Digital finance-related trends to watch

Innovation and technology are changing the way businesses and consumers save, spend and manage money

Mobile banking

A 2011 Pew Research study showed that 35 percent of Americans own a smartphone, and a 2012 Federal Reserve survey indicated that nearly 21 percent of mobile phone users in the survey used mobile banking in the past 12 months.

“Banking has been going through an evolution for decades,” said Scott Miller, senior VP of marketing at Riverview Community Bank.

“Electronic services are innovating so quickly that it’s a wise idea to talk to your credit union or bank representative about what is available or coming soon,” added Colleen Boccia, senior VP of marketing at Columbia Credit Union. “If you haven’t done so in the past year or so, you’ve probably missed opportunities that could help you become more efficient or save money.”

Here are four digital trends that are revolutionizing the way consumers – and businesses – manage, acquire, spend and move money around.

Personal finance management

Online solutions, such as mint.com, Jawalla, and FinanceWorks, are replacing PC-based applications such as QuickBooks and Microsoft Money, according to Boccia. These services enable “people to manage their money on a day-to-day basis,” said Miller.

A service such as mint.com, explained Kurt Rylander, managing attorney at Rylander and Associates PC, is useful because it aggregates all bank accounts, credit cards and online bill paying into a single portal, and offers graphics that analyze the aggregated data, such a pie chart of recent purchases.

Boccia said that Columbia Credit Union has recently made a similar service available to members, who can use it to establish end goals for saving and budgets, auto-categorize transactions, forecast cash flow and create income-and-expense reports. Columbia CU’s move confirms a 2010 survey conducted by research firm Aite that indicated 60 percent of financial institutions that didn’t currently offer personal finance tools were considering doing so.

Mobile banking and payments

According to a 2012 Forrester report, a third of retail banks’ digital budget is spent on mobile technology. A study by consulting firm Deloitte states that between 2005 and 2010, mobile banking usage increased at nearly a 100 percent compounded annual growth rate, and that “mobile banking is on the cusp of transformation from a niche service for the technologically elite to a mass-market service demanded by all customer segments.”

Both Riverview and Columbia CU support browser-based mobile banking, and in just a few weeks, said Miller, Riverview will be rolling out new iPhone and Android apps that support mobile remote capture for deposit. Boccia said this month the credit union added new mobile alerting capabilities, and is investigating remote deposit capture, as well.

Jen Shefner, Columbia CU’s AVP of eCommerce, said that mobile payments are an even bigger trend than mobile banking.

For example, Noland Hoshino, co-founder of Vancouver-based Bcause Media, said his firm used the Square card reader – a device that attaches to your smartphone and enables you to accept credit card payments – at a recent fundraiser.

Michele Thor, Columbia CU’s VP outreach and social responsibility, said that Square is “particularly attractive for businesses that sell at various locations, like farmer’s market merchants or remote services professionals.”

“Square is huge,” added Rylander. “It allows any company to set up a booth anywhere. There’s never been a better time in the world to startup a business and be an entrepreneur.”
Social media

As with many industries, financial institutions are jumping on the social media bandwagon.
“People are ten times more likely to go somewhere if it has online recommendations,” said Miller, adding, “It’s a great way for us to provide information and get feedback.”

Riverview maintains an active Facebook page, and has listings on Yelp and similar sites.
Besides Facebook and other social media sites, Shefner said that Columbia CU has recently added targeted digital coupons within online banking.

“Driving business to you, while keeping the money local – two ingredients for a stronger local economy,” said Thor.

Investing and marketing

Hoshino was enthusiastic about new developments in the investing arena, such as Kickstarter – an online service that lets entrepreneurs explain their ideas, and gives others a chance to invest in the idea. Unlike traditional “crowd-sourced funding,” said Rylander, Kickstarter doesn’t offer stock options or ownership interest. Instead, investors get a reward, such as the first product off the line.

“Kickstarter is a great model for young entrepreneurs to raise money, and raise a community that can support the product when it comes out,” said Hoshino.

  • Other interesting players in the investing and marketing sector include:
  • Covestor – enables individual investors to find and follow investing leaders and mirror their trades.

SecondMarket – an online marketplace for buying and selling illiquid assets, including fine art collections.

The bottom line

The previously cited Deloitte study stated that “as banks develop their strategies for giving customers access to their accounts through cell phones and other mobile devices, they should also regard this emerging platform as a potential catalyst for generating operational efficiencies and as a vehicle for new revenue sources.”

Boccia said that businesses should expect their financial institutions to stay ahead of the technology curve.

“Businesses should look for a financial partner who is investing in technology R&D and innovative ways to use data to simplify business processes,” said Boccia.

EXPLORE WHAT’S UP AND COMING

Use your favorite search engine to learn more about the following products and services, all of which could revolutionize part of your banking and finance world.

Xoom
TangoCard
Bitcoin
Dwolla
PayDivvy
TabbedOut
GumRoad
Belly
Lemon
LevelUp
Google Wallet
Uber
Wesabe
Lookout Mobile Security

SECURITY CONCERNS

Naturally, information security is a major concern with online finance management, mobile banking, mobile payments, online investing, and other digital trends.
Here are some security tips from Columbia Credit Union’s eCommerce team for “smart, trendy businesses.”
1. Read the Federal Trade Commission’s booklet,
“Protecting Personal Information. A Guide for Business.”
2. Follow safe password guidelines.
3. Keep computer operating systems, anti-virus software, and web browsers up-to-date.
4. Use firewalls and block pop-ups while browsing,
5. Ensure the websites that you are accessing offers encryption.
6. Perform regular spyware scans.
7. Download programs and apps only from trusted suppliers.
8. Turn off computers when not in use, to prevent unauthorized Internet access.
9. Require all account changes requested by a supplier to be made in writing, and verify by calling the supplier’s office
10. Review account statements regularly and report any suspicious activity immediately.

Comments

comments

Jodie Gilmore’s journalistic background includes more than 15 years of writing for the Vancouver Business Journal as well as other publications such as Northwest Women’s Journal, North Bank Magazine, American Builders Quarterly and The New American. A Master’s in Technical & Professional Writing and 20+ years in the trenches as a technical writer and online help developer round out her writing background. When not writing, she enjoys gardening and working on her small farm in the Cascade foothills.