Blind Spots in Banking: Fraud, Branches & the Brains of Gen Y

Posted on Wed, May 20, 2015 @ 08:00 AM

Lee_Wetherington Author: Lee Wetherington,

Bankers often fancy themselves “numbers people”. Blind_spots_in_banking

Interest rates. Balance sheets. Performance metrics. Bankers will calculate a Return on Anything (ROA) and Everything (ROE).

So, if there is a subset of our species who are rational, surely it’s bankers. Right?

Wrong. Bankers are no more rational than the rest of us. In fact, confidence in their own numbers can sometimes blind bankers to probabilities governing areas of uncertainty and to trends shaping alternative futures.

Over the past 40 years, behavioral psychology has documented over 60 cognitive biases that skew our perceptions and impair our judgment. Bankers aren’t immune to cognitive biases, but recognizing the most prevalent biases and their attendant blind spots provides an opportunity to control for them and to make better strategic decisions as a result.

Fear Factor

According to both Gallup and the Pew Research Center, most Americans feel less safe this year than last—a perception that has grown steadily over each of the past 15 years—even though America is safer now than at any time in its past. Violent crime in the U.S. is down 70% since the early 1990s. Homicides are down by 50%. And wars today kill 90% fewer people than in the 1950s.

Most of us don’t maintain a proportionate sense of fear. We are hardwired to overreact to dramatic threats and to ignore others with a less compelling narrative. Preventable harm in hospitals claims between 200,000 and 400,000 American lives each year. And you are 4X more likely to die in a bathtub in the U.S. than at the hands of a terrorist. So which scares you more: hospitals, bathtubs or terrorists?

I recommend you avoid taking baths in hospitals. Just saying.

In banking, most fear centers upon security threats and fraud. Last year’s unprecedented number of data breaches fueled alarm across the industry. But was there more identity theft in 2014? No. According to Javelin Strategy & Research, there was actually less: fewer victims of identify fraud, lower fraud losses, and faster fraud resolution times. The reality is that 2014 was a banner year in the fight against fraud, but you probably won’t hear much about that since fear sells and good news doesn’t.

The real challenge with security is understanding where fraud is growing and where it’s declining, but we often give the past much more weight than the future. This year, EMV chip cards are dominating bankers’ radar while the real story is beyond the point-of-sale (POS) where card-not-present (CNP) fraud is exploding online. By 2018, CNP fraud is expected to grow to 4X that of card-present fraud at the POS.

Missing the bigger picture of CNP fraud, bankers may delay allocating resources to the tokenization, online authentication, and real-time transaction analytics necessary to protect them and their cardholders against what is by all counts a materially bigger threat.

Branches and Historical Bias

The FDIC’s recent report, Brick-and-Mortar Banking Remains Prevalent in an Increasingly Virtual World, has reignited debates surrounding the future of branches. The report looks backward to 1935, cites a fairly steady rise in branch density, and concludes that technology hasn’t significantly impacted branching in the U.S.

This despite a 45% decline in branch transaction activity since 1992. Despite a 68% decline in check usage since 2003. Despite the U.S.’ top 50 banks all reducing their branch networks. And despite the decline in branch density generally since 1989. Despite it all, the FDIC report leaves bankers thinking the status quo of branching hasn’t changed and therefore won’t change anytime soon.

Classic. Historical. Bias. As Brett King correctly points out, the problem with the FDIC’s report is that it focuses upon lagging rather than leading indicators of branch health in the U.S. Crucially, it doesn’t measure or track the “average number of visits to a branch per customer per year.” If it did, it might discover—as 4 of the U.S.’ largest banks have reported—that that number of visits per customer has plummeted to 1-2 per year—from approximately 24 visits per year twenty years ago.

Past results do not guarantee future performance. This is a well-worn admonition against historical bias, i.e., our tendency to assume that the past is a sufficient predictor of the future. But clarity on the future of branches is made especially difficult given we are at a tipping point. For the first time in the history of banking, digital channels reached parity with the physical branch in 2014—half of applicants opening new checking accounts did so online, or via smartphone or tablet.

And here’s the kicker: while half of consumers opened new checking accounts through digital channels last year, 70% plan to do so this year, according to Javelin.

Adjusting for historical bias requires deeper insights into present trends and better extrapolations into future developments.

Brain Bias

Our brains are the very last organ of the body to mature, and that process doesn’t end until a person reaches his/her mid-twenties or early thirties.

Several females I know insist this process never actually ends in males.

