Tag Archives: FinTech

June 12, 2014

Fitness apps are great model to help consumers talk about money

By ericdunstan

Eric DunstanThis past weekend I attended a beach wedding in Santa Cruz, CA. I played the role of husband to the matron of honor and father to the ring bearer. I spent a lot of time with the groom and groomsmen as we waded through the schedule from taking pictures to the bride walking down the sandy aisle. Having never met 90% of these people, most of the idle conversation topics focused on how long we’ve know the groom/bride, where we’re from, the weather, sports and physical fitness.  The wedding party was a very physically fit group and a lot of time was spent discussing work out routines, fitness goals, injuries, metrics for measuruing those goals and what mobile fitness applications were used. One groomsman was a tri-athlete, another a cyclist and several runners…me included. Even though we all did different sports, we all shared a common language around how we set goals and measured success; how many reps/sets, timed distances, time splits, calories burned. Of course, as the day wore on and the drinks flowed, these reported metrics achieved super human status. “I ran a marathon in under two hours, backwards…uphill both ways. In the snow. Waiter, can I have another Grey Goose?” The common interest and shared vocabulary of fitness enabled 8 guys to have a great time at a wedding.

There continues to be a lot of media coverage about our lack luster economy and the fear that many people have about their financial fitness. The fear has grown to a level where many books, websites and personal finance management services have emerged to meet the demand. Clearly, money and sound financial management is top of mind for most people. Unfortunately, talking about ones financial health is a taboo that it is never discussed openly even with close friends or a spouse. I openly discussed my physical health at the wedding last weekend…but it would be WEIRD and AWKWARD if I discussed my financial goals and health with the other groomsman. Why? Isn’t financial health just as important as physical health? We ask others for suggestions on improving our physical fitness.  Why not our financial fitness?

Alexa von Tobel, CEO of LearnVest, addresses the taboo of talking about personal finance in her book, “Financially Fearless“. “We openly talk about everything else, from sex to diets to politics, yet when was the last time you spoke with your friends about money?” I think Alexa is spot on. We as a US society DON’T talk about money and how to manage it well. Most Americans prefer to put their heads in the sand and not think about financial planning for it’s too scary or confusing. One of the biggest reasons we don’t talk about money is that we don’t know how and we don’t have a common vocabulary or framework to pull from.

Eric Dunstan

Flexscore is working to provide that financial framework to enable the conversation. They have developed a methodology that helps consumers assess their financial health through a score and provides support for how to improve. The score measures factors including assets, debt, savings, cost of living, retirement savings…and weights them against a goal. Goals include by what age to retire, buying a vacation home, or sending a kid to college. Flexscore users can compare their goals, expenses, and scores against others within their peer group.

What Flexscore is developing sounds a lot like a fitness app! I am an avid user of the Nike+ iPhone app where I set goals, track fitness activity, achieve milestones…and compare against others. The Nike application also let’s me challenge others to a race or to ask others for coaching advice. Wow, this is a fun way to track fitness activity and engage with friends. Can the same level of engagement be achieved with a financial fitness application? Through the right approach, I think a financial fitness application can be very powerful in helping others discuss money, goals and questions they may have about improving compared to their peers. A scoring system, such as Flexscore, will be a key engagement element that makes measurement informative, fun and something that can be easily discussed with others.

I don’t think it’s a stretch to envision similar personal finance discussions happening with the right measurement tools and applications developed on mobile devices. Going back to the wedding I attended, the wedding party was quick to whip out their phones and show off their fitness data on Nike+ or RunKeeper. The application UI makes the data visually fun to show off and discuss. I can easily envision the same conversation happening around finance applications. The conversation could start with a groomsman saying, “We are really trying to pay down our credit card debt, but it’s not happening fast enough.”  Another groomsman could respond, “I’ve been using this great finance app that scores my financial health. It’s helped me A LOT.”  The conversation goes on from there.

Driving adoption of these finance apps by going direct to consumer will be quite expensive and the marketplace is crowded. However, I think the right strategy for Flexscore is to white label their solution to financial institutions and advisors. A similar platform, Set for Life,  takes another approach by white labeling financial education and money management tools to corporations as a benefits program to get employees to start talking about their money. Flexscore and Set for Life hope to pull through a solid customer base through these white labeled partnerships …while receiving a monthly per user fee. Smart…and this strategy does not require aggressive and expensive direct to consumer acquisition programs. The right clients and partnerships will build a large and highly engaged consumer base for both companies.

