection and retention is the norm, not the exception. Privacy rights, where they exist, arise from voluntary privacy policies. The proper role of government is to enforce these policies, not dictate them in advance,” argues Ryan Radia, associate director of Technology Studies.
“If Rep. Boucher wants to strengthen consumer privacy online, he should turn his focus to constraining government data collection, which poses a far greater privacy threat than private sector data collection. A good starting point would be reexamining the Electronic Communications Privacy Act, the outdated 1986 law that governs governmental access to private communications stored online. Strengthening these privacy safeguards, as a broad coalition of companies and activist groups are now urging, will empower firms to offer stronger privacy assurances to concerned users,” Radia states.
What do you think?
Thursday, April 29, 2010
WEB payments up, unauthorized transactions down
Posted by Mark Brousseau
Companies experienced cost savings in 2009 as people switched to lower cost ACH bill payments and companies spent less time managing unauthorized debits.
WEB bill payments (ACH payments initiated at the billing company's website) grew 9.7% in 2009 vs. 2008 and unauthorized WEB debits decreased 13% down to 0.04%.
One utility company in Florida continued their strong growth in 2009. However, this utility company has not always grown their electronic payments at impressive rates. Looking back to 2004, the utility's electronic payment adoption rate was well below industry average. The utility company substantially increased their electronic payment options and integrated the entire payment process resulting in a tripling of their electronic payment adoption rate.
Source: NACHA, April 7, 2010
Companies experienced cost savings in 2009 as people switched to lower cost ACH bill payments and companies spent less time managing unauthorized debits.
WEB bill payments (ACH payments initiated at the billing company's website) grew 9.7% in 2009 vs. 2008 and unauthorized WEB debits decreased 13% down to 0.04%.
One utility company in Florida continued their strong growth in 2009. However, this utility company has not always grown their electronic payments at impressive rates. Looking back to 2004, the utility's electronic payment adoption rate was well below industry average. The utility company substantially increased their electronic payment options and integrated the entire payment process resulting in a tripling of their electronic payment adoption rate.
Source: NACHA, April 7, 2010
Monday, April 26, 2010
TAWPI @ NACHA Payments
Posted by Mark Brousseau
Consumers’ use of their Internet-capable mobile phones to access online banking and pay bills online climbed significantly over the past 12 months, according to new research released and jointly sponsored by FIS, NACHA, and eCom Advisors. This research was unveiled at a breakfast press conference this morning at NACHA’s PAYMENTS 2010 Conference at the Washington State Convention Center in Seattle.
“With expanding ownership of Internet-capable smartphones, consumers’ use of their mobile devices to access online banking information, view and pay bills, and make online purchases is becoming much more mainstream. We worked with NACHA and eCom Advisors on this research to better understand the pace of mobile banking adoption and the primary factors that are driving this consumer behavior,” stated Kay Nichols, executive vice president of channel solutions at FIS. FIS is a pioneer in delivering integrated mobile banking and payment solutions that provide end-customers with the convenience and immediacy in accessing their banking information.
The March 2010 survey, completed by 1,236 U.S. consumers who own and use mobile phones, was designed as a repeat of a similar consumer survey fielded by eCom Advisors in March 2009. The 2010 research found that 27 percent of consumers who own an Internet-capable mobile phone had used the device to access their financial institution’s online banking website within the past 30 days, compared to the 2009 result of 22 percent. In addition, 20 percent of consumers who own an Internet-capable mobile phone had used the device within the past 30 days to pay bills through a financial institution or a biller website, a significant increase from last year’s response of 11 percent.
In addition to adoption and use, the 2010 research foundthat consumers’ propensity to use mobile devices to conduct banking functions correlates more to the sophistication of the mobile device rather than the consumer’s age. The percentage of consumers who reported using their Internet-capable mobile phone to conduct online banking transactions within the past 30 days varied significantly by type of device owned:
… 65 percent of consumers who owned the newest touch screen smartphones (e.g., Apple iPhone, BlackBerry Storm, Motorola Droid, Google Nexus);
… 30 percent of consumers who owned other touch screen smartphones (e.g., Motorola Surf, Samsung Impression, LG Dare);
… 27 percent of consumers who owned non-touch screen smartphones with QWERTY keyboards (e.g., BlackBerry Curve, BlackBerry 8800 Series, Samsung Gravity, Palm Treo);
… 9 percent of consumers that owned of all other types of Internet-capable mobile phone models (e.g., Motorola RAZR, Verizon Escapade, Nokia 2680 Slide, Nokia 1680 Classic).
“Some smartphones are clearly smarter than others when it comes to inducing mobile banking and bill pay usage,” stated Fred Brothers, managing partner of eCom Advisors. “Regardless of the consumer’s age, those equipped with iPhones or the newest smartphones with full-sized touch screens are twice as likely to use them for mobile financial services as those who have smartphone devices with smaller screens or keyboards,” said Brothers.
