Trends In The Banking Industry

Trends in the
Banking Industry
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Presented by: Pierre Cardenas
Feb 12th, 2013
Innovative uses of technology
are re-inventing life as we know
it in virtually every industry.
Etc
.
Branch Banks Need to Fear Upstarts,
Established banks with large branch networks should worry about
technological upstarts grabbing their high-margin businesses.
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You can sense an audience’s reaction as you present ideas on
innovation. Sometimes it’s warm and engaging, sometimes distant
and thoughtful and occasionally remote and cynical.
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BY CHRIS SKINNER - Jan 17, 2012
Innovation is all around us
Banking of the future!
Amazon is about to blow past Best Buy in Revenue
Marketing
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Hand held Touch-Tablets
25+ new tablets in the market
HP Touch Pad
Samsung Galaxy
Motorola Xoom
Blackberry
Playbook
LG Optimus Pod
HTC Flyer
(Andriod)
Samsung Galaxy
Tab
Dell Streak 7
Viewsonic ViewPad
Advent Vega
Exo PC Slate
Asus Ecc Pad
Last year, Apple sold more than 14.8 million of the first iPad - averaging 3.7 million
per quarter. With 70% new buyers, the iPad launch is the fastest human adoption of
new technology in the history of the world. Faster than radio, telephone, TV, cell
phones, and the DVD player.
Avg selling price of Tablets has dropped by 32% since
2010
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Wal-Mart & American Express teamed up to launch a new prepaid
card aimed at giving customers an alternative to checking accounts
and debit cards.
Bluebird can be used all placed American Express is accepted
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No Monthly, Annual or Overdraft Fees
No Minimum Balance Required
Make deposits & pay bills using your Smartphone
You can set up your direct deposit to go directly to your bluebird
account
You can send money directly another person P2P using your
smartphone
* This is aimed at bringing down the rising fees associated with debit and checking svcs
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Android Devise Support Added to CO-OP My Deposit Mobile
Wednesday, March 28, 2012
CO-OP Financial Services is adding Android support for CO-OP
My Deposit Mobile, enabling credit union members with these
popular devices to deposit checks to their accounts from their
phones. “CO-OP My Deposit Mobile with Android support helps
credit unions gain a competitive advantage because many financial
institutions that have mobile products have not yet deployed a
remote deposit function,” said Stan Hollen, President/CEO, CO-OP
Financial Services. “In addition, the new functionally for CO-OP
My Deposit Mobile adds to a credit union’s ability to offer
convenient access to accounts for members, which is what all COOP products are designed to do.”
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Tarrant County CU (Fort Worth) was among the first wave of
credit unions to go live this month with Catalyst Corporate
FCU’s Mobile Capture service.
Mobile Capture, photographing a check and depositing it
electronically from a smartphone or tablet, is the newest
addition to Catalyst’s suite of remote deposit products powered
by Bluepoint Solutions software.
“Apparently, our members are thrilled,” said Karen Knight,
Tarrant County CU’s comptroller. The $67-million-in-assets
credit union introduced its mobile banking service in 2010.
Tarrant County CU, added Catalyst’s mobile deposit function
to the lineup this year “in an effort to be increasingly convenient
to our members,” Knight said. They chose Catalyst to host its
mobile deposit product because they were able to develop and
implement the product rather quickly. Other vendors had not
yet acquired the technology, and we did not want to wait,”
Knight said.
Bank of America announces
dongle-based mobile
payment processing service
Bank of America is the latest to get in on the mobile payment
processing craze. All Things D reports that the bank is launching
Mobile Pay on Demand — a new service that, with its requisite Squareinspired headphone dongle, will allow merchants to accept payment on
mobile devices like tablets and smartphones when it launches on
December 3rd. A free companion app will be available for both Android
and iOS.Like competitors Square and PayPal Here, Mobile Pay on
Demand’s dongle will be free, and Bank of America will charge a 2.7
percent fee per transaction — the same rate as PayPal Here and a
twentieth of a percentage point lower than Square. The latter is
practically synonymous with credit card processing on mobile devices,
handling $8 billion in payments annually, and recently announcing its
first international expansion into Canada. While Bank of America's
move into this market could certainly pay off, its VP of Strategy and
Emerging Products, Trevor Rubel, acknowledged that it isn’t exactly
breaking new ground, telling All Things D "I hate to come out with a
commodity product, but every bank should have one."
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PAYPAL IS ON TRACK FOR 10B IN MOBILE
PAYMENTS
AND INCREASE OF 150% FROM A YEAR AGO.