As Gen X , Gen Y and Millennials age, the greater the momentum around having financial oriented conversations. The key play for companies like Flexscore or Set For Life is to be the platform that these users engage on to discuss and engage with their finance. Consumers will benefit and so will financial institutions and advisors who are looking for opportunities to engage customers. Consumers will be drawn to the banks and providers who do this best.  Those who don’t engage at this level will watch  their consumer base walk out the door.

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May 23, 2014

eBay cyber attack highlights value of card on/off tools

By ericdunstan

eBayEbay is yet another giant consumer brand that has fallen victim to a cyber attack. Like many of us, I raced to change my password when I heard the news break early Wednesday morning. Of course the news media and many eBay users assumed the worst had happened and that personal and financial information had been breached. Fortunately, the attack was limited to a corporate network and only a small amount of employee login credentials were breached. EBay’s PayPal business unit did not show evidence of user personal or financial information being exposed. Few.

Given the frequency of these high profile breaches, it seems like only a matter of time before hackers are able to break into the networks of the most trusted consumer brands and financial institutions. Target experienced a massive breach late last year that many consumers are still dealing with today.   High-end retailer Neiman Marcus experienced a breach as well. Larry Ponemon, chairman and founder of the Ponemon Institute, which specializes in data-security issues, said “It shows that even the best of Internet sites are vulnerable to cyber attacks … you can’t stop this tidal wave.”

Yikes! What are consumers to do?! Even the perceived most secure websites, businesses and financial institutions are vulnerable to cyber attack. I think the best form of protection is to empower consumers to control when, how and where their credit or debit card data is used. If consumers can limit the use of, “turn off” or block the use of a card, they are empowered to protect themselves from any resulting damages from these cyber attacks.

Ondot Systems provides one of the most compelling solutions to help consumers take control of their payment cards.  The Ondot solution lets consumers…

  • Turn a credit card on or off
  • Limit the use of a card to a specific retailer or spend category
  • Limit card use to an area near them or to a specific geographic region

Ondot SolutionsThe eBay cyber attack highlights the consumer value of Ondot solution    Imagine that you were a victim of a data breach and that your credit card information may have been sold on the black market. Sadly, this is the case for millions of US consumers. The Ondot solution empowers you to prevent any fraudulent transactions should a fraudster purchase your data and attempt to buy things on or offline. For example, upon hearing about the breach you could easily turn off the card immediately giving you extra time to determine if it’s necessary to cancel the card. Or, if you limit card use by geo proximity to you, use of the card will be denied to any cyber criminal across the world attempting to purchase items. You are empowered to protect yourself from fraudulent payments BEFORE they even happen. That’s cool.

Ondot Systems does not provide a direct to consumer solution. They are actively pursuing relationships with the major payment processors and financial institutions to white label the technology. I’m wondering though if this technology is relevant enough that consumers could actually ask their bank card providers for it….or be willing to switch to a card provider who has this technology deployed already. The Ondot solution could prove to be a strong differentiator that may attract many new customers to a bank’s credit card offering.   With the increase in data breaches, I’m hoping my bank will provide this functionality soon. If not, I am open to learning more about who does offer this technology.

Ondot has the wind at its back now. However, this technology is not new and competitors have built similar solutions. From what I understand from my patent attorney friends, this technology is not particularly defensible for there are many ways to skin that technology cat.  Meow.  Ondot must build strategic partnerships with the largest payment processors first to grow market share…and do it quickly.  These processors will pave the way to deploying to small and mid tier banks.  Ondot’s big hurdle will be in how easily the solution is deployed at the bank.  As we know, these smaller banks get heartburn if a solution integration requires a big internal commitment.  However, it appears they have addressed this hurdle with seamless integration into the universally accepted payment standard and with deployment support. Once deployed, Ondot’s next challenge will be in how well they engage these banks in co-marketing the solution to the consumer.  Many mid and lower tier banks run lean on marketing so the key here will be how to take advantage of current marketing channels to drive adoption.  However, I have a feeling consumer word of mouth may be the most effective channel.