The influence of mobile device sophistication was also apparent in consumers’ bill payment behaviors. The percentage of consumers who reported using their Internet-capable mobile phone to pay bills online through a financial institution or a biller websitewithin the past 30 days varied significantly by type of device owned:
… 40 percent of consumers who owned the newest touch screen smartphones (e.g., Apple iPhone, BlackBerry Storm, Motorola Droid, Google Nexus);
… 16 percent of consumers who owned other touch screen smartphones (e.g., Motorola Surf, Samsung Impression, LG Dare);
… 22 percent of consumers who owned non-touch screen smartphones with QWERTY keyboards (e.g., BlackBerry Curve, BlackBerry 8800 Series, Samsung Gravity, Palm Treo);
… 13 percent of consumers that owned of all other types of Internet-capable mobile phone models (e.g., Motorola RAZR, Verizon Escapade, Nokia 2680 Slide, Nokia 1680 Classic).
Consistent with a key finding from the 2009 research, the 2010 study revealed that while overall mobile bill-pay adoption is increasing, there is room for financial institutions to drive market growth. Of the 20 percent of consumers who reported using their mobile devices to pay bills online within the past 30 days, 62 percent stated they went directly to billers’ websites most often, while 38 percent reported that they went to their financial institution’s website most often.
“The results reiterate that the time is right for financial institutions to expand their online bill presentment, as well as bill payment, solutions,” stated Janet O. Estep, president and CEO, NACHA. “Introducing PC- and mobile-based products that make it easy for consumers to navigate the complete billing cycle is critical to ongoing adoption. Initiatives such as EBIDS, supported via by ACH Network, offer a way to efficiently deliver electronic bills of all kinds to a wide breadth of consumers via online banking.”
What do you think?
Consumers’ use of their Internet-capable mobile phones to access online banking and pay bills online climbed significantly over the past 12 months, according to new research released and jointly sponsored by FIS, NACHA, and eCom Advisors. This research was unveiled at a breakfast press conference this morning at NACHA’s PAYMENTS 2010 Conference at the Washington State Convention Center in Seattle.
“With expanding ownership of Internet-capable smartphones, consumers’ use of their mobile devices to access online banking information, view and pay bills, and make online purchases is becoming much more mainstream. We worked with NACHA and eCom Advisors on this research to better understand the pace of mobile banking adoption and the primary factors that are driving this consumer behavior,” stated Kay Nichols, executive vice president of channel solutions at FIS. FIS is a pioneer in delivering integrated mobile banking and payment solutions that provide end-customers with the convenience and immediacy in accessing their banking information.
The March 2010 survey, completed by 1,236 U.S. consumers who own and use mobile phones, was designed as a repeat of a similar consumer survey fielded by eCom Advisors in March 2009. The 2010 research found that 27 percent of consumers who own an Internet-capable mobile phone had used the device to access their financial institution’s online banking website within the past 30 days, compared to the 2009 result of 22 percent. In addition, 20 percent of consumers who own an Internet-capable mobile phone had used the device within the past 30 days to pay bills through a financial institution or a biller website, a significant increase from last year’s response of 11 percent.
In addition to adoption and use, the 2010 research foundthat consumers’ propensity to use mobile devices to conduct banking functions correlates more to the sophistication of the mobile device rather than the consumer’s age. The percentage of consumers who reported using their Internet-capable mobile phone to conduct online banking transactions within the past 30 days varied significantly by type of device owned:
… 65 percent of consumers who owned the newest touch screen smartphones (e.g., Apple iPhone, BlackBerry Storm, Motorola Droid, Google Nexus);
… 30 percent of consumers who owned other touch screen smartphones (e.g., Motorola Surf, Samsung Impression, LG Dare);
… 27 percent of consumers who owned non-touch screen smartphones with QWERTY keyboards (e.g., BlackBerry Curve, BlackBerry 8800 Series, Samsung Gravity, Palm Treo);
… 9 percent of consumers that owned of all other types of Internet-capable mobile phone models (e.g., Motorola RAZR, Verizon Escapade, Nokia 2680 Slide, Nokia 1680 Classic).
“Some smartphones are clearly smarter than others when it comes to inducing mobile banking and bill pay usage,” stated Fred Brothers, managing partner of eCom Advisors. “Regardless of the consumer’s age, those equipped with iPhones or the newest smartphones with full-sized touch screens are twice as likely to use them for mobile financial services as those who have smartphone devices with smaller screens or keyboards,” said Brothers.
The influence of mobile device sophistication was also apparent in consumers’ bill payment behaviors. The percentage of consumers who reported using their Internet-capable mobile phone to pay bills online through a financial institution or a biller websitewithin the past 30 days varied significantly by type of device owned:
… 40 percent of consumers who owned the newest touch screen smartphones (e.g., Apple iPhone, BlackBerry Storm, Motorola Droid, Google Nexus);
… 16 percent of consumers who owned other touch screen smartphones (e.g., Motorola Surf, Samsung Impression, LG Dare);
… 22 percent of consumers who owned non-touch screen smartphones with QWERTY keyboards (e.g., BlackBerry Curve, BlackBerry 8800 Series, Samsung Gravity, Palm Treo);
… 13 percent of consumers that owned of all other types of Internet-capable mobile phone models (e.g., Motorola RAZR, Verizon Escapade, Nokia 2680 Slide, Nokia 1680 Classic).
