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TMG's Jeff Russell on the Future of Payments - The CU Water Cooler

Jeff Russell from TMG Financial Services gave a great talk at the Water Cooler Symposium about the future of payments. Where are the technologies that have everyone talking, like NFC and PFM, and where are those technologies going? What is the threat level from outside players, like Google and Apple? Jeff has some sharp insight, and you can watch it in the video below or over on the CU Water Cooler website. 

 

2011 CUWCS - Jeff Russell from Tim McAlpine on Vimeo.

Mobile Tags and QRs are the Talk of SXSW

South by Southwest (SXSW) is a yearly even in Austin, TX dedicated to music, film, and interactive technology. This year, one SXSW goer gave the award for "most discussed/noticed technology" to QR codes or, more broadly, 2D barcodes of any ilk. 

From "The Flack" blog: 

I'm talking 2D barcodes (i.e., QR Codes, Microsoft Tag...) that link the physical world to mobile. My client John Puterbaugh, CEO of Nellymoser and a pioneer in the development of technology that seamlessly delivers rich content to mobile devices, summed it up when he said on his PSFK panel:

"2D barcodes codes are to mobile what the URL was to the Internet."

A ringing endorsement. 

So, right now, you need to go to The Flack and look at all the cool shots he took of QR codes in the "wild" of SXSW. A lot of good brainstorming fodder to be had. 

(Special thanks to Christopher Morris for the link, via Twitter)

Tech News Roundup

Every week, we here at DigitalMailer come up with a number of articles and resources that we share with one another, talking about the "next wave" of finance technology. Here's what caught our attention recently: 

Electronic channels at “social banks.”  (from BAI)

Fixation on Location (from GonzoBanker)

Cloud Computing is Greener (from Harvard Business Review)

Why Community Banks Need a Product Advantage (from BAI)

There IS an app for that...but why? (from CU Soapbox).

Social Finance - Is It Working?

by Jimmy Marks

Look at your watch. Let eight seconds go by. Boom - another social media consultant has just appeared and has come up with an article about how much impact social media has on people's finances. 

It's getting a little crazy. It seems like every time we turn around, we get one more guy saying that users of X social media site are Y% more likely to put their money in your credit union than any other human being alive. Whoops, another eight seconds went by, that's another guy yelling about how all those Facebook fans you have are the same as alternative capital!

Let's get serious for just a second. We've been talking social media for the last two posts (if you haven't read them, go do it). Come to think of it, we've been talking about social media for the last two YEARS. But we've never really taken the time to look at the impact "social finance" and whether or not there were numbers and trends you could count on when it comes to social media and online finance. 

America (Banking) Online

Louis Hernandez at Open Solutions wrote an article (It Takes a (Global) Village: How to Use Social Media - CUJournal, 4/19/10) about social media. Some interesting facts about deposit balances and social network users (most of which, it seems, were culled from a report by Raddon Financial Group): 

• MySpace users have the lowest amounts on average, with $11,891. 
• LinkedIn users has the most with $29,794
• Twitter users had $20,562 on average
• The average Facebook user has $19,339, but daily Facebook users average about $16,586. 

I found these numbers surprisingly high, given that we only started seeing a resurgence in savings in the past year-and-a-half or so. 

I differed to Ron (Daly, my boss), who said "Ask what the average amount is among people who want nothing to do with this stuff." He's betting it's going to be a lot more. Anybody got numbers, comment on this article and let us know. 

Other interesting numbers regarding getting financial advice via social:

• Only two percent of consumers have interacted with their FI while visiting a social networking site.
• Three percent would be interested in taking advice from a blog or SM site. 
• Only four percent said they had solicited advice about finance from a social media site. 

Two, three, and four percent? That's terrible. Is it because there are few FIs online and they're doing a bad job of social media, or is it that people aren't interested in "friending" B of A or their chief banking institution? (Yeah, B of A's Twitter has 7,000 followers, give or take, but I'm doubting all their followers are customers with issues, and with 53 million customers, you're looking at <.013% of customers being helped by their Twitter account.)

