Tuesday, March 29, 2016
Monday, March 28, 2016
7 EMV BIG DATA POINTS - In US
Visa
More than 212 million Visa cards were issued with EMV chips by Dec. 31, and more than 766,000 merchant locations accept Visa EMV cards. There are now more chip cards in the U.S. than in any other country, Visa says
MasterCard
According to MasterCard, 59% of its U.S.-issued consumer credit cards had EMV chips as of Dec. 31, and more than 800,000 merchant locations can accept EMV MasterCard products. It did not provide an exact number of EMV cards issued.
Consumer Adoption
Seven out of 10 Americans have at least one EMV-chip card in their wallet, according to Visa research, and about 93% of consumers are aware of the EMV migration whether or not they have a chip card.
Global Shift
It's not just the U.S. that's adopting EMV at a rapid pace. According to EMVCo, a third of payments worldwide were made with an EMV card as of mid-2015. In Western Europe, that's a staggering 97% of all card payments; in Latin America, 87% and in Africa and the Middle East it's 84%, according to data published in December.
Chargebacks Rise
The Oct. 1, 2015 liability shift, which moved EMV fraud liability to the company that was unable to handle EMV cards, is starting to take its toll. The Kroger grocery chain reports operating costs rose 23 points during the final quarter of 2015, in part from higher chargeback losses.
Gift Card Consequences
As the EMV shift continues, fraudsters are paying more attention to gift cards. Many scammers are using counterfeit credit or debit cards to buy gift cards at non-EMV merchants, causing some of those merchants to restrict the way they sell gift cards, according to gift card giant Blackhawk Network.
Web Commerce Woes
It has long been expected that the shift to EMV at the point of sale would drive more fraud online — and that the fraud migration would begin even before EMV took hold. According to research from Forter, overall fraud attempts increased 163% in the first three quarters of 2015, with digital goods seeing a spike of 254% in attempted fraud.
Monday, March 21, 2016
Rising of 4 Banks in US
Friday, March 18, 2016
Value of Customer Data
Perhaps the most significant element of any business strategy – digital or otherwise – is understanding the ever changing needs and wants of customers. The landscape is littered with scores of businesses that have lost market share because they were not able to capitalize on changing customer behavior trends. So, having and being able to analyze data that provides insights into customers’ preferences is crucial to the survival of any business.
Big data analytics is the process of collecting, organizing, and analyzing large data sets containing a variety of data types (hence the name big data) to uncover hidden patterns, unknown correlations, market trends, customer preferences, and other useful business information.
This data is then used to determine the appropriate business strategies to meet the customers' current needs, and to anticipate their future needs. The successful players in the digital space not only understand their target customers’ needs, but they are actively engaged in influencing what customers want. Just think about the of customers who are willing to stand in long lines – sometimes for days – just to be the first to get the new Apple iPhones.
Now to apply Digital business concepts to banking, it’s worth noting that Chris Skinner in his book Digital Banking, asserts that "As a digital business, all banking can be broken down into pure bits and bytes, but more than that, a bank can be seen as three digital businesses in one. It is a manufacturer of products, a processor of transactions, and a retailer of services." Based on this premise, banks must begin to understand the shifting expectations of their customers, and develop strategies to meet – and exceed those expectations in an increasingly Digital world.
Another useful concept to consider, as it relates to developing a Digital Strategy, is “Buyology.” Buyology, as defined in Martin Lindstrom's 2008 bestselling book Buyology: The Truth and Lies About Why We Buy, is a term that describes the process of analyzing the factors that influence buyers' decisions in a world cluttered with messages such as advertisements, slogans, jingles, and celebrity endorsements. From a business perspective, this means understanding the core reasons why people buy, and creating opportunities to repeat that buying behavior again and again.
Now we have already seen that banks have been collecting and utilizing digital customer information for decades, so the accumulation of customers’ big data is already occurring.
The next step is analyze this customer data to determine which products are doing well, and which are failing, and why they are doing well or failing.