Ondot is a formidable competitor and is well positioned to be the market leader.  Now it’s about how well they execute.

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May 21, 2014

Flexscore makes it easy for consumers to evaluate financial health

By ericdunstan

Earlier this month I got an email from Credit Sesame enticing me to return to their site and see how my credit score has changed. I created an account over three years ago when my wife and I were in the hunt to buy a home and needed a sense of our credit score to get pre-qualified for the loan. However, after we got approved, we’ve had little need to check our score again…until I got the email from Credit Sesame with the subject line “see how your credit score has changed.” The competitive side of me was immediately activated and I logged into Credit Sesame. Fortunately, my score went up….however I do not know why. Beyond the home purchase, my credit activity has been the same as it ever was (Talking Heads anyone?). If anything, the cash component of our financial health has become softer AFTER the purchase. Credit scores don’t measure financial health…only credit worthiness…using a process NO ONE UNDERSTANDS! Beyond affecting the ability to borrow, the credit score has a limited use.

We are all engrained in the United States to care about our credit score. We all know our own score (roughly) and understand the influence it has for us to borrow money. However, the score fails to measure other important factors that influence how much money we can borrow: cash on hand, savings accounts, equities, retirement funds, etc. These are all factors that define our financial health. However, there is no similar scoring tool to help us measure our financial health. I think a financial health score would be much more relevant for consumers as it is a data point that helps discern where they stand in relation to life’s big financial pressures including qualifying for a loan or understanding how much money they need to retire.

Screen Shot 2014-05-21 at 1.51.15 PMFlexscore is a innovative FinTech company that is trying to do just that; provide a service that gives consumers insight into their financial health through one score. Their consumer site is now live and they are touting a base of 30K users.Aside from the challenges, Flexscore has even greater opportunities ahead.

The potential big win for Flexscore is their unique ability to build a technology that produces a “score” relevant for consumers, financial planners AND financial institutions. Flexscore recently presented a new solution at FinovateSpring that helps financial planners provide this score to their clients. This is interesting for it gives the advisor and client a unit of measure that they can BOTH understand.Yes, it may be a challenge to get enough advisors to adopt the Flexscore and trust the methodology behind it. I think there is opportunity here for Flexscore to gain traction if financial advisors at banks and lending institutions adopt the scoring.   By engaging customers in conversations about their financial health, banks are able to build deeper customer relationships and their pool of potential clients to lend to. Remember banks make their money off mortgage lending. This deeper consumer relationship will also ease the torrid lending process for the bank will have record of the consumers’ financial health and documents on file. Banks will be lending to a known and assessed borrower….insuring a much faster approval process. A faster approval process means a happier customer!

Screen Shot 2014-05-21 at 1.48.23 PMI’m envisioning a financial advisor saying, “Mr. Dunstan, if you achieve a Flexscore of 780, you will be qualified for a great mortgage or refi rate of X%. Let’s see what we can do to get there.” Boom. The reason for having a Flexscore is directly relevant for me as a consumer….and I’m now engaged in a relevant conversation with my banker. This conversation becomes a collaboration in which the bank is “selling” me another loan. Another conversation could focus on my retirement planning with my bank’s financial advisor. “Mr. Dunstan, to retire at 65, you need a Flexscore of 950. You are a ways off from 780. Let’s see how we can get you to your goals.” The Flexscore is now the centerpiece of all future financial planning discussions and compass to the banking products needed to achieve the goals.

By enabling banks to make more money off their customers, Flexscore can quickly drive adoption of its more complete financial health scoring method. Banks will pull consumers through the scoring process for it’s relevant for conversations already happening. Consumers are well primed to understand the relevance of this score and may even take action to improve with the right incentives. Hmmm….I can feel another blog post brewing about gamification of this process. However, if Flexscore decides to push this score directly through the consumer channel, building adoption and relevance may prove more costly. As we know, driving consumer awareness and adoption in this noisy world will be expensive for them. Additionally, convincing a typically very tepid consumer to care about their financial health “score” will be challenging too. Remember, consumer adoption rates for personal finance management solutions are typically very low (sub 5%)…which means getting consumers to engage with their money is REALLY HARD.

