I recently attended the Net.Finance conference in Chicago . It is, by far, one of the best conferences for those of us focused on the digital channels of financial services. Over the two and half days, there were three topics that dominated the event: Mobile, Personal Financial Management (PFM) tools, and Social Media. I'm going to specifically talk about the first two topics.
The first day of the conference focused on Mobile Banking services for customers. Jeff Dennes, SVP Chief Digital Officer of Huntington National Bank (and formerly with USAA), gave the Keynote address. His presentation was full of interesting observations including:
- There are over 285 million mobile subscribers in the US, a 91% penetration rate.
- 13.2 million people accessed their bank accounts through mobile sites, up 70% from a year ago.
- The expansion of the 4G network over the next 2 years will increase bandwidth equal to a cable modem at home.
- Mobility is driving convergence. The gap between the traditional web and related services is closing, with the increase in smart phones and the movement of the Gen Y's into the workforce.
Jennifer Wilson, SVP Internet Channel Director, BBVA Compass shared her experience with the introduction of ZashPay, a Person to Person payments service from Fiserv. From an adoption perspective, they found that building a web page with a simple enrollment process was key. When they looked at the user base, they found a surprising number of small business customers who were using as an alternative to more expensive ACH services. Given these pilot results, they may develop a mobile invoicing service for their business customers.
We rolled out our Mobile Money offering in August, 2010 and have seen a significant adoption rate. Mobile continues to be a hot topic among financial services providers and may prove to be the most signficant game changer in the next couple of years.
On the second day of the conference, I was fortunate enough to be part of a panel discussion on Personal Financial Management (PFM) along with Patrick Smith of Wells Fargo, Eric Connors of Yodlee, and Edward Chang of Strands. We had a lively discussion about the benefits of PFM for our customers, the challenges of getting people to use it, and the pros and con's of aggregation services. While the benefits are pretty clear (better financial management) the biggest challenge, as noted by Patrick, is inertia. Managing your finances is certainly important, but not critical. Setting up goals and budgets falls somewhere around cleaning out the gutters on the "to do" list. The key, perhaps, is to help educate the consumers about the benefits to make it move up that list.
One of the classic differences between 1st Mariner and Wells is the approach to aggregation. Wells provides tools that help manage those accounts that are with Wells while we offer a service (Mariner360) to add all your accounts, even from other institutions. Perhaps this highlights the major difference between big and small banks. We see this as a service that is the right thing for the customer, while they look at it from an internal perspective of what is right for the organization. We (of course) think ours is the better approach.