Gender politics aside, neuroscience research has established that the brain matures from the back to the front—which means that throughout childhood, adolescence, and young adulthood, the executive function of the pre-frontal cortex (front of the brain) isn’t mature enough, i.e., isn’t processing fast enough, to keep the impulses of the amygdala (back of the brain) in check. The amygdala, incidentally, drives appetites for food, fire, physical affection, and shiny things.

This has big implications for financial services. In recent years, several innovators in mobile Personal Financial Management (PFM) apps have incorporated real-time feedback loops to help Gen Y and others control spending impulses and save more. The idea is that if you show someone in real time that he doesn’t have enough money to buy the thing he wants, he won’t buy it.

But there’s a problem. Providing real-time feedback isn’t effective when provided to people whose pre-frontal cortexes can’t process that feedback quickly enough to stop the amygdala’s impulse to buy.

So, what can bankers do to help? Automate. That is, help Gen Y automate savings and investments in the background by moving small amounts from checking to savings/investment accounts when cash flow is positive and upcoming bill obligations are not threatened. Digit and Acorns are two notable innovators on this front.

Last week, Moven, a third-party debit card and mobile PFM solution, unveiled an “impulse savings” feature that proactively presents a one-tap savings opportunity whenever the consumer is comfortably under budget (and flush with funds) throughout the month.

Return on Bias (ROB)

Whether its allocating resources in the fight against fraud, transforming branches, or serving Gen Y, bankers would do well to verse themselves in the biases that distort perceptions and impair judgment—both in themselves and their clientele.

And whatever you do, stay away from hospital bathtubs.

Tags: cybersecurity, millennials, branch network

Incident Response Plans & Vendor Mgmt: Lost in the Cybersecurity Mix

Posted on Wed, May 13, 2015 @ 08:00 AM

Jenny_Roland Author: Jenny Roland-Vlach,

If you find yourself in need of a stark reminder on how quickly time passes by, consider this: CybersecurityMay marks one year since the FFIEC officially announced their focus on cybersecurity for financial institutions. Even though official guidance is still pending, the FFIEC has been using the past year to continue underscoring the importance of cybersecurity. In addition to periodic updates being provided by the FFIEC, there have been a multitude of articles on the topic of cybersecurity. While there has been an emphasis on areas such as C-Suite training and information sharing, I have noticed two items in particular that seem to be getting lost in the mix of cybersecurity discussions. Those items are Incident Response Plans (including testing plans) and critical vendor management. Let’s look at Incident Response Plans first.

Every financial institution has an Incident Response Plan in place, but what varies is how detailed the plan is and its efficacy. In order to properly respond, FIs first need to have a plan in place that can actually be followed. A high level, one to two page plan is not going to suffice. If this sounds similar to your own plan, pay close attention to the following.

  • Detail how you plan to respond in certain scenarios that can be classified by severity levels (from virtually no impact on your FI to immediate and severe consequences) and make sure that cyberattacks are included in the list of potential scenarios.
  • Your plan should also clearly indicate the members of your Incident Response Plan team and what their responsibilities are during an incident. Ensure that team members understand these responsibilities.

In November 2014, the FFIEC released two documents, one of which was the Cybersecurity Assessment General Observations (read our recent blog). This document highlights essential questions that FIs and their Board of Directors need to consider. For Incident Response Plans, the FFIEC has stressed the importance of knowing how to respond internally and with customers, vendors, regulators, and law enforcement. Procedures for these items should also be addressed within your own plan.

Another critical component related to Incident Response Plans is testing. FIs not testing their plans certainly is not a new concern; in fact, this has been an ongoing issue. If your FI has never tested your plan, or it has been a significant amount of time since it was last tested, now is the time to make testing part of your routine.

  • Incident Response Plans should be tested at least annually and remember, testing is your opportunity to find out if your plan can actually be followed properly during an incident.
  • Table top test scenarios can be elaborate or as simple as you would like, but a cyberattack scenario is certainly recommended.

If your FI experiences a cyberattack, knowing that your plan is well developed and has been tested will go a long way in making the response process easier.

Vendor management of critical vendors is the other topic that seems to be getting lost in the cybersecurity discussion. It would be a mistake to not consider how vendor management impacts cybersecurity. The cybersecurity controls that your critical vendors put into place and how well they manage those controls will inevitably impact your FI. If your vendors lack sufficient controls, a breach at one of their locations could put your corporate and customer non-public information at risk. This is why the FFIEC stressed appropriate vendor management in the Cybersecurity Assessment General Observations document. Specifically, they highlight the importance of considering the risks of vendors’ connections to your systems and evaluating the controls that they have in place on their end.