Keep an eye on Flexscore. I think with the right partners and clients Flexscore could redefine how we as consumers evaluate, measure, improve and discuss our financial health…and with so few Americans adequately prepared to retire, these conversations need to be had earlier in life.

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May 9, 2014

How can a remote control for credit cards create value for consumers and banks?

By ericdunstan

Last week I attended FinovateSpring in San Jose. I was excited to see the latest innovations around mobile payment technology from companies including Loop, Quisk, WePay and Red Giant. However, I was most intrigued by what Ondot presented and the value the technology provides to consumers and to financial institutions. Their technology was so well received last week that Ondot won a Best of Show award.

Screen Shot 2014-05-09 at 10.48.15 AMYes, there has been a lot of activity within the digital wallet space to improve card security or reduce the number of cards one needs to carry. Coin, for example, enables users to consolidate all their credit and debit cards on to one “smart” credit card. Think Swiss Army Knife…but just for your cards. The user selects which card to use by activating it on the Coin device…with the other cards remaining turned off. FinovateSpring presenter, Red Giant hopes to replace all the cards in consumer’s wallet with a “smart” card that can be turned on to make purchases…to then be turned off when not in use or if it’s not in the close proximity of the userI think what Ondot presented takes the card management and security technology features and benefits one step further in meeting the needs of the consumer AND the financial institutions. Ondot launched its Mobile Card Services…or putting it simply, it launched a technology that enables a user to remotely turn on or off a payment card from a mobile device.   There is no need to carry around another device or card. Ondot is controlled by the one item weall carry with us….our phones. The implications of this technology are HUGE for consumers and for banks.

Consumers now have the opportunity to control when, where and how a debit or credit card is used. Thinking this through a bit, this technology in effect helps prevent fraud or spending abuse before it even has a chance to happen. It puts the cardholder in total control of all cards in the purse or wallet! That is GREAT!!!!!

For example, let’s say your wallet or purse (or Coin device!) falls out of your hands and all your credit cards are now in control of a nefarious individual. The Ondot solution can be used to sense that your card is no where near you and turns off the cards before the potential criminal is able to run to Best Buy and buy a TV. Or, let’s say you give a credit card to a son or daughter attending college and you want to limit the type of spending to just books and school supplies…and not to spending at bars and restaurants. If your child tries to charge a $100 round of drinks on Friday night the card will be denied for payment. Sigh…hopefully your child is good at washing glasses to pay the bar tab!

Ondot benefits for banks are equally as exciting. For example, offering this remote control feature will be a big point of differentiation for card issuing banks. I can’t think of any bank within the SF Bay Area that provides this feature….without having to actually cancel the card. Secondly, the technology helps consumers reduce exposure to fraud…which in turn helps banks and card issuers reduce charge backs. Lastly, if integrated correctly on the bank’s website or mobile app, the solution creates another touch point with consumers who regularly manage and check their cards. There will be A LOT of opportunities for the card issuing bank to learn about spending patterns and to cross sell these users to other banking products. This feature could get customers to return daily to the branded mobile app to manage their credit cards.

The big challenge for Ondot will be how easily will these features be integrated within a financial institution’s current online and mobile banking platforms. Ondot will no doubt be exploring strategic partnerships with the platform providers to help springboard distribution and adoption. The Ondot product team will also be looking into how the solution can be integrated through APIs…which will be a key requirement for the mid and lower tier financial institutions.

Ondot will be one to watch!

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May 7, 2014

FinTech fun had by all at FinovateSpring

By ericdunstan

Screen Shot 2014-05-07 at 10.52.30 AM

I had a great time last week at FinovateSpring live blogging for Money Summit.   There were so many great technology demos presented and a lot of great networking was had by all. This was my fifth Finovate event and it was great to see many familiar denizens of FinTech and to meet many new innovators. According to the Finovate team, this event was the most attended ever with over 1,200 people fitting into the City Nation Civic in San Jose.  Hopefully my co-blogger, Brad Leimer and I were able to provide insightful comments and perspective to what was presented during those two days. Please feel free to Tweet questions to Brad (@leimer) or to me (@ericdunstan) and we will do our best to respond as quickly as possible.

