MyPrivateBanking Blog
Daily Comments on the World of Wealth Management

Archive for October, 2015

Forget passwords. Pay with a selfie!

Wednesday, October 28th, 2015

From passwords to two-factor authentication, bio-authentication, and tokenization, both consumers and cybercriminals have forced the online and mobile banking industry to come up with innovative and convenient security technologies. The latest functionality announced to be available to US e-commerce consumers in the middle of 2016 is MasterCard’s new facial recognition-based identification method. Online retailers will be able to authorize a transaction by taking a snapshot of their face and blinking once (to prevent fraudsters from holding up a picture of the retailer and fooling the system).

Particularly popular with Millennials or the ‘selfie-generation’, using selfies to authorize transactions is a clear advantage to passwords/ PINs as it saves consumers from remembering complicated combinations of numbers or letters.

Just like other biometric authentication functionalities, ‘pay by selfie’ is surely on-trend but it remains uncertain how secure the new technology is. Biometrics that rely on static information like face recognition or fingerprints can be easily faked; the case of the German defense minister Ursula von der Leyen’s fingerprint cloned just from photos is a solid proof in this sense.

The retail banking industry is rushing its way in offering consumers innovative mobile technology functionalities but the next generation of mobile banking apps needs to include stronger security features to make cyberattacks impossible.

 

How Credit Suisse moved from app laggard to app champion

Thursday, October 22nd, 2015

In our Mobile Apps for Banking 2015 benchmark, Credit Suisse appears to be the most successful bank when it comes to continuous improvements during the last three years.

While DBS and BNP Paribas are on top of our rankings regularly, Credit Suisse managed to jump from the 13th rank in 2013 to the 9th rank in 2014 and arrive at the third rank in this year’s evaluation of the banking apps offered by the 35 largest retail banks worldwide.

Credit Suisse is rolling out its new digital strategy since beginning of this year and the continuously improving performance of its mobile flagship Private Banking Schweiz shows its great success. These are the four improvements that had most impact on its progression:

Core functions: The new version now offers a complete set of core functions, including trading.

Add-ons for clients: Clients can view their finances graphically, making it easy and convenient to check the financial situation at a glance.

Content for customer retention and marketing: Clients can now apply for new products and services directly from the app and they have access to a comprehensive section discussing mortgage, including video material, calculators and tips.

Attraction of a whole client segment: The Viva app contains valuable rewards and music streaming offerings, which is particularly attractive to the young client segment.

 

Why Crowdfunding may soon become a threat to the Private Banking industry

Thursday, October 1st, 2015

Although there has been little acknowledgment from the wealth management industry, the rise in crowdfunding in recent years has been remarkable. Goldman Sachs sizes the addressable market for crowdfunding at about $1.2 trillion. This is the total market value for crowdfunding that could be realized in the long-term. For 2014, Goldman Sachs estimates the U.S. crowdfunding market size at $10 billion, up from just $1 billion in 2011. The Worldbank forecast that global crowdfunding could increase to between $500 billion and $1 trillion by the mid-Twenty Twenties. These numbers include marketplace lending (e.g. Lending Club), equity-based crowdfunding (e.g. Circle Up and OurCrowd) and donation-based crowdfundfing (e.g. Kickstarter).

But isn’t crowdfunding something invented by hipsters to collect a few thousand dollars for some crazy art project or an even crazier new invention that will not go anywhere? That was probably true in the very beginning of the crowdfunding trend, 10 or even 5 years ago. But nowadays crowdfunding has flourished into a multi-billion-dollar industry, quickly spreading across the globe. Even institutional money is now flowing into (specifically p2p/p2b) lending-based crowdfunding chasing for better returns than one can get on a typical fixed income security.

So crowdfunding is opening up not only to small retail investors but also to institutional and private wealth. Therefore, crowdfunding brings some threats to the wealth management industry. In a way it is another tool that disintermediates investing as robo-advice does in another context. Affluent individuals, HNWIs or potentially wealthy individuals are using more or less automated platforms to engage with investment targets in a much more direct fashion compared to investing through a typical wealth manager. The functional and emotional benefits of this type of investing may - over the long run - shift assets under management away from the traditional wealth management industry.

But where there are threats there are also opportunities…. We’ll explore the whole field of crowdfunding from the perspective of wealth managers and private banks in a shortly to be published new report. Stay tuned.

 

Part No. 4: Guess who has made the most progress on mobile apps for banking?

Thursday, October 1st, 2015

Here’s the fourth hint for our little quiz about which bank showed an outstanding effort in continuously improving its core banking app in our yearly ‘Mobile Apps for Banking’ benchmarking:

4.) THE BANK WE ARE SEARCHING IS KEEPING PACE WITH THE LATEST TRENDS, OFFERING A SMARTWATCH APP THAT ADDS A LOT OF VALUE TO INVESTORS

Watch out for our new report coming soon!

 
Subscribe