In early February of this year, the FFIEC released Appendix J: Strengthening the Resilience of Outsourced Technology Services. Initially, it appears that this new guidance is focused entirely on Business Continuity Planning, however, it is full of valuable vendor management information. The guidance focuses on a number of items for your FI to consider and how they are essential to critical vendors’ (and ultimately your FI’s) cyber resilience. These items include:

  • Evaluation and selection of vendors;
  • Initial and ongoing due diligence;
  • Contracts;
  • Management of multiple vendors;
  • Contingency planning; and
  • Cyber resiliency efforts.

If you have not done so already, I would encourage you to review Appendix J and evaluate how to update your own Vendor Management Program. By having and maintaining an effective Vendor Management Program, your FI will find itself in a better position to address cybersecurity on all fronts. The Superintendent of Financial Services for the State of New York, Benjamin Lawsky, summed up this idea quite well with his recent statement in a Press Release, “A bank’s cybersecurity is often only as good as the cybersecurity of its vendors.”

As your financial institution is working to establish a strategic plan for addressing cybersecurity, it is important to remember all the components that make for an effective plan. Incident Response Plans and vendor management are easily overlooked when tackling a topic such as cybersecurity, but both will greatly impact your efforts. Devoting the necessary time to update your Incident Response Plan (and ensure testing) and appropriate management of critical vendors, will strengthen your own cybersecurity controls and make you better prepared to prevent and respond to any potential cyberattacks. While these two elements may not be at the forefront of the discussion on cybersecurity, Incident Response Plans and Vendor Management Programs will prove to be just as crucial at the end of the day. Learn More About ProfitStars Information Security & Risk  Mgmt Solutions

Tags: Information Security & Risk Management, cybersecurity, Incident Response Plan

Jack Henry & Associates to Deliver Best-in-Class Solution to Mobilize Bank Branches with Surface Pro 3

Posted on Mon, May 11, 2015 @ 03:08 PM

Back in November, Jack Henry & Associates and Microsoft announced the introduction of the innovative new Branch Anywhere application for Microsoft Windows and Surface Pro 3.  The Branch Anywhere app allows banks to centrally manage all aspects of customer info and allows bank employees to become mobile branch managers who can better meet their clients by safely and securely accessing important customer and account information from any location.  Surface Pro 3 enhances the Branch Anywhere experience by providing employees with a lightweight tablet when they are mobile and a powerful laptop/desktop when they’re at their desk.

The response by financial institutions to the launch of Branch Anywhere has been extremely positive.  Banks like First Florida Integrity Bank and IBERIABANK are already using the new Branch Anywhere app on Surface Pro 3 to give their branch employees the ability to be more productive in more locations by seeing account and activity information quickly and easily. From an IT perspective, Surface easily fits into a bank’s existing processes for supporting computer hardware–saving them considerable time and money.



By providing core processing services for more than 11,300 financial institutions, Jack Henry & Associates continues to be a stalwart software provider for financial services.  Jack Henry & Associates provides more than 300 products and services that enable its customers to process financial transactions, automate their businesses, and succeed in an increasingly competitive marketplace.

Surface has also seen considerable success in the financial services industry, as banks that are looking to transform their branches or provide greater mobility to their employees have gravitated to Surface as their single device solution--leading to savings in device costs and IT management.  More importantly, customers are amazed to learn how much they can do with this lightweight device—whether running all of their desktop apps, administering their security and device management protocols, or using Surface as a full desktop workstation powering multiple monitors, full size keyboard & mouse.  

Today’s banks are faced with increasing pressure to differentiate themselves and provide more engaging customer options than their competition.  To achieve this, they require tools that meet these new demands and provide them with unprecedented levels of flexibility and mobility—yet in a powerful and secure manner.  The combination of Jack Henry & Associates’ best-in-class banking software and award-winning Surface mobile hardware help to deliver on that promise.

Now even more value for banks with Surface and Jack Henry & Associates

We are happy today to announce steps between our two organizations that will help us continue to enhance the solution we’re offering for banks looking to mobilize their employees. In an effort to better serve our joint customers in the financial services sector, we’re working closely to make a best-in-class combination of software and hardware available for the financial services market.

“With the recent launch of Jack Henry & Associates’ new Branch Anywhere application, there’s a natural fit with Surface to jointly help customers in the new world of branch transformation,” says Cyril Belikoff, Senior Director—Microsoft Surface.  “Because of its combination of mobility and power, Surface has seen great success with banks that are looking to transform their branches or provide greater mobility to their employees. Customers—many of whom had previously been forced to deploy both iPads and laptops to their users—can achieve everything with a single Surface device. With the recent announcement of the new Surface 3, these financial institutions now have multiple options with Surface to meet their different needs of their varied employees. We believe that our work with JHA truly helps to offer a “best of breed” combination of software and hardware that financial institutions can build around.” 