Some fresh perspective from Jeffry Pilcher's Financial Brand blog, which ran a "Datahead" article about online banking and social finance (his data's from Forbes, Mintel and ComScore to be clear): 

• 76% of online banking users have visited a branch in the past two months, while 68% have visited an ATM and 37% have called their call center. Mr. Hernandez's article says there's been a drop-off in branch visits even between '08 and '09, but 76% is still plenty high. 
• 75% of members/customers don't realize their bank/CU has online banking. Half of those that DO realize there's online banking USE online banking. That's 12.5% of consumers that are actively using OLB on average. But 87% of those are accessing OLB more than once per week.
• Half of all online banking users have mobile internet on their phone and less than half of those access their bank's services online from said phone - so, on average, about 23% of consumers are accessing their bank's site via mobile. 
• 65% of members wanted to get emails about their accounts(!) while only 8% wanted account updates via social media. 

On this evidence, I'm willing to make a few guesses about where social media fits in the big picture. 

1) Social media is good for ad hoc feedback, event coordination and notification, casual chat and (maybe) some selling. But most folks don't want advice from their social networks. And it's not specifically the networks, it's the people using said network. 

Think about it - do you want to talk about your Roth IRA or your Mortgage with the person who keeps sending you "Which Twilight Character Are YOU!?!?!?11?!" Quiz on Facebook? No, you don't. At least, I HOPE you don't. You trust a few people in this world to tell you what you should do with money, and that conversation doesn't have to happen in front of an audience of hundreds.

According to this article from eMarketer Daily, the number of people using social media is going to be growing to about 66% by 2014. Getting a foot in the door now is smart, given that the trend is increasing and the risk is relatively low, but expecting it to be "the fix" for your institution is unrealistic. People don't start a financial relationship with some bank or CU that they found on Facebook. They go find their bank on Facebook because they already have a relationship with them. 

People are loyal to a dependable product first, its associated brand second. Slap a member or customer with $200 worth of fees and all the social media in the world won't make a difference - they'll feel cheated and complain, and might even leave. Doesn't matter if they brought it on themselves -they're going to say it's your fault.

2) OLB, email and websites all need to be better. There's a reason you started offering online bill pay/banking, eStatements, eLerts and so on. It's because the more people are leaning on your online channel, the less they have to come all the way to the branch to deal with their money issues. Little things like transferring money between accounts and making payments are time sucks for a branch - let people work it out from home. 

Emails, eStatements and online notices are popular (it's why we exist), but we still have people who are on the fence about communicating with members via email. Why? What's stopping you? You don't have to put a ton of personal info into the thing and you aren't spamming anyone. "We might get phished," you say? Yeah, you might. But if you're actively engaging members with emails and getting them accustomed to what an email from you looks like, you're training them about what the real messages look like versus a fake one. Come on, people, it's 2010. "I'm scared of email" stopped being a valid excuse in 1998. Get in there.

If your OLB, emails and websites aren't up to snuff, you're missing out. This is Web 1.0 stuff, and 2.0 is about to hit the bricks in favor of Web 3.0 (does that blow your mind, because it should). You're going to see the big banks and their big websites increase functionality in the next few years, and as Robbie Wright of CU Innovators recently said: 

I will immediately think poorly of a product if they have a crappy looking website. crappy site=crappy product

less than a minute ago via CoTweetRobbie Wright

Let's just cut to the chase: you have a budget of $1 million. You can spend it on your websites and online banking, or on your social media initiatives. You can only spend it these two ways, and you can split it any way you choose. What are you going to spend it on, knowing what you know now? 

Talk to me, people.

Your Monthly Balance: Brought to You by McDonald's!

by Ron Daly 

Advertising on the Internet is a funny enterprise. You can create ads that move, almost like mini-commerical spots. You can make interactive ads that play games with potential customers. You can create wildly inventive ads that use dozens of colors and lots of crazy patterns, because unlike print, there's no premium on how creative you get. More importantly, you never run out of room. 

What do I mean by that? Sure, you have to meet file size requirements and format the ad to fit into the seller's ad space. In that sense, you are confined to a certain amount of space. But there's a lot of empty space on the Internet. I mean, a LOT. Have you ever seen the "Million Dollar Homepage"? A while back, a 21-year-old university student in England decided to buy a website and block off one million pixels worth of blank space that he sold for a dollar per pixel. The site was completely sold off in 2006 and all one million pixels are filled up with ads from companies of all shapes and sizes. The 21-year-old student grossed over a million dollars as a result. Quite a way to pay for college, wouldn't you say?

