Under The Microscope
Higher Income, Higher Deposits
SAN ANSELMO, Calif.-There is a relationship between changes in total deposits and per capita income, according to new analysis from Market Rates Insight.
In the five largest deposits' Metropolitan Statistical Areas (MSA), Market Rates Insight said there is a "strong and significant relationship" between the two variables.
In the past five years, total deposits in the MSAs of New York, Philadelphia, Chicago, Los Angeles and San Francisco increased by a range of 17% in the Los Angeles MSA to 72% in the Philadelphia MSA. Over the same time period, per capita income increased by a range of 9% in the Chicago MSA to 14% in the New York MSA.
"Although this analysis can't tell us if more people are saving or some people are saving more," said Dan Geller, EVP at Market Rates Insight. "These findings indicate that savings is growing regardless of changing demographics in these metropolitan areas."
The analysis was conducted with data from the FDIC and the U.S. Census Bureau, MRI said. The per capita income consists of actual data from 2005 to 2009, and a preliminary projection for 2010.
For info: www.marketratesinsight.com/docs/NPI1.10.11.PDF
Small Biz Confused On Online Banking
BOSTON-The small business online banking space is fraught with confusion, as banks are still struggling with whether they should offer small business customers consumer online solutions, dedicated small business solutions, or even corporate cash management offerings.
Those are the conclusions of a new report, "Evaluating the Vendors of Small Business Online Banking Solutions: Solutions for Small Banks and Credit Unions," from Celent, a financial consulting firm.
Celent said banks have not invested enough in small business specific online banking services and need to take several steps, including:
1) A thorough segmentation exercise that will determine where the small business customer fits. This is easier said than done; the firm said, as there is no simple and straightforward segmentation formula (e.g., split by revenue, number of employees, etc.).
2) Invest in a small business solution that provides dedicated small business features and a customized experience. Small businesses require tailored services and an experience that takes into account their banking needs and comfort levels.
The report examined 13 small business online banking solutions across 11 vendors: ACI Worldwide, First Data, FIS (Business eBanking), FIS (Online Banking), Fiserv, Fundtech, Harland Financial Solutions, Intuit Financial Services, Jack Henry and Associates (NetTeller), Jack Henry and Associates (TeleWeb), NCR, Q2 eBanking, and S1 Corporation.
No single vendor swept the top spot across categories, and Celent said there is still a clear split in the grid when evaluating advanced technology compared to breadth of functionality. The firm said it was "disappointing" that the majority of vendors in this roundup "have done little with regards to innovation and customer experience since our last evaluation. While most have added subtle features to their offering, the majority of products look like they are still stuck in the 1990s. None of the vendors in this roundup have found the silver bullet. The small business online banking landscape is ripe with opportunity."
Celent said the opportunity exists for one or more vendors or financial institutions to build out a comprehensive solution.
For info: www.celent.com
Global Payments Standard Explored
DES MOINES, Iowa-The once-perceived improbable-EMV (the standard for interoperation of IC or "Chip cards") in the U.S.-has gained new steam as the American payments industry re-examines the issue.
In a newly released white paper, Aris Jerahian, VP-client relations for The Members Group, takes a look at the drivers behind what many are calling an inevitable U.S. adoption of EMV to support chip-and-PIN technology. "There are indications from several ends of the payments industry spectrum that U.S. adoption is considered likely-if not inevitable," Jerahian said.
Jerahian describes how American financial institutions can learn from early U.S. adopters, such as TMG client United Nations FCU, and lays out the four questions every financial institution should ask of its processing partner before following suit.
TMG is a CUSO that is a wholly owned subsidiary of the Affiliates Management Company, which is owned by Iowa credit unions and their members.
For info: www.themembersgroup.com/EMVglobal.
Portals Can Rejuvenate Online Banking
SAN FRANCISCO-Integrating personal finance management (PFM) platforms will enable financial institutions to revitalize online banking, build customer loyalty and make their websites the go-to place for customers to manage their money.
Those are some of the findings of a new Javelin Strategy Research report, "2010 Personal Financial Management Competitive Analysis (Part 2): How 10 Top PFM Vendors Are Redesigning Online Banking."
The consultancy said it performed a detailed competitive analysis of online-banking PFM products and named Yodlee Best in Class for the second consecutive year, with Fiserv and Intuit Financial Services placing as strong contenders.
Javelin said PFM should be integrated into online banking from the login, not hidden on a tab. Successful PFM includes such elements as consolidation of account data, goal fulfillment and a mobile pathway. PFM should have a look and feel that invites customers to think more deeply and frequently about their money and must also centralize basic banking chores.
"Financial institutions have the opportunity to use PFM to fundamentally change how customers think about their money," said Mark Schwanhausser, Javelin senior analyst, noting institutions can use the data to better understand their customers and identify cross-sales opportunities.
For info: www.javelinstrategy.com