How Associated Bank Scopes Out Payments Disruption

Payments innovation comes quickly, and often from outside the banking industry, leading Associated Bank to create a special procedure to monitor the tech market and customer preferences.

"Many of these products come and go in a few months; it's difficult to make a decision as to what is right for the customer," says Val Glytas, director of retail payments for Associated Bank, a $24 billion-asset bank based in Green Bay, Wis.

The bank attempts to spot the right payment opportunities by bringing together an intradepartmental group of bank staff and consultants. It adds the input of that group to a version of "voice of the customer" that leverages consumer activity on social media and transactions to build a roadmap that covers four to six quarters, but can adapt as market conditions change.

"Non-financial institutions have the ability to get out into the payments space quickly, and we're in a position of having to do that," Glytas says.

The bank's innovation group meets quarterly, and a collects between 20 and 30 payment innovations or products that have emerged since the prior meeting. These innovations are put through an evaluation process that determines which the bank will implement, which it will further study and which belong in the "boneyard," as the bank calls it.

"These are things that have no place in the near-term future for the bank," Glytas says. He did not say which products populate Associated Bank's boneyard.

One product the bank researched and deployed through this procedure is its prepaid card. The bank is planning to offer reloadable cards, and plans to offer a suite of prepaid products similar to Amex's Bluebird. As consumers combine digital and in-store shopping, a prepaid card that combines with digital financial services will drive new transactions, Glytas says.

"Prepaid will also allow us to spot opportunities to expand our retail payments business," says Brent Tischler, director of channel optimization at Associated Bank.

The bank's foray into prepaid is based partly on consumer preferences, as demonstrated in transactions and social network activity. Based on this feedback, the bank is also refining its direct-to-consumer strategy to integrate browser-based mobile payments. And it has introduced a tablet banking app. "We want to make sure that we have a shopping experience that is tied to the deposit side and lending side," Tischler says.

Associated has also recently expanded its mobile payments reach, particularly in person-to-person payments. Associated recently added Mobiliti, a Fiserv mobile financial services platform that also integrates with other services such as remote deposit capture; and Popmoney, a Fiserv P2P product that works online and on smartphones.

The addition of P2P payments is also part of a broad migration away from paper, Glytas says. The bank's quarterly summits will determine when the bank's P2P initiatives should be combined with its contactless mobile payment plans. The bank is closely studying contactless options such as Near Field Communication chips and Bluetooth Low Energy beacons, which are capturing the interest of a number of non-bank payments companies, Glytas says.

"There is still no common solution around mobile contactless, and that is what we are looking for," Glytas says.

The bank is also considering a mobile wallet, which could grow out of the early popularity of its mobile P2P play, Glytas says.