Feedback Loops - Part of a Balanced Budget

by Ron Daly 

No, it's not a sugary breakfast cereal - a feedback loop has to do with information and systems. A real life example: 

1. We got a Wii® Fit™ for our home
2. We got on and tested our balance and posture
3. We went through a series of crazy games involving hula-hoops and yoga poses
4. We re-tested our posture to see how it had improved

But there's a fifth step, one that happens from the moment we turn the game on until the moment we quit and go get a sandwich - it's self-correction. 

As you play, your character is being challenged to walk a tight rope, dance, and stand very still. The game gives you feedback about your posture and stance, evaluating your performance and telling you when you do whatever you're doing the wrong way. You try to get better, little by little, as you move through levels and exercises. Steven Levy of Wired has an article about being beaten down by these workout video games. His reason? He was TOO focused on his workout, as opposed to usual gym distractions. 

An article from Harvard Business Review, "The Cost of Being Omniscient", talks about feedback loops in business and how they change the behavior of a buyer/user. From their article:

Anyone who doubts the power of feedback to influence action hasn't stepped on a scale before dinner. Customers under pay-as-you-drive plans almost invariably start using their cars less and buckling up more. Enel, an electrical utility in Italy, saw the same effect. After it installed "smart meters" in homes, its newly aware customers collectively spent 500 million euros less per year on electricity.

We have come to a point where "Information Age" doesn't quite describe where we are as a society. I think "Feedback Age" is a better fit. The more social the Internet gets,  If you're interested in bettering yourself, there's info everywhere on how to get it done. Your iPod isn't just a music player, it's a pedometer and a calorie counter. Your car is telling you when you're not driving safely. Your house tells you to shut off your lights. As a result, you jog faster, you drive better, you live greener. Why? 

Divide and Conquer: Start Split Testing Today

by Jimmy Marks

 I'll go ahead and throw away the opening sentence of this article on an obvious statement: the internet has changed everything. We, as online creatives and marketers, are no longer confined to the constraints of the physical space (or "meatscape", as total weirdos call it). We can make our websites as big and bright as we like. We can publish our updates and releases at our leisure via blogs and online news services. We can change our minds and our products on a whim. We can animate, demonstrate, and, most importantly, split test. 

What is split testing, you're wondering? If you're not already doing it, today's your official start date. Split testing involves two (or more) options for a marketing campaign, website, email - any intellectual property that is designed to command user's attention. Typically, you set up your "A" and "B" choices and test each to see which gets the most user response/return. You might think these two choices have to be completely disparate, but the differences might be as simple as: 

• The placement of your "call to action" button
• A different subject line/title
• A different image in the body text
• Altered colors
• A different sender name (i.e., sending from "Member Solutions" instead of "Collections Department")

This involves a little work on your part. You're going to need to track conversions on these two website versions (that is, how many people take you up on your sales offer or click for more info). For traditional-mail marketing pieces, you can send both options in tandem and see which gets more response, then adjust from there. For email, you'll need to track opens, bounces, unsubscribes, etc. for each of your campaign choices. 

"So you're just measuring ROI ?" you ask. In a sense, but you're also measuring the strengths of one campaign's layout and language. Who's to say that, by putting your seminar ads up under your headline in a sidebar, you won't get more people signing up? Maybe members aren't calling because they don't know where your phone number is on your email or contact page. You might think these are trifles, but when it comes to engaging members and getting them to take an interest in what you have to offer, can you afford NOT to make a campaign better over time? Pick your pet campaign, give the components some thought, and see how a split test might improve it.

I could go into extra detail, but I'm hoping this has spurred you to start thinking about this for your websites, email campaigns, newsletters and marketing pieces. Here are some resources to get you started: 

• An article titled "10 Factors to Test that Could Increase the Conversion Rate of Your Landing Pages" (catchy title, no?). A good walkthrough, with some important points to keep in mind as you move forward. 
• From DailyConversions.com - An article in which one of the website's marketing specialists does split testing on a local homeless man's "please give" sign. It seems a little weird at the start, but his work with the homeless man's sign placement and content changes the homeless man's luck and drives up donations. A really strange exercise, to be sure, and not one I'd recommend repeating, but still worth a look.
• Five Second Test is a great website that lets you test website layouts and the impact your current layout has on a random spray of audience members. Simple, fast, effective, and free, it's worth the time it takes to throw up a few potential layouts and examples. 

