MyPrivateBanking Blog
Daily Comments on the World of Wealth Management

Archive for May, 2013

What Google Glass means for banking

Friday, May 31st, 2013

First there was the mainframe computer. A huge hulkish machine housed in a big data center. Then came the PC/desktop. A few years later we saw the first laptops and notebooks. Fast forward to today: smartphones and table computers are ruling the world. But the next big innovation is already underway: wearable computers. We are talking i-watches, helmet cams and, of course, glasses. Google has just introduced the concept of Google Glass: it’s a camera, a microphone, a search engine, a map and much more all linked through the view of your eyes. You can take videos, photos, and audio tapings just like you see and hear things at that moment. But you can also look at things or persons and get all the information that is stored on the web. You can make comments about anything you experience while walking or driving etc. etc.

What will happen to the banking industry when you look through Google Glass? There are some obvious things: find your way to the next ATM while walking a foreign city, getting directions to the next branch office of your bank or checking the latest forex rates while you look at the rates the money exchange booth in an airport is offering to you.

But there are also many further reaching possibilities you may think: what about getting ads for the best interest rates on cash accounts when you walk the streets and pass by a bank? What about bringing along your friend via Google Glass who happens to be an investment expert when you talk to your bank adviser the next time and getting her feedback on the bank’s investment proposal immediately? You may walk through town and get quotes and all the houses that are on sale plus the different financing options offered by competing banks. You probably can think of many more examples.

The concept of wearable computing brings a new dimension on how information is truly ubiquitous, every conversation is monitored and screened, in fact every human action can be recorded live, tagged and followed on any network. There are also huge regulatory and privacy issues arising. It’s time for banks to get ready for this next BIG thing.

 

Why banks’ communication fails on app security

Tuesday, May 28th, 2013

Apps are generally more secure than regular html webpages. There are several reasons for that, most prominently that apps are downloaded from a
walled environment, called app store. This holds also true for banking apps. We’ve asked our contacts at major retail banks worldwide about incidents of fraud through mobile apps. The answer is simple: basically zero. It may  be that Internet criminals have not learned yet how to break into mobile apps but for the time being, bank customers can feel somewhat safer using their mobile app than using web- based banking.

So, why do banks still get an “F” on mobile app security? It’s a communication problem. Our surveys show that many users don’t feel safe
using apps for banking transactions. One major reason is that they fear their bank accounts can be easily manipulated in case the mobile device is
stolen.

Yet, despite the users’ uneasiness with mobile banking, banks communicate only very hesitantly about the security measures and precautions for mobile banking apps: 34% percent of banking apps contain no information at all on security and 42% fail to do so on privacy issues. This is one of the results of our recent Mobile Apps for Banking 2013 benchmarking report. In addition, the report finds that app store descriptions of mobile banking apps include information on security matters in only 64% of cases.

Banks should take these findings seriously. Mobile banking is becoming ever more popular but a significant portion of potential users are deterred by
security concerns. Every banking app and every app description should  display and explain security features of the app prominently. Users must understand that data encryption of banking transactions is as safe as on the fixed Internet. Log-in procedures and other safety measures should also be clearly communicated. Users’ perception of security will then be as strong as the actual security itself.

 

Clever Blogging by Blackrock

Saturday, May 25th, 2013

by Francis Groves, Senior Analyst Social & Mobile Media

Earlier this week, Ignites, the Financial Times publication that follows the US mutual funds industry, has highlighted some of the strengths of social media strategy of Blackrock, the hugely important fund manager that also owns the iShares ETF business. Blackrock is reported to have seen the biggest rises in the numbers of people following it on Twitter and YouTube, 15.9% and 38.4% in the month to May 11 of any of the US’s top 10 fund companies (Ignites reports). But what really drew our attention was the group’s blogging strategy. Blackrock and iShares staff are sharing the same blog - under the iShares brand - and Blackrock is adopting its subsidiary’s ‘blog-centric’ social media strategy which basically amounts to focusing on great content in the expectation that readers will it pass it on. MyPrivateBanking commend this commitment to blogging as the thinking person’s social media. Although many commentators are apparently critical of the idea of a single blog for the entire group, we wonder if doing away with dual or multiple content series actually makes content a whole lot more accessible for social media consumers. It’ll be interesting to see if Blackrock/iShares stay with their single blog approach.

 

Banking apps’ strengths and weaknesses

Wednesday, May 8th, 2013

Which are the best and the worst features/areas of mobile banking apps? In our latest report on mobile banking apps for retail customers we have looked very much in detail at all the important functions. Here is the list of average percentages of the maximum reachable rating points for the banking apps from best to worst area:

User-friendlyness (e.g., navigation, speed): 89%
Availability of mobile apps (on different operating systems/platforms): 81%
Integration with other online media (e.g., website, social platforms): 81%
Core functions for clients (like account overview, payment features, brokerage): 76%
Security (encryption etc.): 70%
Support features for clients (like FAQ, help function etc.): 66%
Means of communication (email, messaging, phone numbers): 55%
Content and features for client retention (like product infos): 37%

I personally find it quite encouraging that user-friendlyness reaches such a strong score. This shows that banks have understood the important basics of how to “make” an app. On the other hand, the low score for communication features and marketing content is a bit shocking. It’s almost as if the banks don’t want to communicate with their clients and are not interested to leverage apps to showcase their products and services. Definitely something that should change in order to harness the full power of mobile apps for the banking business.

 
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