Consistent with a key finding from the 2009 research, the 2010 study revealed that while overall mobile bill-pay adoption is increasing, there is room for financial institutions to drive market growth. Of the 20 percent of consumers who reported using their mobile devices to pay bills online within the past 30 days, 62 percent stated they went directly to billers’ websites most often, while 38 percent reported that they went to their financial institution’s website most often.
“The results reiterate that the time is right for financial institutions to expand their online bill presentment, as well as bill payment, solutions,” stated Janet O. Estep, president and CEO, NACHA. “Introducing PC- and mobile-based products that make it easy for consumers to navigate the complete billing cycle is critical to ongoing adoption. Initiatives such as EBIDS, supported via by ACH Network, offer a way to efficiently deliver electronic bills of all kinds to a wide breadth of consumers via online banking.”
What do you think?
TAWPI @ NACHA Payments
Posted by Mark Brousseau
In 2010, Online Banking Solutions (OBS) predicts the following banking industry trends:
… Online banking and security will take center stage.
… Banks will begin to leverage additional delivery channels beyond the Web to create high-value solutions for their clients. This will begin with alerts and notifications, secure file transfers and the introduction of commercial mobile banking services.
… Companies will increase the number of file exchanges with banks in support of a full range of treasury services.
… Banks will begin to develop/acquire commercial entitlements and single sign-on (SSO) components to rationalize and improve the overall end-user experience.
What do you think?
In 2010, Online Banking Solutions (OBS) predicts the following banking industry trends:
… Online banking and security will take center stage.
… Banks will begin to leverage additional delivery channels beyond the Web to create high-value solutions for their clients. This will begin with alerts and notifications, secure file transfers and the introduction of commercial mobile banking services.
… Companies will increase the number of file exchanges with banks in support of a full range of treasury services.
… Banks will begin to develop/acquire commercial entitlements and single sign-on (SSO) components to rationalize and improve the overall end-user experience.
What do you think?
Tuesday, March 23, 2010
More Growth for Online Retail
Posted by Mark Brousseau
Despite entering a more mature phase in its evolution, online retail in both the United States and Western Europe remains poised for a robust period of double-digit growth over the next five years, according to two new forecasts by Forrester Research Inc.
U.S. online retail will grow at a 10 percent compound annual growth rate (CAGR) over the next five years to reach nearly $249 billion by 2014, Forrester predicts. Online retail within the largest European Union nations in Western Europe will grow at an 11 percent CAGR over the same period, hitting €114 billion by 2014.
"Much of the overall retail sector's growth in both the US and the EU over the next five years will come from the Internet," said Forrester Research Vice President and Principal Analyst Sucharita Mulpuru. "To maximize that growth, eBusiness professionals will have to help enable a multichannel strategy that responds to consumers' increased desire to hop between the offline and online worlds and their increasing mobile and social behaviors. The retail innovators over the next five years will demonstrate customer enablement across all touchpoints, not just via a PC-based Web browser."
Despite consumers' increasing use of the Web to research products before purchasing, most retailers fall short on offering a seamless cross-channel experience. According to Forrester's data, while 82 percent of US online consumers are satisfied with buying experiences that began and ended in a store, satisfaction drops to 61 percent for consumers who began their research online and purchased in a store.
The Forrester online retail forecasts for the US and the EU include business-to-consumer sales excluding auto, travel, and prescription drugs. The European Union forecast encompasses 17 Western European nations.
Highlights of the study include:
... In the United States, Web shopping will account for 8 percent of total retail sales by 2014.
...Three product categories dominate online retail: apparel, footwear, and accessories; consumer electronics; and consumer hardware, software, and peripherals. Together, those categories represent more than 40 percent of total online retail sales in the US.
... By 2014, 53 percent of total retail sales in the United States will be influenced by eCommerce as consumers increasingly use the Internet to research products before purchasing.
What do you think?
Despite entering a more mature phase in its evolution, online retail in both the United States and Western Europe remains poised for a robust period of double-digit growth over the next five years, according to two new forecasts by Forrester Research Inc.
U.S. online retail will grow at a 10 percent compound annual growth rate (CAGR) over the next five years to reach nearly $249 billion by 2014, Forrester predicts. Online retail within the largest European Union nations in Western Europe will grow at an 11 percent CAGR over the same period, hitting €114 billion by 2014.
"Much of the overall retail sector's growth in both the US and the EU over the next five years will come from the Internet," said Forrester Research Vice President and Principal Analyst Sucharita Mulpuru. "To maximize that growth, eBusiness professionals will have to help enable a multichannel strategy that responds to consumers' increased desire to hop between the offline and online worlds and their increasing mobile and social behaviors. The retail innovators over the next five years will demonstrate customer enablement across all touchpoints, not just via a PC-based Web browser."
Despite consumers' increasing use of the Web to research products before purchasing, most retailers fall short on offering a seamless cross-channel experience. According to Forrester's data, while 82 percent of US online consumers are satisfied with buying experiences that began and ended in a store, satisfaction drops to 61 percent for consumers who began their research online and purchased in a store.