Congratulations to the FinovateSpring Best of Show winners

  • EyeVerify
  • Loop
  • Interactions
  • Motif Investing
  • Ondot
  • PrivatBank
  • SaveUp

Personally, I was most excited by what was presented in the mobile payments, virtual CRM, and digital banking technology verticals. Look for future posts for my perspective on presenting companies in each vertical.FinovatePic

As far as the Best of Show winners go, I was very impressed by what EyeVerify, Loop, Ondot and PrivatBank presented.

I will continue to contribute to the Money Summit blog. I will post links to content I produce. Or, better yet, add Money Summit to your “FinTech” news feed on Feedly or Flipboard.

I hope everyone had a safe and easy trip home and is having a productive week.

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April 28, 2014

It’s time to get things started at the Finovate show!

By ericdunstan

I have a strong background in theater arts that has always influenced how I deliver presentations or evaluate events that I attend. Some presentations and events have flash and sizzle (think CES)…while others are snooze festivals sponsored by Sleep Train. I can’t help think how a CEO’s presentation could be more impactful if someone played the “I am Mighty Mouse and I here to save the day!” theme before he or she walked on stage to deliver the new turn around strategy. He he.

Mostly these musings are simple forms of cerebral entertainment to keep me awake during long meetings. Face it, we all dread going to long presentations that we tune out after the first hour as we regularly login to check email on our laptops. It’s a delicate balance between getting the message across and creating a level of entertainment that engages the audience to receive the message.

The show gets started tomorrow for FinovateSpring in San Jose. Finovate is one of (if not THE) leading FinTech innovation shows in North America and Europe. Like many show attendees, I’ve been to several Finovate shows and love the excitement and energy the format creates and seeing innovators get up there and sell sell sell their innovation. Obviously there is a great deal of networking that goes on their too as innovators seek the right strategic partner to grow the business, technology and customer audience.

I wonder what would happen if the Finovate team started the next event in a slightly different manner. Instead of the standard welcoming remarks and sponsor thank yous, could Finovate be opened with a musical number to energize the crowd and alleviate the tension of the presenters?

I always enjoyed the opening song (or “number”) of The Muppet Show that introduced their host and kicked off a series of great skits. Could a similar song and musical number be done for Finovate? Would Statler and Waldorf like it? Would the audience boo and hisssss?  I think it’s worth a shot.  Afterall, we are together for two days and have a lot of ground to cover!  Let’s have some fun!

The Finovate Show Theme Song

(Drum Roll)

It’s the FinovateSpring Show with our Very Special Host, Eric Mattson

It’s time to play the music

It’s time to light the lights

It’s time to meet the FinTech Innovators on the Finovate Show tonight.

It’s time to put on makeup

It’s time to dress up right

It’s time to raise the curtain on the Finovate Show tonight.

Why do we always come here?

I guess we’ll never know

It’s like a kind of torture

To have to watch the show

And now let’s get things started

Why don’t you get things started?

It’s time to get things started

On the most sensational innovational inspirational Finovational

This is what we call the Finovate Show!

I am very excited to attend the event tomorrow as a guest blogger for the newly launched Money SScreen Shot 2014-04-28 at 1.55.33 PMummit blog produced by MoneyDesktop. I will be providing commentary with fellow Fintechy, Bradley Leimer throughout the two day event. In keeping with the Muppets theme, Brad and I will be a MUCH kinder and more professional version of Statler and Waldorf of sorts.  We are looking forward to a great event!

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April 21, 2014

Avoiding the boom-chickaboom clubs at Finovate in San Jose

By ericdunstan

I have attended several Finovate events over the past few years in their exotic 🙂 locals of San Francisco, New York, London and Singapore. As a denizen of the south end of the San Francisco Bay Area, I was surprised and excited to see that the next FinovateSpring event will be hosted in San Jose at the City National Civic.

Screen Shot 2014-04-18 at 11.59.10 AMSan Jose is roughly 50 miles south of San Francisco and has long time positioned itself as the capital of the famous (if not infamous) Silicon Valley. San Jose is home to many tech giants including eBay/PayPal and Cisco. Apple, Google, Yahoo and Facebook are located in cities just 20 minutes up the 101 or 85 freeways. San Jose is also home to the San Jose Sharks who are snapping at the heals of the LA Kings in divisional play offs.

