The Self-Service Triple Crown: Social Media, Mobile and PFM
One clue to where banks will be placing their Internet banking bets in 2011 can be found in Geezeo's pipes.
"We have an enormous pipeline with all of the partnerships that we have entered into," says Shawn Ward, CEO of Geezeo, which expected about 20 credit unions and banks to sign up for its white label PFM product by the end of 2010, with an additional 200 slated to come online during 2011.
Clearly, the spending outlook for 2011 isn't universally moribund. If vendor "pipeline" predictions are to be believed, self-service and remote access will be big hits with bank IT buyers in 2011, leading to a huge year for personal financial management, mobile and social media. Joseph Polverari, Chief Marketing & Strategy Officer at Yodlee, the largest provider of PFM enabling technology for banks, says the market's entering "stage two" in which PFM becomes a "Google" of sorts for online financial management. "From the bank site, consumers decide where they want to do and what they need to do next...payments, automated tax preparation, investments...there will be tentacles in all of those areas," he says.
Far from appearing worried about recession-driven cuts in IT spending, Polvarari's champing at the bit for what he hopes will be a favorable environment for Yodlee-which just entered into a developmental partnership with VC firm yCombinator to help other new PFM startups-as banks shop for ways in which they can make the tools part of internet banking.
"Customers want PFM to be more integrated with the online banking experience. Early adopters were comfortable with a new window and a separate site, now we're moving into mass adoption, and people want PFM to work like bill pay," says Ward, noting that Geezeo recently entered into a partnership make PFM a tab inside Fiserv's Virtuoso Web banking platform.
One of the wildcards for 2011 will be the growth of social media. Social media sites themselves are relatively inexpensive to set up, and in some cases are even free. Most of the tech spend will come from analytics software and tracking software designed to tie Twitter, Facebook, blogs and video to targeted customer service and marketing.
Aite predicts that while 30 percent of U.S. and European financial institutions currently do not have a social media budget, that will fall to 10 percent by 2012. Ron Shevlin, a senior analyst at Aite, says that by that time, firms will also be looking for concrete results, as two thirds of firms expect social media to increase customer retention and half expect it to generate revenue.
USAA, for example, is planning to expand its presence in social media in the next year. The military-heavy bank just launched a financial planning portal, and plans to establish online communities.
The bank manages social through a combination of internal IT development and use of vendors, such as BazaarVoice-which helps the bank monitor social media content as part of its marketing and customer service.
"Users are going to be talking about our brand and out products, so why not be a part of that?" says Rhonda Crawford, vp of digital strategy and operations, USAA.
Mobile on the Move
After demonstrating viability over the past couple of years, 2011 will be a big year for mobile, as payments take hold and overall adoption increases. Citigroup, for example, has just pledged $4 billion to its consumer bank to attract wealthy clients, with a large part of the effort being a global platform for Internet and mobile, tech spending funded by budget cuts in other areas.
And efforts to bring mobile banking to corporate clients-already underway at PNC, Citizens and Wells Fargo, are poised to expand across the industry. "Small business customers are viewed as an important segment that banks haven't fully [connected] with," says Christine Barry, a research director at Aite.
Most mobile banking apps will also shed their "skin" in the coming year. "Mobile will transform into a true channel for banking, not just a Web browser. You're going to see banks investing in more applications for the smartphone, such as mobile capture," says Philip Farah, director of the financial services practice at Cisco's Internet business solutions group.
Farah says location-based services become part of many mobile baking apps in the next year or so. These services leverage GPS to enable marketing and loyalty perks in real-time based on a user's proximity to retailers.