The Forrester online retail forecasts for the US and the EU include business-to-consumer sales excluding auto, travel, and prescription drugs. The European Union forecast encompasses 17 Western European nations.
Highlights of the study include:
... In the United States, Web shopping will account for 8 percent of total retail sales by 2014.
...Three product categories dominate online retail: apparel, footwear, and accessories; consumer electronics; and consumer hardware, software, and peripherals. Together, those categories represent more than 40 percent of total online retail sales in the US.
... By 2014, 53 percent of total retail sales in the United States will be influenced by eCommerce as consumers increasingly use the Internet to research products before purchasing.
What do you think?
Thursday, October 1, 2009
Banks Target Gen Y
Posted by Mark Brousseau
After failing to develop strong relationships with older consumers, banks are now turning to Generation Y -- with its emerging demand for banking products -- as a source of growth in a weak economy. In addition, banks have an opportunity to start fresh and avoid the relationship sins they have committed in the past. Gen Yers' trust in banks is slipping, however. Only 14 percent of Gen Yers report that their trust in their primary bank has increased over the past year, while 22 percent say that their trust level has decreased over that time frame.
"Banks must avoid alienating Gen Yers as they did older consumers," says Ron Shevlin, senior analyst with Aite Group and author of this report. "Building strong banking relationships with Gen Yers involves getting them engaged with their financial lives and financial providers. Social networks and the online channel will be insufficient in accomplishing this. The tactics and strategies for winning Gen Yers' business must be cross-channel and even cross-family."
What do you think? Post your comments below.
After failing to develop strong relationships with older consumers, banks are now turning to Generation Y -- with its emerging demand for banking products -- as a source of growth in a weak economy. In addition, banks have an opportunity to start fresh and avoid the relationship sins they have committed in the past. Gen Yers' trust in banks is slipping, however. Only 14 percent of Gen Yers report that their trust in their primary bank has increased over the past year, while 22 percent say that their trust level has decreased over that time frame.
"Banks must avoid alienating Gen Yers as they did older consumers," says Ron Shevlin, senior analyst with Aite Group and author of this report. "Building strong banking relationships with Gen Yers involves getting them engaged with their financial lives and financial providers. Social networks and the online channel will be insufficient in accomplishing this. The tactics and strategies for winning Gen Yers' business must be cross-channel and even cross-family."
What do you think? Post your comments below.
Tuesday, September 8, 2009
What Banks Do Best
Posted by Mark Brousseau
Forty-two percent of treasurers responding to Treasury & Risk's 2009 Cash Management Survey say their bank's best attribute is providing online access to information. Ninety-six percent of treasurers who responded to the survey say they are satisfied with the online services provided by their primary domestic bank.
A whopping 90 percent of respondents to the survey handle more than half of their cash management operations online, the survey found. Interestingly, just 33 percent of treasurers say they use a treasury workstation -- meaning most treasurers are using the Internet for their cash management.
What do you think? Post your comment below.
Forty-two percent of treasurers responding to Treasury & Risk's 2009 Cash Management Survey say their bank's best attribute is providing online access to information. Ninety-six percent of treasurers who responded to the survey say they are satisfied with the online services provided by their primary domestic bank.
A whopping 90 percent of respondents to the survey handle more than half of their cash management operations online, the survey found. Interestingly, just 33 percent of treasurers say they use a treasury workstation -- meaning most treasurers are using the Internet for their cash management.
What do you think? Post your comment below.
Friday, May 29, 2009
Impact of the Economy on Online Banking Systems Purchasing Decisions
By Mark Brousseau
Today’s economy has presented challenges for banks to invest in new technologies, such as online banking solutions. However, for those banks that can, now is the time to do so, says Joe Spatarella, vice president, sales & marketing, Online Banking Solutions (OBS).
"With minimal activity and deal flow, this is an opportune time to move forward and negotiate an ideal vendor partnership to take you well into the future," Spatarella says.
Below are best practices that Spatarella offers for acquiring and deploying online banking solutions in a challenging and transforming economic climate. "With little or no margin for error, the following could help you win a greater share of customer revenue with a contemporary solution when others are afraid to move," he says.
1. Set your goals: Identify a solution that can differentiate the financial institution in a crowded market. Focus on improved user experience: semantics, navigation and ability to customize at the user level without expensive vendor modifications.
2. Walk a different path to success: Find a vendor that is truly willing to partner and share project risks rather than the 800 pound gorilla who is less likely to negotiate favorable terms or who makes promises that cannot be met.
3. Go with a fixed cost model: Annual license fees and fixed per user pricing is much easier to manage than variable transaction pricing.
4. Purchase in the present, not the future: While product roadmaps are important, be sure the vendor can deliver the product version you purchased at the time you need to deploy it
5. Share in project success: A vendor will be more likely to share the risk and contribute specialized resources if there is also an opportunity to benefit from project success.
6. Watch the clock: Give yourself enough time to make a decision and give the vendor a reasonable timeframe to deliver. Don’t use so much of the project timeline on evaluation that the vendor is left with a highly compressed window for implementation.