Are there data points to indicate which customers prefer certain products, and which prefer other products? Keep in mind, one size does not fit all. Big data will also indicate which of the banks’ customers are initiating financial transactions by the banks competitors, which means your customers have purchased products and services from your competitors.
Big data can provide other useful analytics such as:
- Are your customers using the branches? ATMs? Internet? Mobile? If your customers are primarily using mobile devices to make deposits, then you should be communicating to them via their mobile devices to better understand their needs. If they use the Internet via a laptop or computer, then push email messages to them inviting their feedback on the service they receive from your bank.
- Are your customers making loan payments to other lenders from their checking account with your institution? Then you should be offering them the option to convert the loan or consolidate it to your bank at a better rate, because you already know how much they pay each month, and for what type of loan. And since they are your customers, you already know whether they are credit worthy or not.
- Are your customers making payments to other credit card accounts from their checking account with your institution? You should consider offering your customer a credit card with a balance transfer option.
- Are your customers physically depositing payroll checks in the branches rather than using Direct Deposit? Then your tellers should be trained to recognize the opportunity to discuss the benefits of direct deposit with these individuals.
- Are your customers coming into the branch to cash payroll checks that are drawn on your bank? Then someone should be discussing with them the benefits of opening a checking account or obtaining a prepaid payroll card from your bank so they can take advantage of direct deposit, Internet banking, online commerce, and shorter checkout lines at stores.
- Are your customers using convenience checks from other credit card companies to pay down their credit card balances on your credit card? Why didn’t your bank offer these obviously credit-worthy customers the opportunity to pay down balances on your competitors’ credit cards?
Monday, March 14, 2016
Why All of The Interest in Digital Now?
Financial Institutions and their customers have been engaging in Digital Banking for decades, which leads to the obvious question of why all of the interest now in digital banking?
Well, for one thing, until recently, most banks’ attempts at “Digital strategy” have often been reactive and inconsistent.
In the past, banks’ IT departments have generally taken the lead for implementing digital technology to streamline processes, cut costs, gain efficiencies, etc. But these enhancements primarily benefitted the banks’ interests.
And if, along the way, the customer experience was improved, that was considered lagniappe. But it was NOT the banks’ main goal.
And up until the last decade, the only way customers could communicate directly with their bank was through the branch, by mail, through the call center, or the ATM. But recent advances in Digital technology have changed all of that.
In particular, the personal computer, the Internet, high-speed broadband connections, wireless technology, and mobile devices have now enabled customers to dictate to businesses the manner in which they (customers) choose to interact with the businesses (Remember the Lending Tree commercials where banks compete for customers’ business?).
As a result, some visionary entrepreneurs have launched hugely successful “virtual” businesses (no physical storefront or inventory) built on the operating concept of leveraging digital technology as their sole means of engaging in commerce with customers. This has turned the entire merchant/customer relationship on its head. So, in order to compete in a rapidly changing marketplace, traditional brick and mortar companies are now responding at breakneck speeds to catch up with their digital competitors.
Well, for one thing, until recently, most banks’ attempts at “Digital strategy” have often been reactive and inconsistent.
In the past, banks’ IT departments have generally taken the lead for implementing digital technology to streamline processes, cut costs, gain efficiencies, etc. But these enhancements primarily benefitted the banks’ interests.
And if, along the way, the customer experience was improved, that was considered lagniappe. But it was NOT the banks’ main goal.
And up until the last decade, the only way customers could communicate directly with their bank was through the branch, by mail, through the call center, or the ATM. But recent advances in Digital technology have changed all of that.
In particular, the personal computer, the Internet, high-speed broadband connections, wireless technology, and mobile devices have now enabled customers to dictate to businesses the manner in which they (customers) choose to interact with the businesses (Remember the Lending Tree commercials where banks compete for customers’ business?).
As a result, some visionary entrepreneurs have launched hugely successful “virtual” businesses (no physical storefront or inventory) built on the operating concept of leveraging digital technology as their sole means of engaging in commerce with customers. This has turned the entire merchant/customer relationship on its head. So, in order to compete in a rapidly changing marketplace, traditional brick and mortar companies are now responding at breakneck speeds to catch up with their digital competitors.