Mark Forbis, chief technology officer at Jack Henry & Associates, said, “This partnership is a pivotal step in helping our customer’s build the branch of the future, and Branch Anywhere is the perfect tool for that transition. As banks look for ways to transform the branch experience, Surface tablets enable a single device approach that saves banks time and costs as they do not have to deploy and manage separate hardware – one device acts as a full desktop workstation or a secure mobile tool. We are confident that the power and flexibility provided by Surface Pro 3 is a strong fit for the financial services industry.” 

Jack Henry & Associates has successfully piloted Surface Pro 3 within its organization and has selected Surface as one of the preferred devices for all Jack Henry employees.  Surface Pro 3’s combination of light weight, high performance, and long battery life in a single package will provide Jack Henry & Associates employees with greater mobility and flexibility in their day-to-day activity.    

In addition, the two organizations have partnered with CDW to implement a purchase portal specifically for Jack Henry customers.  Through this program, Jack Henry customers will now have access to a unique online destination through which they will be able to easily acquire Surface devices together with Jack Henry & Associates’ software with special discounts. 

Ben Weiss, Director of Financial Services Sales with CDW, said, “We see great value for the market resulting from our effort to work closely with Jack Henry & Associates and Microsoft. The customer solution the two organizations can now offer will no doubt enhance the experience of financial services customers. CDW is excited to contribute to this offering by delivering custom solutions to fit each customer’s particular needs.” 

To learn more about Jack Henry & Associates, visit: 

To learn more about Surface in financial services, visit:

Learn More About  Branch Anywhere

Tags: customer experience, branch banking, branch channel

Branch Banking from Anywhere

Posted on Wed, May 06, 2015 @ 09:00 AM

Richie_Dodgen Author: Richie Dodgen,  

We are an extremely mobile society. Most of us own multiple mobile devices: phones, tablets, and wearables; and as customers, we are accustomed to interacting with retail businesses via a mobile device. Traditional forms of banking technology and delivery channels don’t completely satisfy this customer preference, but the good news is that changes in the banking industry and bankers’ eagerness to adopt new technology are beginning to bring about a new and exciting era. 

With compliance now a large cost of doing business and continued regulatory pressure on fee income, efficiently run delivery channels are a necessity. The physical branch is the most costly of the channels, and foot traffic continues to decline. As most banks are beginning to see a shift in new customer and account acquisition through electronic channels, the importance of an efficiently run branch is more important than ever. The average branch is 25 years old and was laid out for a different era – directing customers to many areas of the branch for a specialized need. Now, many banks have begun to focus on the customer experience as a competitive advantage. With the introduction of pods and the universal banker, the customer can have a single interaction with a cross-trained banker that can address a wide range of needs.

Banks like First Florida Integrity Bank and IBERIABANK are already using new branch transformation apps with transforming tablet devices like the Microsoft Surface Pro 3 to give their branch employees the ability to be more productive in more locations by seeing account and activity information quickly and easily.

The newest evolution of branch transformations has certainly aided the industry in beginning to resemble the rest of the retail world by focusing on a much more modern and sophisticated atmosphere. We are starting to see high top tables or couches instead of big wooden desks. Coffee bars and much more casual layout that resembles a Starbucks or Apple store are becoming more common. Not only is this more familiar to millennials, but it allows for a much smaller footprint.

A critical component in these branch transformations is the use of technology and mobile devices to complement this effort. The use of tablets allows for a more comfortable and collaborative interaction with customers that provides a new perception of banking. Not having to go and sit down for a lengthy session is far less intimidating, and having the right tools that work seamlessly with the rest of the bank’s systems enable these interactions to be efficient. Many banks that are looking to transform their branches or provide greater mobility to their employees have gravitated to Microsoft.  This interest and adoption in the financial services industry is being driven by the convenience and safety of using an already deployed Microsoft Office Suite of products coupled with the security that the Microsoft products offer.

Providing the right mobile tools not only assists with modern branch transformations, but it frees the banker up to leave physical locations. They can now take their systems with them in a manner that is meant to be mobile – a true mobile app, not one that is merely connected remotely to an in-bank system. It allows them to go to customers’ and prospects’ places of business to meet with them for a more productive lunch. They can also service customers at community events, or even provide for worker-on-the-go tools by having the in-bank app on their phones.

What would effective branch transformation look like at your financial institution? Fewer branches? Smaller or redesigned branches? Increased mobilization? Leave a comment and let us know!

Jack Henry clients will have access to a new Surface purchase program through CDW, which provides banks a unique online portal through which they can purchase Surface tablets and Jack Henry & Associates’ Branch Anywhere software together with special discounts.