7. Minimize the frequency: The solution must be sustainable and scalable so that in 3 to 5 years, you are not looking for another vendor and having to repeat the process with valuable time and resources. Plan for continued success, not failure.
What do you think? Post your comments below.
Today’s economy has presented challenges for banks to invest in new technologies, such as online banking solutions. However, for those banks that can, now is the time to do so, says Joe Spatarella, vice president, sales & marketing, Online Banking Solutions (OBS).
"With minimal activity and deal flow, this is an opportune time to move forward and negotiate an ideal vendor partnership to take you well into the future," Spatarella says.
Below are best practices that Spatarella offers for acquiring and deploying online banking solutions in a challenging and transforming economic climate. "With little or no margin for error, the following could help you win a greater share of customer revenue with a contemporary solution when others are afraid to move," he says.
1. Set your goals: Identify a solution that can differentiate the financial institution in a crowded market. Focus on improved user experience: semantics, navigation and ability to customize at the user level without expensive vendor modifications.
2. Walk a different path to success: Find a vendor that is truly willing to partner and share project risks rather than the 800 pound gorilla who is less likely to negotiate favorable terms or who makes promises that cannot be met.
3. Go with a fixed cost model: Annual license fees and fixed per user pricing is much easier to manage than variable transaction pricing.
4. Purchase in the present, not the future: While product roadmaps are important, be sure the vendor can deliver the product version you purchased at the time you need to deploy it
5. Share in project success: A vendor will be more likely to share the risk and contribute specialized resources if there is also an opportunity to benefit from project success.
6. Watch the clock: Give yourself enough time to make a decision and give the vendor a reasonable timeframe to deliver. Don’t use so much of the project timeline on evaluation that the vendor is left with a highly compressed window for implementation.
7. Minimize the frequency: The solution must be sustainable and scalable so that in 3 to 5 years, you are not looking for another vendor and having to repeat the process with valuable time and resources. Plan for continued success, not failure.
What do you think? Post your comments below.
Saturday, March 14, 2009
Treasurers Moving to Electronic Banking
Posted by Mark Brousseau
An Aite Group, LLC study finds that many corporate treasurers are anticipating a move toward expanded use of electronic banking, with more than half of the treasurers surveyed saying they expect to see electronic payments expanded, and more than a third saying they expect to make greater use of online banking services.
A third also foresees a move to real-time balancing reporting.
What do you think? Post your comments below.
An Aite Group, LLC study finds that many corporate treasurers are anticipating a move toward expanded use of electronic banking, with more than half of the treasurers surveyed saying they expect to see electronic payments expanded, and more than a third saying they expect to make greater use of online banking services.
A third also foresees a move to real-time balancing reporting.
What do you think? Post your comments below.
Wednesday, September 3, 2008
More B2B Transactions Go Electronic
By Mark Brousseau
More signs that paper checks are losing their grip on business-to-business transactions. Some 56 percent of treasurers, CFOs and other senior finance executives say they use p-cards and see reducing administrative costs and time as top benefits, according to Treasury & Risk’s annual cash management survey. Meantime, 55 percent of respondents to the survey said they handled more than 80 percent of their business online.
What's happening at your organization?
Post your comments below.
More signs that paper checks are losing their grip on business-to-business transactions. Some 56 percent of treasurers, CFOs and other senior finance executives say they use p-cards and see reducing administrative costs and time as top benefits, according to Treasury & Risk’s annual cash management survey. Meantime, 55 percent of respondents to the survey said they handled more than 80 percent of their business online.
What's happening at your organization?
Post your comments below.
Tuesday, July 22, 2008
Cybercrooks Target Online Banking
Posted by Mark Brousseau
An interesting article from USA Today on the latest wave of cybercrime:
Russian cybercrooks target high bank balances online
By Byron Acohido, USA TODAY
Call them the Coreflood Gang. A ring of cyber bank robbers from southern Russia has quietly perfected a way to get a beachhead inside company networks.
Once inside, it infects every PC within reach with a custom-made data-stealing program called Coreflood. The goal: go rip off bank accounts online.
Over the past 16 months, the Coreflood Gang has infected swaths of PCs inside thousands of companies, hospitals, universities and government agencies, says SecureWorks researcher Joe Stewart, who has tracked and documented the spread of Coreflood over that period.
"It's spying on you, capturing your log-ons, user names, passwords, bank balances, contents of your e-mail," Stewart says. "It can capture anything."
Coreflood is part of a class of malicious software, called banking trojans, designed primarily to help crooks break into bank accounts online. The number of banking trojans detected on the Internet this month topped 24,800, up from 3,342 at the start of 2006, security firm F-Secure says.
An infection usually starts when you visit a Web page implanted with a snippet of malicious coding. By simply navigating to the tainted page, your browser gets redirected, unseen, to a hub server that downloads the data-stealing program onto your hard drive.
Dozens of gangs specialize in banking trojans. They have it much easier than phishing scammers, who must lure victims into typing sensitive data on spoofed Web pages, says F-Secure researcher Patrik Runald.
"This is very organized crime," Runald says. "These gangs are hiring people and making tons of money."