Monetary Transactions
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Paypal on Track for $10B in Mobile PaymentsPayPal said it
expects to handle $10 billion in transacted mobile payment
volume in 2012, an increase of 150 percent over a year ago.
eBay-owned PayPal's mobile commerce initiatives include
PayPal Here, introduced in March, which enables small
businesses and other users to process credit and debit
transactions by swiping the card through a small, triangleshaped dongle that attaches to their smartphone or tablet. Users
also can access their mobile device's camera to scan and process
cards and checks. PayPal Here charges merchants a flat rate of
2.7 percent per transaction, a .05 percent savings over rival
Square's mobile payment offering.
Walmart & American Express launched “Bluebird an alternative to checking accounts & d
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No monthly, annual or overdraft fees
No minimum balance requirement, although some ATM fees will apply.
Bluebird will also let customers make deposits and pay bills using their
Users can deposit funds onto the Bluebird card in a variety of ways, including via
regular direct deposits from a paycheck, according to Dan Schulman, group president
of enterprise growth at American Express. The card also lets people send money
directly to a customer's account using a smartphone app. The joint effort is aimed at
bringing down the rising fees associated with debit & checking services today!
Jibun Bank: a mobile telephone only
bank
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Since its launch in June 2008, Jibun Bank’s popularity has
grown rapidly and the bank has already acquired more
than 500,000 customers.
Jibun, which means “personal” in Japanese, is the first
bank in the world to use the mobile phone as a primary
access channel.
ING -
Chicago
+
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In 2008, while still in their infancy, both companies had to go through the expensive and time-consuming SEC registration process.
Even though many people were writing the industry obituary at this point both Lending Club and Prosper survived. Today, both
companies are thriving as the industry is gaining widespread support from borrowers and investors alike. With greater than 100%
year over year growth p2p lending is one of the fastest growing investments. Industry volume is now over $50 million in
new loans a month and over the Memorial Day long weekend total loan volume passed the $1 billion mark since the industry
began back in 2006.
Why Peer-to-Peer Lending is Becoming so Popular
Both Lending Club and Prosper continue to see impressive growth
Investors can earn double-digit returns, after several years of low interest rates Institutional investors are
moving in.
1.
2.
1.
1.
Last year institutional investors started moving serious money into both Lending Club and Prosper. There
is now over $100 million in institutional money invested at Lending Club and that number is growing all
the time.
Consumers want to get out of credit card debt. By far the most common type of loan on both Lending
Club and Prosper is debt consolidation. It is a win-win for the borrower and the investors who loan the
money.
Banks are still not lending freely. It is not news that bank credit remains tight. Personal loans are very
difficult to obtain .
The industry is gaining credibility. When one of the titans of Wall Street joins the board of a p2p lender, as
John Mack (former CEO of Morgan Stanley) did recently at Lending Club, it provides a level of credibility
that wasn’t there before. Prosper also announced this year that long time Goldman Sachs executive Eric
Schwartz has joined their board
About ePawnMarket.com
ePawnMarket is one of the world’s largest online pawn shops, an industry leader in asset lending
and the fastest growing title pawn loan company in Georgia. ePawnMarket offers Georgia title
pawn loans on cars, trucks, motorcycles, boats, trailers, recreational vehicles and heavy
equipment. Secure pawn loans using luxury items of value that you already own as collateral
and that can be shipped via Federal Express. U.S. Residents may use luxury watches, jewelry,
handbags, gold, silver, precious metals, collectibles, and digital SLR cameras as collateral to
obtain fast cash safely and discretely from the comfort of their own home. ePawnMarket.com
offers free shipping and insurance on all items you buy, pawn, or sell
Apply, get approved, shop
and buy!
Financial Institutions across the US were rated by their
customers for Quality Service, Loyalty and doing what
is best for them.
#1 with 88% approval rate was USAA
#2 at 76% was Independent Financial Advisors
#3 at 66% was Credit Unions
#4 also at 66% was AG Edwards Financial Services
#5 at 64% was Independent Insurance Agents
How can this be?? They only have one branch in the US!
Here are the top 5 Bank Brands
1.
1.
2.
3.
4.
USAA has managed to become one of the biggest banks in the U.S.,
with around $50 billion in deposits and more than 6.3 million
accounts. They accomplished this with only one physical branch
location.
NAB Bank – launched “UBANK” its internet only bank
Umpqua Bank
First Direct – Online Internet banking (HSBC)
ALLY Bank
(#7 is ING)
So what about the auto industry?
From The Old…
Changing The Model
…To The New
You Touch every loan to find the few that
will fund!