Learn More About  Branch Anywhere


Tags: customer experience, branch banking, branch channel

How to Grow Existing Client Relationships

Posted on Wed, Apr 29, 2015 @ 08:00 AM

Barbara_Kempf Author: Barbara Kempf,

Nearly every business today is working to “create, retain, and grow relationships profitably.” Successful financial institutions excel at creating, retaining, and growing client relationships.

Conventional wisdom across many industries indicates that it is less costly to generate new sales from current clients than to initiate new sales to prospects (the clients of our competitors). Let’s examine some of the ways a Customer Relationship Management (CRM) system can help us grow relationships with current clients.

Additional Services

Additional services are often among today’s most effective tools for solidifying client relationships. Checking, savings, and loans have become commodity products today. They are available at every bank, credit union, and stock brokerage office. Our competitors can easily replicate the features of these products. When we develop product features that set us apart, we see those same new features offered across the street far too soon for us to be able to reap the rewards of our own product creativity.

It’s easy for clients to move traditional deposit and loan relationships. Close the checking; close the savings. Re-finance the loan across the street.

Additional services products can be the “cement” of client retention. Direct deposit, bill pay, automatic debits, mobile banking — these are the “sticky” services we provide that make it more difficult for our clients to move their relationships from us.

It is vital to feed complete information about “sticky” additional services into your CRM system and make that information available to your marketing team. With additional services information the marketing team can then see the proportion of client households utilizing each “sticky” service. As importantly, the report can direct our thinking toward clients not yet using these critical additional services.

When we know that 75% of our checking clients do not have bill pay or are not using mobile banking services we can begin to plan a strategy to directly contact these high opportunity clients with a strong offer of critical “sticky” services.

“The cost to acquire a client is one tenth the cost of retaining”.

Business Owner Relationships

In today’s world when we land a new business relationship we work hard to also acquire the personal Customer Relationship Managementrelationships of business owners and key managers. Sometimes we get the new personal relationships right away. Sometimes the owners and managers tell us, “Prove yourself with our business relationship and then I’ll consider moving my personal accounts, too.” In past years, we may not have always been so aggressive to get the entire business-and-personal-relationship package.

Use your CRM system to find those businesses where there is an opportunity to land related personal relationships.

Sweet Spot Clients

Sweet spot clients are those with a transaction-and-loan-and-savings/investment relationship. Sweet spot analysis helps the organization focus on those clients with an incomplete relationship.

Sweet spot segments:

  • Transactors only
  • Savers only
  • Borrowers only
  • Saver / Transactors
  • Borrower / Transactors
  • Saver / Borrowers
  • Sweet Spot Clients

Start Today

Now is the time to intensify efforts to grow relationships with current clients. Review what is currently available in your CRM database. If there is valuable information not yet fed into the database, discuss what’s needed to expand the information and its value for creating, retaining, and growing client relationships. Also, check out our recent post calculating the ROI of a CRM system.

What’s been your best practice for growing existing relationships?

Learn More About  Customer Relationship Management

Tags: customer profitability, customer relationship management

Who’s Putting on Payments?

Posted on Wed, Apr 22, 2015 @ 08:00 AM

Eric_Wilson_Headshot_50x50 Author: Eric Wilson,

Wearable technology is all but certain to become a big factor in how people interact with the world around them.  And, with the Apple Watch scheduled to begin shipping later this week, this evolution seems likely to happen very quickly.  Of interest to banks and credit unions, experts expect payments to be one of the applications particularly suited to wearable devices.  Obviously, the Apple Watch will support Apple Pay, but other key players are also jumping in to extend their payment offerings to wearable devices.  For instance, Jawbone just announced that their Up4 fitness tracker bracelet will support NFC payments through a partnership with American Express.  

As wearables increase their presence in the market, the race to create innovative solutions that capture the demand of the growing population of tech savvy users will undoubtedly escalate.  So, what impact will the influx of new payment-enabled wearable devices have on financial institutions, especially in the consumer payments space?   

Wearable technology is an extension of a user’s digital network.

Gone are the days when new digital devices are heavily adopted because they improve their non-electronic predecessor’s specific function.  One of the least important duties performed by today’s smartphones is to serve as an actual phone.  In the same way, smart watches will no longer be primarily used for keeping track of time.  Instead, they will become an instantly accessible extension of a user’s primary digital device.


In the future, integration into a user’s personal digital network will be an absolute requirement for new devices.  In the wearables arena, the better a device improves a user’s ability to interact with their existing digital world, the more likely it is to provide added value.  Connected devices are already improving our everyday lives, and the possibilities for innovation are endless.