Even though the San Jose area is home to many world famous brands, technologies and teams, it is NOT a booming cultural mecca of historical sites, tourist attractions and a bustling night life. In fact, the downtown San Jose area rolls up the sidewalks after work hours and most restaurants close down around 9pm. Unfortunately, any nightlife is limited to the standard “boom-chickaboom” type clubs that blare “Rhythm of the Night” on a speaker turned up to 11.  Yes, I’m aware that I’m mashing together several pop culture references here.

So where to go and what to do when we all descend on San Jose for FinovateSpring on April 29 and 30? For starters, I’ve listed below a series of local restaurants that are great to host business dinners at and are within walking distance of the Civic.

Original Joe’s  – Does not accept reservations and good for smaller parties.

Il Fornaio – Accepts reservations and hosts larger parties.

The Grill – Accepts reservations and hosts larger parties.

Firehouse – Accepts reservations and hosts larger parties.

There are a few options for after dinner entertainment…but they are limited. The San Jose Sharks will be in Los Angeles unfortunately. However, there may be something happening at the SAP Center worth attending. The nearby Hotel De Anza and the Fairmont Hotel hosts jazz musicians in their lobbies most nights for something more low key.  However, avoid the bars and club scene in downtown San Jose.  There was a fatal stabbing at a bar just last week…and it even happened on a night early in the week.

Screen Shot 2014-04-18 at 12.00.19 PMAs a resident of the south bay area, I recommend visiting the nearby town of Los Gatos. Los Gatos is a small town tucked to the side (map) of the Sillicon Valley and is a 15 min drive or cab ride South/West of San Jose. There are several great restaurants in the downtown area and many interesting bars for after dinner drinks and strategy sessions. “Rhythm of the Night” is seldom heard.

I’ve listed my favorites based on personal experience. I recommend making reservations at all restaurants for each is well known in the area.

Restaurants

Nick’s

Cin Cin

The Lexington House

Bars

Carry Nations

C.B. Hannegan’s

The Black Watch

Cabs can be hard to find in the area so ask the restaurant/bar host to call one for your party.  Keep in mind that Los Gatos is also a great town to just walk around in too.  If you are into exotic cars, the Los Gatos Luxury Cars  dealership has a store on Main St where one can drool over Aston Martins, Bentleys and Lamborghinis.  There are also several gift shops and clothes boutiques to purchase a peace offering for the home front. There is an Apple store too in case you forgot your iPhone charger at home.

I hope you enjoy FinovateSpring and have a chance to explore the Silicon Valley.

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April 1, 2014

Mobile payments innovators must eat more fast food

By ericdunstan

Like a good citizen of the FinTech community, I downloaded the major payments apps to my iPhone including PayPal, Square and Dwolla. I also searched for opportunities to add loyalty cards to my phone’s Passbook. I deposited a small amount in each payments app and added my Starbucks card to Passbook eager to make a payment with my mobile device. Unfortunately, each of these payments apps and features remain unopened after a year from downloading. I have not been successful in finding stores in my local area that accept payments from Square or PayPal or have a loyalty card compatible with Passbook, aside from Starbucks.   To make matters worse, I typically just open up the Starbucks app directly and avoid Passbook all together!  Clearly the mobile payments or wallet value chain is broken and innovators are struggling with defining how customers and businesses want to use the mobile device to drive their purchases.

Screen Shot 2014-03-31 at 3.45.39 PMThose of us who follow FinTech closely are well aware of the struggle for defining the mobile wallet correctly. “Wallet” is a loose term these days.  Most people believe payment apps are wallets even though a wallet typically includes feature or cards beyond just payment tools.  If this wallet perception is true, then why are apps like Square and PayPal NOT the driver of mobile wallet ubiquity? I think getting closer to the correct definition of the mobile wallet requires us to pay close attention to what’s happening at retail…specifically at the fast food franchise level.

National fast food chains such as Burger King and Wendy’s are launching mobile apps that enable customers to order and pay for food using a credit card.  These apps are retailer specific mobile wallets that will enable the brands to build deep customer relationships by understanding buying patterns to then reward customers with specials offers and discounts. Frankly, I’m a little surprised it has taken the fast food guys so long to build and launch these apps. Starbucks has been doing this for over two years. Over the past few years Starbucks has clearly won my loyalty as they guide my purchasing through bonus star offerings. There are significant implications for mobile payments innovators if the Burger King and Wendy’s apps are widely adopted and are successful in generating more revenue and creating deeper customer relationships.