The Coreflood Gang is among the most sophisticated. Stewart recently analyzed 500 gigabytes of stolen data stored on a rented hub server. He pinpointed 378,758 Coreflood infections inside thousands of organizations, small and large.
A workplace PC can get a new infection each time someone logs on. The most infections: a county school district with 31,425, a hotel chain with 14,093 and a health care company with 6,744. About 230 networks turned up with 50 or more Coreflood infections, while 35 networks each had 500 or more.
Gang members cull the stolen data for log-ons and account statements, especially bank accounts online with high balances. Next, they log into the accounts and make online cash transfers into "drop" accounts they control.
After having two hub servers shut down by the tech security community in May, the Coreflood Gang rented two new hubs and picked up where they left off. Today, they continue operations unimpeded, says Stewart.
Companies infiltrated by the Coreflood Gang need to rethink how they do network security. Employees surfing the Internet on work PCs ought to take pause. "If you don't understand the threats that are out there, then you probably should not be banking online," Stewart says.
An interesting article from USA Today on the latest wave of cybercrime:
Russian cybercrooks target high bank balances online
By Byron Acohido, USA TODAY
Call them the Coreflood Gang. A ring of cyber bank robbers from southern Russia has quietly perfected a way to get a beachhead inside company networks.
Once inside, it infects every PC within reach with a custom-made data-stealing program called Coreflood. The goal: go rip off bank accounts online.
Over the past 16 months, the Coreflood Gang has infected swaths of PCs inside thousands of companies, hospitals, universities and government agencies, says SecureWorks researcher Joe Stewart, who has tracked and documented the spread of Coreflood over that period.
"It's spying on you, capturing your log-ons, user names, passwords, bank balances, contents of your e-mail," Stewart says. "It can capture anything."
Coreflood is part of a class of malicious software, called banking trojans, designed primarily to help crooks break into bank accounts online. The number of banking trojans detected on the Internet this month topped 24,800, up from 3,342 at the start of 2006, security firm F-Secure says.
An infection usually starts when you visit a Web page implanted with a snippet of malicious coding. By simply navigating to the tainted page, your browser gets redirected, unseen, to a hub server that downloads the data-stealing program onto your hard drive.
Dozens of gangs specialize in banking trojans. They have it much easier than phishing scammers, who must lure victims into typing sensitive data on spoofed Web pages, says F-Secure researcher Patrik Runald.
"This is very organized crime," Runald says. "These gangs are hiring people and making tons of money."
The Coreflood Gang is among the most sophisticated. Stewart recently analyzed 500 gigabytes of stolen data stored on a rented hub server. He pinpointed 378,758 Coreflood infections inside thousands of organizations, small and large.
A workplace PC can get a new infection each time someone logs on. The most infections: a county school district with 31,425, a hotel chain with 14,093 and a health care company with 6,744. About 230 networks turned up with 50 or more Coreflood infections, while 35 networks each had 500 or more.
Gang members cull the stolen data for log-ons and account statements, especially bank accounts online with high balances. Next, they log into the accounts and make online cash transfers into "drop" accounts they control.
After having two hub servers shut down by the tech security community in May, the Coreflood Gang rented two new hubs and picked up where they left off. Today, they continue operations unimpeded, says Stewart.
Companies infiltrated by the Coreflood Gang need to rethink how they do network security. Employees surfing the Internet on work PCs ought to take pause. "If you don't understand the threats that are out there, then you probably should not be banking online," Stewart says.
Sunday, May 4, 2008
Online Bill Pay Concerns Reporter
Posted by Mark Brousseau
Below is an article from today's Baltimore Sun that illustrates the lingering FUD factor (fear, uncertainty and doubt) surrounding online bill pay:
Paying online can weave a web of problems
Dan Thanh Dang
Consuming Interests
May 4, 2008
My friends tell me it's quick and painless. They say doing it makes life feel so much easier. They also swear that once you start, you won't be able to live without it.
It sounds so enticing. But I still refuse to bank online or pay my bills online. I do feel like an oddball whenever I sit down a couple times a month to write checks. I still lick the envelopes, press a stamp on each and then walk all of it to a mailbox or post office that I trust to get my bills where they need to go, on time.
Scoff if you will, but I'm not really sure it's more secure to click a few buttons on a computer to digitally send a payment in bits to some numerical account somewhere.
It's not that I haven't seen the writing on the wall.
A recent report from the Federal Reserve showed that more than two-thirds of noncash payments are now done electronically. Studies have shown that the chances of someone stealing my data online are no greater than the chances of someone swiping my mail. I know most banks use some sort of encryption and cryptography to safeguard my transactions. I know online banking scored 82 out of 100 on the University of Michigan's American Customer Satisfaction Index this year. And, yes, I would likely save some money since I wouldn't have to buy stamps anymore.
And yet, I'm still leery about taking the electronic plunge.
Why? Because once every couple of weeks, I hear from someone I know or get a call or e-mail from someone like Laurie Hansen who scares the bejesus out of me about how some company withdrew two electronic payments in one month or how a payment never made it to a designated recipient.
And don't even get me started about automatic bill pay, which is the equivalent of giving someone else license to steal straight out of my bank account whenever they want.