“Needle in a Haystack approach.”
Only touch the one’s you want, the way
you want them, that have the higher
probability of funding. Translated =
Higher book ratios.
Automated Decisioning Model That Works!
What’s Missing?
Your
Criteria
Your
Values
Actual
Decision 1
FICO BK
680700
1
689
1
Time Res Emp $Inc LTV DTI PTI
48
mo
2Yr
2Yr $2,000 100 45
12
48
{
5
6
PASS PASS PASS PASS
$5,000
PASS
101
46
12
FAIL FAIL PASS
Mod
Yr
Miles $Chg-off
%
Cred
Decision
PASS
2003
100K
<$1,000
70% FAIL
2007
45K
$200
30%
PASS
PASS
PASS
PASS
FAIL
Automating Slam Dunk Manual Decisions: Improves Consistency, Quality,
Member Service, Loan Capture and Funding!
[Each iteration is an automated slam dunk, as well as any manual loan decision]
Your
Criteria
FICO BK
Your Values 689
1
Iteration 1
1
Your Values 689
1
Iteration 2
1
Your Values 689
1
Iteration 3
1
Time Res Emp $Inc
LTV DTI PTI
48 mo 2Yr
2Yr $2,000 100 45
12
48
2 Yr
2Yr
48 mo 2Yr
2Yr
48
2 Yr
2Yr
48 mo 2 YR
2Yr
48
2 Yr
2Yr
5000
%
Mod Yr Miles $Chg-off Cred
2003 100K <$1,000
70%
101
46
12
2007
$3,500 105
45
13
2003
46
12
2007
5000
101
$5,000 110 50
10
5000
1
46
15
2003
12
2007
45
100
100K <$1,000
45
100
100K <$1,000
45
100
68
Decision
FAIL
75%
68
FAIL
75%
68
PASS
And you can continue to build Iteration after Iteration - Exhausting all manual decisions for each loan/criteria
Consumer Migration Online Will Continue
Internet is Dominant Research Tool
Consumers Are Comfortable Buying Online
Up from 2% in 2001
Source: CapGemini Cars Online 11/12 study
AutoTrader Notches Traffic Record
]March 9, 2012 | By Auto Remarketing Staff, Chip Perry,
AutoTrader.com enjoyed a record-breaking month in February, reaching an all-time
high for unique visitors, which were up 15 percent year-over-year.
The firm’s marketing campaign helped push it to a 13-percent gain in unique visitors
to the core site and a 41-percent hike in mobile traffic
8 of the 10 strongest days of all time for AutoTrader.com traffic happened last month,
including its best-ever day. For every one of those eight days, the site eclipsed
a 1 million unique visitor count.
The record day was Feb. 20, which saw a unique visitor tally close to 1.1
million.“Our goal is to connect buyers and sellers, and we are thrilled that more
consumers than ever are coming to AutoTrader.com to shop for new and
used vehicles,” stated AutoTrader president and chief executive officer
Chip Perry.“This is an exciting time to be in the auto industry, and we look forward
to continuing to play a key role in the shopping experience and by creating
exceptional value for our dealer customers,” he continued.
Let The Disruption Begin!
• Auto Classifieds on the
Internet
• Generate Leads for
Dealers
• Auto Auctions Online
• Finding Better Deals
• Proven Model: Private
Sale & Free-mium
• Avoiding the Dealer
• Inventory Analytics &
Virtualization
• Pricing Analysis
• Better Search
• Better Functionality:
Condition & Price
Confidence
• Scalable solution:
Solves critical credit
union needs
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System
Statistics
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750,000+ system applications received.
320,000 applications from DM campaigns.
300,000 lender approvals processed.
$1.5 Billion in closed loans.
29,300 eDoc packages served to customers.
Designed for overall scalability.
Remote Channel Focus
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Call Center
Internet
Outbound
Mobile
EXPENSE CONTROL
Inbound & Outbound focused
Data mining for continuous lists is key to a
successful program.
(committed approval = higher success rate)
Build upon your least expensive customer channel
Focus on your members
Increasing Products per Household
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Data mining your current membership base
for lending opportunities you might not have
been taking advantage of before
Steve Jobs said, “Design isn’t about how something looks.
Design is about how something works. And great design can
motivate people to do things.”
Innovation doesn’t have to be about products. It can be about
work flow changes and processes – the way you open
accounts, solve customer problems, handle errors you’ve
made, pay for performance or communicate with customers.
ANY QUESTIONS?
PIERRE CARDENAS
Senior Consultant &
President of IOC
[email protected]
512-619-0545