First of all, consumers are saying they want brand specific apps that enable them to pay and reward their loyalty. Think the Starbucks app.  These mobile applications are essentially loyalty cards.Screen Shot 2014-03-31 at 3.44.39 PM Secondly, consumers are also saying they are willing to pay with their credit card through the application…and don’t need a new payment platform. For example, the Burger King and Wendy’s applications require the consumer to enter in credit card information upon sign up to make purchases. The consumer makes purchases on the same Visa, Mastercard or AMEX platform used to make all their online and offline payments. These mobile payments will also be covered by the policies defined by each credit card to protect against fraud. Given the entrenched credit card payments system and fraud protections, there is really no consumer need to sign up and manage another payment platform.

Brands and retailers will be monitoring closely the success of these fast food applications. If these applications continue to be effective payment empowered loyalty cards, what role does the mobile device play?  Similar to a real wallet, the mobile device is the holder of the many branded loyalty and payments apps.  Does this put the mobile devise in a unique position should these retail brand specific apps be successful?  Yes, for the mobile device IS now the mobile wallet.  No one should have a heart attack and die from digesting this concept.  It’s nothing new and is a recurring theme a several mobile payments conferences.  Daniel Mattes, the CEO and founder of Jumio, articulated his vision for the mobile device as a wallet at Money2020.

However, there has been such focus around the mobile wallet being an individual application that many people think of Square and a few others as being wallet innovators.  This is starting to change as people digest what Apple may be doing in the payments space.  Thinking this through, Steve Jobs may have had a similar vision. Passbook is a feature to store tickets and loyalty cards. It’s not a stretch to envision storing encrypted credit card information and ID on the device. I think it’s safe to assume that Apple will not be entering just the payments business….but will most likely be defining and enabling the iPhone to be a true digital wallet. Expect Samsung to follow a similar strategic path.

The big question will be how long it will take for the mobile payments vertical to evolve to this point. A lot of money has been invested in Square, Flint and PayPal to invent another platform. However, Visa and Mastercard will be active and well funded suppliers in the mobile payments war. It will be a matter of time until the right mobile device features emerge that enable the major credit cards to easily plug themselves in to mobile transactions. Once the right device feature emerges, the mobile payments vertical will be locked up quickly.  Unfortunately, this means many payments apps will become part of those “hey, do you remember….” so common at cocktail parties.

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March 18, 2014

Why the Moven MoneyDesktop partnership is now a hot tango

By ericdunstan

Image

Last week Moven announced an expanded strategic partnership with MoneyDesktop.  The two companies have been dancing together for a while.  However, this recent move changes their dance from a waltz to a passionate tango.  To refresh memories, Moven is a disruptive and leading innovator in the mobile banking space. MoneyDesktop is a cutting edge developer of personal finance management (PFM) tools and eye-popping UI.  Together, Moven and MoneyDesktop bring unique and compatible assets that when combined will ignite the FinTech “dance floor.”  Vavoom.

The recently announcedpartnership is focused less on providing a dazzling user interface and more on a back-end feature that will make the Moven value proposition even more relevant for consumers.  Moven will use MoneyDesktop to aggregate financial information from external accounts.  Conversely, MoneyDesktop will gain access to a growing consumer audience who is willing to leave their current bank for a financial institution that provides a better mobile banking experience.

MoneyDesktopMoneyDesktop continues to win awards at several FinTech conferences for their innovative solutions and clean functional user interface design.  The primary buyer groups of their technology are online banking executives at mid and small tiered financial institutions.  MoneyDesktop is boasting that over 400 financial institutions and 29 online banking, core and payment network providers use their technology.  However, each of their clients is an “old school” FI striving to update their online and mobile banking experience to avoid losing customers.  A relationship with Moven enables them to partner with an innovator who is proactive in acquiring new customers by building a strong mobile banking experience from the ground up.  MoneyDesktop is well positioned to benefit from the mobile banking revolution.