From a payments perspective users will continue to choose the most convenient mechanism.  If putting their wrist close to an NFC device or nodding their head to approve a payment can replace carrying a physical wallet and swiping a plastic card, users are likely to adopt these methods.  Even so, new devices will only gain traction if they support the user’s existing financial tools and effectively extend their existing digital network.  In short, wearables may be new, but their future as a payment method is dependent on how well they integrate with existing technology systems and payment channels.

Increasing utility is a major factor for motivating users to shift towards new payment mechanisms.

People only modify their habits and behavior when there is adequate incentive to do so.  Because wearables are quite literally bound to users directly, and because they are instantly accessible without having to dig them out of a pocket or a purse, they have the potential to make it easier to pay.  But in today’s smartphone-savvy world, users expect simple, elegant solutions, so there’s a high bar for the adoption of new devices.  While it seems intuitive that users could access wearables more easily and employ them more effectively than devices that have to be carried around, solutions like the Apple Watch must actually improve the payment experience before they will be widely seen as a viable payment method.

Improving the payment process doesn’t have to be all about saving time.  Wearables could also enhance the payment experience by giving customers quicker access to useful information in a way that helps buyers make better purchasing decisions.  And merchants should be motivated to engage wearables to improve the payment process, because statistics show that when users have a more fulfilling experience, they spend more!

It’s not about the payment, it’s the experience.

My vote for the most innovative wearable available today is Disney’s MagicBand!

As the article states:

“There’s no need to rent a car or waste time at the baggage carousel. You don’t need to carry cash, because the MagicBand is linked to your credit card. You don’t need to wait in long lines. You don’t even have to go to the trouble of taking out your wallet...”

In the ideal shopping experience, the payment process is invisible.  Once they’ve made their purchasing decisions and filled their shopping carts, most buyers are ready to be finished–but the payment process hasn’t even started yet.  From a consumer’s perspective, if they have to think about the payment process it’s already too late for it to be an ideal experience. 

One of the many geniuses behind Disney’s MagicBand is that it incorporates the payment into the overall experience.  MagicBand provides an all-in-one device that allows you to use the sensor in the wrist band to do everything from accessing popular attractions to entering your hotel room or buying food and merchandise at park stores.  If financial services providers want to improve payments, they need to find similar methods to remove friction from the process.  Wearable devices have an opportunity to make an impact by removing some of the physical friction that occurs during those key moments at the point of sale.

Financial institutions should leverage wearables to make payments simpler.

Banks and credit unions have traditionally been successful at introducing new technologies into the financial services arena.  More and more, consumers are using mobile devices as a means to view account information, transfer funds, and perform increasingly complex banking activities.  These new technologies have been a critical factor in keeping up with users’ evolving needs and expectations. 

In the same way, financial institutions should consider wearables as the next logical step in the merger of services and technology.  Leveraging wearable devices to create a better, more seamless payments experience could be a critical factor in how well FIs will continue to meet consumers’ demands. 

Has your FI started conversations about incorporating wearables into the payments process? I’d enjoy hearing your thoughts.

Learn More About  Enterprise Payment Solutions

Tags: Mobile Banking, payments

ONE is the Loneliest Number?

Posted on Wed, Apr 15, 2015 @ 08:00 AM

JasonSchwabline_50x50 Author: Jason Schwabline,

One. Numero Uno. The “loneliest number”, or the goal?  Customer experience in the financial services space has been measured under one interaction point for years—the branch. A bank lived and died through the relationships it cultivated and nurtured through its branches. Sometimes a visit was joyful … a first account or a new home for instance. Other times it was more like “Houston, we have a problem” and the branch became the rescue craft. While the reasons for interacting with a bank remain the same, the method of interaction between customers and their financial institution has evolved. Choice is king. A customer can now interact with their bank through many channels—picking the one that suits their comfort level and needs of the moment: a teller in a local branch, a quick dash to an image-enabled ATM, through their smartphone while at soccer, or late at night watching TV when they remember to complete a needed transfer before morning. 

Choice and convenience are key, but with them comes a cost. Not a perceived cost as once thought, but true hard dollars. Each new interaction point carries with it a new “channel.” New “channels” require new infrastructure. New infrastructure requires new maintenance and auditing processes, not to mention new fraud and risk considerations. The customer sees a shiny new mobile app letting them take “check selfies” that makes their money instantly real and available. Or a new kiosk in the lobby that lets them start most of a transaction by themselves and just pick up the cash on the way out. Cool huh? What a financial services provider sees are new costs and infrastructure requirements and they wonder how this will impact their total cost of transaction (up or down!), as well as whether a change will cause the customer to stay with the bank for the long term. This is where the concept of “ONE” comes into play.