In Hansen's case, the 46-year-old Catonsville lawyer signed up for online bill payment in 2003 when she bought her Dodge Durango. Her online payments to Chrysler were trouble-free for five years until last February and March, when she discovered that two $460 payments didn't make it. It was sent to some mortgage company.Stories like that make me cringe.
The fact of the matter is I'm a bit of a control freak about paying my bills. I don't like relying on anyone - be it my bank or the company I owe money to - to make sure I pay a bill on time.
When I write a check and mail it, I know I've done all I can to make sure my bill gets paid.
When I click a button, I'm relying on my bank to make sure that transaction goes through on time. What if the system crashes and my payment does not get sent? What if my bank sends two payments instead of one to my mortgage company?
I'd get whacked with late fees and overage penalties, which would ding my credit, and bad credit would make my interest rates go up, high interest rates would make it harder for me to pay my bills, and before you know it, my dog and I would end up living on a bench in Patterson Park.
OK, I exaggerate. But only a little.In Hansen's dilemma, butterfingers did her in. Someone typed in some wrong keys, and her money was sent to some company she didn't owe money to."
When I signed up for online bill payment, I didn't have to type in an address," Hansen said. "Bank of America said it already had a relationship with Chrysler Financial, so all I had to do was fill in my account number. Things went fine until my payments went missing. When I called Chrysler, they told me they changed their billing address recently."
When Bank of America went back to look at what happened, they found that an incorrect ZIP code was entered from their merchant list. It resulted in my money being sent to the wrong company. The biggest problem for me was not knowing when they would put my money back."
Hansen said one customer service rep told her it would take three to five days to resolve the case, another said five to seven, and a third told her seven to 10 days. Banks have 10 days to conduct an investigation, and if they can't come up with a determination in your case, they must provide you with a provisional credit, according to Craig Stone, deputy ombudsman for customer assistance for the Office of the Comptroller of the Currency, which regulates all national banks.
Bank of America declined to comment on Hansen's personal account because of privacy concerns, but spokesman Tara Burke said, "We capture payments by using P.O. boxes and ZIP codes. You have to enter both correctly in order for the payment to go through accurately. If one is wrong, the payment can be diverted to the wrong place." But, in any case, Burke said, "If a mistake or a late payment is made on our end, our customers are protected under zero percent liability guarantee."
True, but it could still take 10 days to correct the problem. That's a long time for some people living from paycheck to paycheck.
Whether it was Hansen's fault, the bank's fault or both, the whole situation was resolved in one day after Hansen called the OCC, which put her in touch with Bank of America's executive office.
The $920 owed to her was placed back into her account on April 1 - less than 10 business days after she called the bank on March 19."
If someone had explained to me that the money would be returned in 10 days, I would have felt a lot better," Hansen said. "I'm definitely going to pay closer attention to everything in the future and double-check that my payments are going through. I've only ever had one other problem come up in the eight years that I've been using it. I use online bill paying all the time, so I'm not sure I could live without it now."
I remain unconvinced.
Below is an article from today's Baltimore Sun that illustrates the lingering FUD factor (fear, uncertainty and doubt) surrounding online bill pay:
Paying online can weave a web of problems
Dan Thanh Dang
Consuming Interests
May 4, 2008
My friends tell me it's quick and painless. They say doing it makes life feel so much easier. They also swear that once you start, you won't be able to live without it.
It sounds so enticing. But I still refuse to bank online or pay my bills online. I do feel like an oddball whenever I sit down a couple times a month to write checks. I still lick the envelopes, press a stamp on each and then walk all of it to a mailbox or post office that I trust to get my bills where they need to go, on time.
Scoff if you will, but I'm not really sure it's more secure to click a few buttons on a computer to digitally send a payment in bits to some numerical account somewhere.
It's not that I haven't seen the writing on the wall.
A recent report from the Federal Reserve showed that more than two-thirds of noncash payments are now done electronically. Studies have shown that the chances of someone stealing my data online are no greater than the chances of someone swiping my mail. I know most banks use some sort of encryption and cryptography to safeguard my transactions. I know online banking scored 82 out of 100 on the University of Michigan's American Customer Satisfaction Index this year. And, yes, I would likely save some money since I wouldn't have to buy stamps anymore.
And yet, I'm still leery about taking the electronic plunge.
Why? Because once every couple of weeks, I hear from someone I know or get a call or e-mail from someone like Laurie Hansen who scares the bejesus out of me about how some company withdrew two electronic payments in one month or how a payment never made it to a designated recipient.
And don't even get me started about automatic bill pay, which is the equivalent of giving someone else license to steal straight out of my bank account whenever they want.
In Hansen's case, the 46-year-old Catonsville lawyer signed up for online bill payment in 2003 when she bought her Dodge Durango. Her online payments to Chrysler were trouble-free for five years until last February and March, when she discovered that two $460 payments didn't make it. It was sent to some mortgage company.Stories like that make me cringe.
The fact of the matter is I'm a bit of a control freak about paying my bills. I don't like relying on anyone - be it my bank or the company I owe money to - to make sure I pay a bill on time.