Thursday, March 10, 2016
Is DIGITAL Banking a new?
DIGITAL Banking is a BUZZ word in the market. I have a doubt whether this is new.
Now with all of the talk these days about Digital Banking, it's important to note that banks have been using Digital technology since the early days of the commercial use of the computer.
Consider that when someone opens a checking account, he/she is provided with an account number. This number, along with the customer's personal information, and the amount of money deposited into the account is stored on the bank’s computer.
Every time a deposit or a withdrawal is made, either a deposit slip or check with MICR encoding (Magnetic Ink Character Recognition) is "read" by a computer to record the transaction and update the customer's account balance.
Banks have long used high-speed Digital check processing equipment that can process tens of thousands of checks per hour to update customers' account balances.
In checking account transactions where a check is deposited into a different bank than where the checking account is housed, the settlement of this item becomes a Digital transaction because no physical cash is actually moved from one bank to the other. Instead, the banks electronically exchange bulk Digital files of all transactions via ACH (automated clearinghouse) to reconcile banks’ customers' account balances.
A similar process happens for loans, lines of credit, and credit cards. There is no physical cash that moves between a seller and a purchaser. Rather, loan balances are maintained on computers that record customers' use of the loan proceeds to make purchases and then reconcile the transactions against the customer's account balances.
In the old days, when customers presented credit cards to make purchases, merchants used paper receipts to imprint the credit card number, and then they had to call the card issuer for approval of the transaction. The paper receipts were then sent to banks to be digitized so the transactions could be recorded against the cardholders’ account balances.
Then when the credit card companies began to use Digital technology that allowed Digital credit card terminals to communicate with over telephone lines (remember the modem) directly with the card issuers’ computers, the payment transaction became even more efficient.
ATM and Debit Card issuers also utilized this Digital communication technology to streamline the access to funds in customers’ checking accounts by allowing merchants to immediately verify whether sufficient funds are available for purchases and then place holds against the balances for the amount of the purchase.
Now with all of the talk these days about Digital Banking, it's important to note that banks have been using Digital technology since the early days of the commercial use of the computer.
Consider that when someone opens a checking account, he/she is provided with an account number. This number, along with the customer's personal information, and the amount of money deposited into the account is stored on the bank’s computer.
Every time a deposit or a withdrawal is made, either a deposit slip or check with MICR encoding (Magnetic Ink Character Recognition) is "read" by a computer to record the transaction and update the customer's account balance.
Banks have long used high-speed Digital check processing equipment that can process tens of thousands of checks per hour to update customers' account balances.
In checking account transactions where a check is deposited into a different bank than where the checking account is housed, the settlement of this item becomes a Digital transaction because no physical cash is actually moved from one bank to the other. Instead, the banks electronically exchange bulk Digital files of all transactions via ACH (automated clearinghouse) to reconcile banks’ customers' account balances.
A similar process happens for loans, lines of credit, and credit cards. There is no physical cash that moves between a seller and a purchaser. Rather, loan balances are maintained on computers that record customers' use of the loan proceeds to make purchases and then reconcile the transactions against the customer's account balances.
In the old days, when customers presented credit cards to make purchases, merchants used paper receipts to imprint the credit card number, and then they had to call the card issuer for approval of the transaction. The paper receipts were then sent to banks to be digitized so the transactions could be recorded against the cardholders’ account balances.
Then when the credit card companies began to use Digital technology that allowed Digital credit card terminals to communicate with over telephone lines (remember the modem) directly with the card issuers’ computers, the payment transaction became even more efficient.
ATM and Debit Card issuers also utilized this Digital communication technology to streamline the access to funds in customers’ checking accounts by allowing merchants to immediately verify whether sufficient funds are available for purchases and then place holds against the balances for the amount of the purchase.
Sunday, March 06, 2016
Subscribe to:
Posts (Atom)