What I see is that we are nowOne_Customer_Experience at a point of maturation in the deposit space. We know that acquiring that transaction is key. Being the first to get that deposit captured gets the leg up on the competition as you are then first to get those monies into the financial system and working. As the customer and their interactions have now matured, so too should the infrastructure that supports it. A customer wants “ONE” way to interact with you as a bank. This doesn’t mean one channel - it means one experience with a similar look and expected result regardless of the channel. 

For your bank this extends into an even more important choice for the future. Centralizing transaction acquisition technologies is no longer a choice but a necessity. One common processing platform can and should be put into place that would centralize all rules for deposits and their associated images, allowing for a more efficient operation that drives ONE experience for your customer. This doesn’t stop at how you acquire deposits, but follows the transaction all the way through to the back office where many institutions over the years have built 15, 25, even more than 30 systems in one known case to care for transaction processing. The technology exists today to migrate all bank silos into a more unified, common processing platform and it has been proven to be effective. It’s not a dream, it’s real and it’s here and nothing will have a greater impact on the total cost of a transaction and a unified customer experience. It’s time to break down the silos internally as well as externally. I started off the blog with a nod to a classic song and I close with another—time to “tear down the walls”.  It’s time for silos to go as we move to “ONE.”

  Learn More About Seamless Image Capture  Across the Branch Environment

Tags: customer experience, electronic channel strategy

4 Ways to Connect with your Customers through Email Marketing

Posted on Wed, Apr 08, 2015 @ 08:00 AM

Lauren_Gleim_Headshot_50x50 Author: Lauren Gleim, 

“Hi there, I’m Lauren. Nice to meet you!”  It takes just a quick glance to evaluate someone when you first Email_Marketingmeet them. First impressions establish the relationship and are hard to reverse. No pressure, right? When you first meet someone whether in a social setting or at work, you engage with that person. A friendly smile and a handshake can go a long way. Just like you and me, your customers are people and our interactions with them can dictate the direction of that relationship. Customer engagement can set you apart from the competition and is driven by your ability to personalize that customer experience. Even if you can’t interact with your customers face-to-face, you can still create a personalized interaction through email marketing. Email remains the ultimate form of communication with your customer (techradar). Start your customers’ experience off right with these 4 recommendations:

Base emails on Customer Behavior

Don’t be late when you meet with customers even when it comes to emails. The opportunity to interact with your customers on time is there. Send emails based upon their site behavior in your product. Use email as your digital handshake and establish a connection in the beginning. Say hello with a welcome email when they enroll in online banking or bill pay. If John Doe hasn’t logged into this account in a month, tell him you miss him with an email reminding him about your features/services. Use these customer behaviors to create your email customer journey.    

Personalize Your Email Interactions

The average customer sends or receives 121 emails per day (The Radicati Group). Make your emails count! You are competing with emails from family members, social media notifications and other promotional materials.  Present your brand by adding your institution’s name and logo to your emails. Go a little further and add personalized customer content including your customers’ first name and the last 4 digits of their account. Opening emails with personalized information establishes trust and builds authenticity with your brand.  

Educate Your Customers 

Emails are not only about generating sales, you can use them for educational purposes. As you send a welcome email to your new customers, highlight features of your online banking and bill pay platforms. Educate them with demos, landing pages and tips. Consider this the “getting to know you” stage of your customer journey. Let them understand what your institution has to offer. 

Add Social Media Buttons 

Are you connected through social media? Include these links in your emails to customers. When you meet a new friend the next natural step is to friend them on Facebook or follow them on Twitter. Your customers are the same. They want to stay connected through any avenue you offer whether email, your website or social media. Keep them posted.

Small additions to emails make a large impact on customer engagement with your institution. In last month’s blog by Barbara Vega, she underscores the importance of attracting and retaining customers through strategic marketing.  Be strategic with your email marketing initiatives and use your digital marketing tools to your advantage. Form a positive customer-centric first impression.The iPay Resource Center has marketing materials to help you with your email marketing customer journey. Don’t miss out on FREE marketing!

iPay Resource Center


Tags: social media, bill pay, customer engagement, email marketing,

Business is About People (and Their Data)

Posted on Wed, Apr 01, 2015 @ 08:00 AM

Eric Flick Author: Eric Flick,

While it may sound cliché, our customers and employees are people.  Without them, our business doesn’t exist.  And, in this always on world, we live in, its mind boggling the amount of data that any one individual can generate.  Do an internet search of your name, your phone number, and your home address.  You may be astounded at what comes up.  There is data about you everywhere.  If you work for a financial institution (FI), your customers and members expect the data that you have related to them to be safe, secure, and available.  Surprisingly, of those three, secure may be the most straightforward, but that’s a different conversation.  We work with dozens of prospects and customers each and every week as they look at the gigabytes and terabytes of data they have across a myriad of platforms.  Beyond secure, how do they keep that data safe and available should they experience a business disruption to their data center? 