Moven also continues to win awards and provide groundbreaking mobile banking technology and services.  Moven’s solution is driven from the mobile device and offers features of major banks….without the fees.  However, like the other mobile bank innovators, like GoBank, they face the hurdle of acquiring enough users to scale their business.  Let’s face it,  all of us have accounts with the major banks.  Telling a customer to drop any current banking relationships they have to join a mobile driven bank is a tough sell.  Moven’s partnership with MoneyDekstop helps address this hurdle.

MoneyDesktop’s aggregation technology is as much a product feature improvement as a customer acquisition tool for Moven.            Consumers can now join Moven and use the solution to track their banking activity with all financial institutions.  Moven becomes the financial hub.  Well-planned cross-sell marketing from Moven will inform users of other great features and tools.  Eventually, the consumer will start to fall in love with the Moven solution and will depend on it more as a primary banking tool.  Well, at least that is the goal.

The key for this strategic partnership will be how well both parties can execute and take advantage of the open opportunities to deliver customer value.  If they do it right, their tango will catch the attention of the millions of unsatisfied big bank customers.  I hope Moven and MoneyDesktop have a big dance floor.

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March 11, 2014

Banks, make account opening easy from a mobile device and win customers

By ericdunstan

SimpleFinancial technology bloggers have written a lot recently about the implications of BBVA’s acquisition of Simple and Facebook’s acquistion of WhatsApp.  I know, what does the WhatsApp acquisition have to do with FinTech?  Industry pundit, Jim Marous, points out that the WhatsApp acquisition points to an ENORMOUS industry trend that sends a huge warning signal to all financial institutions.   That trend, and this should be no surprise, is the significant shift for consumers from the desktop to the mobile device in not only social media, but in banking too.  The warning signal? Consumers want to engage with their bank through the mobile device as the primary channel of engagement.  Banks need to get their mobile house in order or customers are headed out the door, through the windows and maybe even through the ATM.  The most salient mobile app feature that banks must get right to address this trend is account creation.  Banks who make account creation easy from the mobile device will turn the tide …and will attract more customers away from banks who do not embarce mobile.

Marous sites, “While Facebook was built for the desktop and migrated to mobile, WhatsApp was built for mobile first, giving the network an advantage in today’s marketplace.”  Similar to Facebook, a bank’s consumer products and user experience has been desktop based and is gaining momentum to migrate to mobile devices.  I am a Wells Fargo user and have downloaded the mobile app that offers a snapshot into my bank account online.  Aside from remote deposit capture, the application offers very little additional value that leverages the power of my mobile device.  As I’ve mentioned in previous blog posts, there are many FinTech innovators who are creating banks and banking technology that put mobile first.  GoBank, Moven and Simple are prime examples.

The most significant opportunity to drive mobile banking adoption is to fully leverage the camera feature on a  smartphone.  Yes, most banks do utilize the camera by enabling mobile deposit capture and photo bill pay.  However, the camera needs to be enabled for a much more significant  functionality: The ability to capture the PII needed to open a bank account without asking the consumer to key it in using a device key pad.   Without this feature, the mobile channel will always be secondary to the online banking channel where consumers create and manage banking relationships.

Jumio Netswipe

Financial technology innovators Jumio and Mitek  are making great strides in leveraging the device camera to capture customer data. Jumio recently launched at FinovateEurope a technology that uses the device camera to scan an ID and extract the needed PII to open up a banking account. The technology then “deposits” this needed data into a bank account registration form.  Wow.  Cool. The technology addresses the significant consumer pain point of using a tiny device keyboard to open up an account ….which is a process filled with typos, frustration, and high abandon rates.   The Jumio platform makes opening a bank account fast and easy.

 

The mobile camera ID scanning technology sounds great…however, from the consumer perspective I can identify several potential hurdles or concerns that have to be addressed.  Where does the picture of the scanned ID go?  Is the image in my device photo stream?  If I lost my phone, could the thief see this data? If the ID image lives in a cloud, who’s cloud is it?  What happens if the cloud provider is breached?  There are so many questions here that need to be addressed!  One thing is for sure, innovators need to have the data security technology locked down and messaging at the ready to educate customers on why this ID verification technology is safe.  After all, consumers don’t readily distribute copies of their ID to just anyone offline…and it’s no different in the online world.

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