Monthly Archives: January 2012

Which keeps you up at night: Alternative currencies or alternative payment technology?

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Nobody gets me Bitcoins!

Image by zcopley via Flickr

There was an interesting article and discussion today on American Banker‘s BankThink. American Banker’s Jeremy Quittner wrote an article about Bitcoin being highlighted in a legal case on an episode of the Good Wife this week. Brief Clip

If you want to learn more about Bitcoin, here’s another great Quittner article from a few week’s back For Banks, Digital Currency Poses Threat — and Opportunity

Read the Good Wide Bitcoin article here: ‘Cool, But a Hassle’: Bitcoin Tests Merchants’ Patience

I added comments on American Banker, and wondered what you thought of Bitcoin? What are you most focused on in fintech? Alternative currencies like Bitcoin/Facebook Credits/iTunes or mobile money movement through more traditional channels with less-traditional technologies (think Dwolla, Square, Paypal, etc). Am I missing something on alt-currencies? Let me know via Twitter: @leimer

Here were my comments on the American Banker post:

Are alternative payments like Bitcoin a curiosity or just a progression toward the ongoing transactional shift away from traditional banking (or traditional currencies for that matter)? Though the volume of alt-payments/mobile payments is growing rapidly (astronomically some might say), the vast majority of consumers and merchants still do not see the use of the established volume leader, Paypal (amazing growth under the recently departed Scott Thompson), as a form of regular payment activity.

The innovations of currency alternatives like Bitcoin (and mobile payments) are a great destination, a great promise of better technology and control around money movement and control for consumers and businesses, but it is often an overhyped ‘promise’ of what is to come…Yes, volumes are on the rise. Yes, some amazing technology is being developed and implemented. Yes, the user experiences around contactless payment (NFC, alternative POS), and alt-currencies (Facebook credits, even iTunes) are currently being established (certainly Google and Apple will have some say about this).

But how much do banks need to pay attention to alternative currencies? Yes, we should be prepared to integrate and embrace technology change around money movement of any kind. But, if you’re in banking or fintech, you’re probably more closely watching alt/mobile payment volumes rise and crafting/enhancing your payment/money movement technology at your own financial institutions in response. I wouldn’t worry as much about the Bitcoin model/alt currencies just yet. They’ll most likely take the back seat to money movement through traditional players (and in the alt-currency space, I would be more concerned about Facebook Credits than Bitcoin).

Money movement alternatives like Paypal, ZashPay, Cashedge/Fiserv’s PopMoney, Dwolla, Square (+ others) do have a built in ‘hassle’ within the user experience because of the need to link to additional traditional banking accounts somewhere. The person/merchant receiving funds also have to be on the same network or sign up/trust these providers. It seems like the only way to eliminate this is with an established alt-currency (how is the Euro working out, let alone the anti-banking alternative digital Bitcoins?), or an established open-API method of money movement (better solution). To address the overall UX, we need to integrate both technologies into the devices we carry everyday (our phones), whether it be through form factor (NFC/alt-device) or network apps (Paypal POS, Proxense, etc.). The UX still would take a back seat for alt-currencies like Bitcoin until you bridge the additional gap in the trust factor (Paypal itself, even with great UX, still isn’t as trusted for money transfers as a traditional financial institution).

We will have some time to watch these standards develop. As we watch the volume of alt-payments rise, the overall volume will be a limited space in the overall consumer/b2b payment pie. The true revolution in banking that everyone sees coming like a lumbering freight train is still there. It’s less about alt-currencies and more about overall experience through technology. But Movenbank and Simple aren’t going to change the world of banking overnight, nor has (or will) Bitcoin or Paypal for that matter. But changes are here, they’re real, and there are more are on the way (Paypal, Square, and Dwolla are will see monster jumps this year to be sure).

The fact that the Good Wife even tackled the subject is interesting. The audience for the episode probably increased awareness of Bitcoin in Peoria more than anything Bitcoin’s banking industry coverage ever did.

10 Resolutions Bank Marketers Can’t Ignore in 2012 (Contributor)

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I recently contributed some thoughts on a recent post titled “10 Resolutions Bank Marketers Can’t Ignore in 2012″ which appeared on Jim Marous’s great blog Bank Marketing Strategy. The post went up on January 3, and was also featured on Finextra & Banking2020.com.

Here’s the start of the content with a link to Jim’s original full post (it’s worth the read…you can follow Jim on Twitter at @JimMarous).