And I wouldn't be much of an ad guy if I didn't take the time to tell you that DigitalMailer's Automatic Relationship Builder (ARB) has built-in split testing capabilities. Start marketing smart by visiting our website, or give us a call at 866.994.4900 ext 115.

The Lost Highway: 30% of Americans Don't Have Internet

by Ron Daly

As the president of a company providing an array of online services, I'm always a little baffled by statistics such as this one from the Census Bureau. 

From Asylum.com - 

Almost one in three Americans don't use the Internet at work or home.

New census bureau data, collected from 54,000 households, finds that seniors, the poor, underrepresented minorities and folks who live in rural areas lag behind the rest of the country, technologically speaking.

It stands to reason that folks in rural areas and the elderly aren't getting Internet exposure, but I'm the kind of person that thinks if a person really wants Internet access, it should be available and affordable. 

I'm sure there's a percentage of folks in this country who just flat-out don't want the Internet. To each his own - if you don't feel as though you need it, don't bother with it. But Congress and the FCC are stepping in to increase the availability and affordability of online access, thanks to the American Recovery and Reinvestment Act and the National Broadband Plan.

From eWeek.com - 

Federal Communications Commission Chairman Julius Genachowski has already said the National Broadband Plan due to Congress in March will call for 100 million households at 100M bps by the end of the decade. A coalition of consumer and advocacy groups like that but call for even bolder goals and milestones.

Among those, easy-to-interpret billing statements, smarter grids and a 90% high-speed adoption rate. The argument of consumer advocacy groups is that more access equals a level playing field for disenfranchised and neglected demographics in America. I can't be certain about the impact of high-speed Internet on people previously deprived of it, but for good or for ill folks who want access should be given it. The "Information Super-Highway" is supposed to connect people, not shut them out of communication. Let's get everyone on the road.

How do you feel about access for everyone? Will a "wired nation" happen by 2020? Tell us your thoughts about it in the comments section. 

The Decoy, The Bait, and the Smarter Twitter User

by Jimmy Marks

Growing up in a rural community, you get used to hunting and fishing terms and techniques. Two such techniques I've seen used to great success are decoys and bait. 

The decoy is a preferred method of staying out of the sight of waterfowl. Lulling them into a false sense of safety with fake ducks or geese and getting them to draw closer so you can fire is a skill that many successful hunters learn early. Bait, obviously, is a key part of the fishing equation - without tempting bait, it's tough to draw a fish's attention. While these methods are important to hunters, they're even more important to Spammers. Regrettably, they're just as effective online as they are in the outdoors.

A number of credit union and finance Twitter accounts have been compromised lately. Our own Twitter account, twitter.com/DMI_CUSoapbox, received a number of direct messages from our followers/friends imploring us to click links and enter our personal information. Thankfully, we ignored most of these links and paid attention to the Twitter explosion that followed.

"Accounts hacked!" followers exclaimed. 

"Do NOT click the link," others noted. 

And from one or two Twitter accounts being compromised came three or four. And from all that hubbub came a stinging reminder: 

SPAM will always be around to ruin the party. 

Should Online Acquaintance Be Forgot? We Think So.

by Ron Daly 

I came across this story the other day from Usability Post which asks "Is it time to make 'Remember Me' the default for password protected websites?" This question comes as the result of a few articles about password memory, one which asks if it's time to do away with the option of "Remember Me" and go with automatic login. Another article by web-genius Jakob Nielsen suggests we get rid of the "dots" in the password field (i.e., "Password: ******"), because doing so would increase confidence in those who have trouble with passwords and save them the trouble of copy-pasting passwords. 

What do I think? No. To all of the above, I say no. No, no, no. 

Maybe I'm a little kooky about auto-login and password protection standards. I have to be, it's part of my business. DigitalMailer has lots of clients to manage and those clients all fall under the heading of "information too important to compromise". So we don't use "auto-fill" here, we don't use "save password/remember me" fields, we don't have "oops, I forgot" lists for passwords - none of that. We don't do those things because we value our client's safety. I don't know that it's such a great idea to do with your OWN information, either.