While that may sound intimidating, here are three questions you can ask to help guide your decisions about taking care of all of that data: 

  1. How often does the data change?
  2. How often is the data backed up and moved off-site?
  3. How much data loss is acceptable? 

Let’s think about some various applications – core processing, item processing, ATM, ACH, and internet banking transactions.  Let’s also bring email into the conversation. Using email as an example, your response to question number one was probably that data related to email changes consistently throughout the day and if you’re like a lot of customers we talk to, you answered that you back up weekly to question number two. Where this gets tricky though, is that most customers’ answers to the third question is “none”, I can’t lose any data. 

While “no data loss” is aSecurityverything was backed up on something called a diskette.  As ancient as that may sound to many of you, there are just as many people today that would consider backing up to tape equally ancient.

Today, modern FI’s are using a software solution over a secure connection to transfer data as it changes to a secure, offsite partner, that stands by ready to bring that data back to life should something happen at the FI.

You certainly hope that your FI is taking care of your data, keeping it secure, safe, and available.  Business is about people, and their data, and the FI taking care of it.

Learn More:   Keeping Data Secure, Safe & Available

Tags: customer data, data backup

Lockbox Services At-A-Glance

Posted on Wed, Mar 25, 2015 @ 08:22 AM

rob_hudecek_small Author: Rob Hudecek,

Traditionally many financial institutions offered lockbox services because they had to, not because they wanted to; and usually only to secure a high profile loan or depositor.  This approach rarely works (whether it be for lockbox or any other venture).  It is not by accident that many of the articles published on this blog focus on customer service as the strength of a community institution, and is often directly related to the community it helps create.  

From treasury management to loan officers, it is important to verse yourself in the growing needs of businesses who are considering outsourcing their payments (and generate fee income for your institution in the process):

  • For some merchants it’s the benefit to move their work to the cloud (i.e. anywhere but in their office).
  • For others it is to save on employee salaries.
  • And yet for others it is the last piece that is necessary in order to move to remote offices.

Types of Work

Retail: With support for MICR, Barcode, machine print, handwriting, and checkbox recognition, retail work covers straight-forward utility payments to complex order forms and surveys.  Basically any document with static or semi-static information can be processed.  The lockbox automates and validates electronic and paper payment posting to a merchant’s accounts receivable system to eliminate manual processes, improve research, and reduce costs.  

Service Offering:

  • Check, coupon, envelope, and correspondence scanning
  • Electronic remittance interfaces for bill pay and payment portals
  • Validation and reject file import
  • Electronic deposit
  • Account receivable posting
  • Remote scanning for walk-in payments
  • Remote client exception processing
  • Short and long term storage and web research options 

Target Audience processing over 2,000 transactions a month (with a sweet spot of 4,000 transactions or more): 

  • Government and Schools
  • Utilities
  • Property Management
  • Non-Profit and Churches
  • Retail Stores

Healthcare: Provides streamlined electronic and paper claim conversion, reconciliation, payment posting, and research to the healthcare provider.  Despite government initiatives, a large portion of healthcare remittance is still paper-based.  Even for electronic files, the modern standard for claim reconciliation is utilizing spreadsheet pivot tables.  By signing up with a lockbox, provider administrative offices have more time to concentrate on denial management and finding “under the couch” money for their practices.

Service Offering:

  • Conversion of paper EOB and ERA to one standard format
  • Automated data lift of paper EOB remittance to 835 posting file
  • Re-association of EFT/ACH payments to EOB and ERA remits
  • Quickly research claim and transaction level denials, remark codes, and correspondence
  • Aggregator or provider level dashboard reporting of the revenue cycle
  • Remote scanning for walk-in payments
  • Short and long term storage and web research options

Target Audience processing over 1,000 claims a month (with a sweet spot of 5,000 claims or more):

  • Regional Hospitals
  • Clinics and Multi-Practice Offices
  • Billing Companies
  • Direct Medical Providers

Lockbox services do not have to be delivered as a “you get what you get and don’t throw a fit” offering.  By employing modern technologies and good old “know your customer” practices, lockbox can be a very successful program for both your institution and the business communities it serves.

ProfitStars Lockbox Services Learn More Today

Tags: payments processing, lockbox services

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