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2011 was year that many bankers, and especially bank marketers would love to forget. Not only was focus diverted by the need to respond to new regulations for the second consecutive year (this time it was the Durbin Amendment), but the image of our entire industry was challenged as foreclosures and bank failures continued to be in the news.

We didn’t do ourselves any favors in 2011 either, as some of the larger banks learned the power of social media when they decided to increase (and then rescind) debit card fees, or when the industry fought internally with Bank Transfer Day.

The biggest impact of all of this noise was that attention was diverted from what should have been accomplished in 2011. As I reviewed my post from last year, Ten Bank Marketer Resolutions for 2011, it is clear that most bank marketers lacked the time/focus to make much progress on any of last year’s goals. So, in writing this year’s Bank Marketer Resolution post, I could have simply posted the same resolutions from last year (similar to what I do with some of my personal resolutions). Instead, I reached out to bank industry leaders from across the globe for their ideas. There was surprising uniformity in their suggestions, and a sense of urgency around the need to achieve much more than last year.

So here are the resolutions bank marketers should not ignore in 2012 according to industry leaders:

1. Validate The Value of Marketing Through Measurement: As highlighted in my recent post 100 Years Later, Marketers Still Have Difficulty Measuring Up, there is still a tremendous gap between what bank marketers implement and what is measured. Not only are there almost 20% of marketers who don’t find measurement of results imperative according to recent research by Ifbyphone, but less that 50% of any channel is measured. Dan Marks from First Tennessee says, “Bank marketers should resolve to measure and optimize true marketing ROI – having the courage to seek out the unproductive part of the marketing mix and replace it with other activities that generate real shareholder returns.” Serge Milman, CEO of Optirate states, “In 2012, bank marketers should resolve to have a more diligent focus placed on business drivers that can help manage and grow the bank,” while Bradley Leimer, vice president of online/mobile strategy at Mechanics Bank said that, “The number one resolution for bank marketers in 2012 must be to ‘put data first,’ since the proof of any program resides in the measurement of results.”

Jeffry Pilcher from The Financial Brand added a common sense resolution that is not always followed . . . “stop doing things that don’t work.” It is clear that if only one resolution can be accomplished in 2012, the measurement of attribution and program results is the most important.

View the Rest of the 10 Resolutions for 2012 for Bank Marketers

I added additional comments to Jim’s blog, which I’ll also include here:

Bradley Leimer said…

Let me expand on my comments regarding data and measurement a bit.

Most of us would like to say we put results first. This means our marketing efforts, our channel activity, everything we do as marketers, have data points around them working to improve ROI, expand customer relationships, and improve the effectiveness of our marketing …but that’s not the reality.

When it comes to ‘Big Data’ and effective measurement tied to results, we need to be able to sort the wheat from the chaff.

The key is the ability to filter new and existing sources of data to pull the most pertinent metrics to mirror our business strategies.

While I generally would suggest we track/collect every potentially meaningful data point we can (you can always use leverage this data through analytics/data models later), the truth is that our industry has been trying to leverage ‘Big Data’ for years.

And most financial institutions have failed miserably at utilizing existing streams of big data. We are sitting on top of a goldmine of data, and it’s just becoming more of a deluge.

This goes for leveraging trends in transaction data, channel activity data, account changes, inbound and branch based interactions, CRM analysis, online and mobile transactions, credit data, and more. Now you add social graph and other sources of user generated content and we are simply compounding the issue, and making data storage facilities buckle.

Our industry has so much to offer our clients from the data we collect, from increased retention efforts through relevant offers, to real time account alerts that offer new levels of connectedness, to improvements in service that create genuine customer delight.

But we generally don’t focus on things that help our customers. We use data to justify our budgets, to justify marketing and technology efforts. Let’s step back and focus on data points that impact the customer advocacy that Ron Shevlin discusses in his post.

Let’s focus on streamlining ‘Big Data’ relevancy and work toward focused service goals in 2012.

As data sources continue to expand, we should be to take a good look at what we have already overlooked. Pick our spots to match advocacy metric to result.

Turn the morass of Big Data into targeted Small Data through filtering specific goals win. This will help you truly build customer intelligence in the long term.
January 3, 2012 7:57 PM

The Web Goes Black in Protest of SOPA

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Learn more about SOPA and PIPA

Post From Mashable

As announced, Wikipedia’s main page is “blackened” today in protest of the controversial Stop online privacy act (SOPA). For millions of Wikipedia visitors today, the message will be clear: one of the most influential sites and communities on the internet is clearly against SOPA. Many other sites, including Reddit, will join the protest by shutting down or “blacking out” their homepages today.