When I write a check and mail it, I know I've done all I can to make sure my bill gets paid.
When I click a button, I'm relying on my bank to make sure that transaction goes through on time. What if the system crashes and my payment does not get sent? What if my bank sends two payments instead of one to my mortgage company?
I'd get whacked with late fees and overage penalties, which would ding my credit, and bad credit would make my interest rates go up, high interest rates would make it harder for me to pay my bills, and before you know it, my dog and I would end up living on a bench in Patterson Park.
OK, I exaggerate. But only a little.In Hansen's dilemma, butterfingers did her in. Someone typed in some wrong keys, and her money was sent to some company she didn't owe money to."
When I signed up for online bill payment, I didn't have to type in an address," Hansen said. "Bank of America said it already had a relationship with Chrysler Financial, so all I had to do was fill in my account number. Things went fine until my payments went missing. When I called Chrysler, they told me they changed their billing address recently."
When Bank of America went back to look at what happened, they found that an incorrect ZIP code was entered from their merchant list. It resulted in my money being sent to the wrong company. The biggest problem for me was not knowing when they would put my money back."
Hansen said one customer service rep told her it would take three to five days to resolve the case, another said five to seven, and a third told her seven to 10 days. Banks have 10 days to conduct an investigation, and if they can't come up with a determination in your case, they must provide you with a provisional credit, according to Craig Stone, deputy ombudsman for customer assistance for the Office of the Comptroller of the Currency, which regulates all national banks.
Bank of America declined to comment on Hansen's personal account because of privacy concerns, but spokesman Tara Burke said, "We capture payments by using P.O. boxes and ZIP codes. You have to enter both correctly in order for the payment to go through accurately. If one is wrong, the payment can be diverted to the wrong place." But, in any case, Burke said, "If a mistake or a late payment is made on our end, our customers are protected under zero percent liability guarantee."
True, but it could still take 10 days to correct the problem. That's a long time for some people living from paycheck to paycheck.
Whether it was Hansen's fault, the bank's fault or both, the whole situation was resolved in one day after Hansen called the OCC, which put her in touch with Bank of America's executive office.
The $920 owed to her was placed back into her account on April 1 - less than 10 business days after she called the bank on March 19."
If someone had explained to me that the money would be returned in 10 days, I would have felt a lot better," Hansen said. "I'm definitely going to pay closer attention to everything in the future and double-check that my payments are going through. I've only ever had one other problem come up in the eight years that I've been using it. I use online bill paying all the time, so I'm not sure I could live without it now."
I remain unconvinced.
Friday, November 16, 2007
Remote Channels Drive Growth
By Mark Brousseau
U.S. bank transactions are expected to grow at a compound annual rate (CAGR) of nearly 10 percent between 2006 and 2010, according to Needham, MA-based TowerGroup. Driving this growth are remote channels, with the fastest rates coming from online (27 percent) and the call center (7.1 percent), followed by the branch (still kicking at 1.4 percent) and the ATM (0.5 percent).
Is this what your bank is projecting? E-mail me at m_brousseau@msn.com.
U.S. bank transactions are expected to grow at a compound annual rate (CAGR) of nearly 10 percent between 2006 and 2010, according to Needham, MA-based TowerGroup. Driving this growth are remote channels, with the fastest rates coming from online (27 percent) and the call center (7.1 percent), followed by the branch (still kicking at 1.4 percent) and the ATM (0.5 percent).
Is this what your bank is projecting? E-mail me at m_brousseau@msn.com.
Online Bill Payment Pays Off
By Mark Brousseau
For financial institutions, integrating online banking and bill payment has the potential to reduce operating costs, expand cross-selling and up-selling capabilities, and increase consumers' interactions through the online channel, according to CheckFree Corp.
Online banking customers visit their financial institutions' sites an average of 11.2 times per month, according to the 2007 Consumer Bill Payment Survey, conducted by Harris Interactive with the Marketing Workshop, and sponsored by CheckFree. However, customers who use both online banking and bill payment services visit their financial institutions' sites 13.4 times and those who use electronic bills to receive and pay their bills visit the online banking sites an average of 15.1 times, according to the same survey.
Today, online banking and bill payment exist as separate applications on many financial institution websites -- meaning banks have a ready opportunity to improve their bottom line.
What do you think? E-mail me at m_brousseau@msn.com.
For financial institutions, integrating online banking and bill payment has the potential to reduce operating costs, expand cross-selling and up-selling capabilities, and increase consumers' interactions through the online channel, according to CheckFree Corp.
Online banking customers visit their financial institutions' sites an average of 11.2 times per month, according to the 2007 Consumer Bill Payment Survey, conducted by Harris Interactive with the Marketing Workshop, and sponsored by CheckFree. However, customers who use both online banking and bill payment services visit their financial institutions' sites 13.4 times and those who use electronic bills to receive and pay their bills visit the online banking sites an average of 15.1 times, according to the same survey.
Today, online banking and bill payment exist as separate applications on many financial institution websites -- meaning banks have a ready opportunity to improve their bottom line.
What do you think? E-mail me at m_brousseau@msn.com.
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