Virtual Banking E-Book

Dan Schatt

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: Wiley Finance Editions
• Sprache: Englisch

Seitenzahl: 412

Veröffentlichungsjahr: 2014

Beschreibung

Technology is permanently transforming the banking industry, and digital payments are the key Electronic Payments, Mobile Commerce, and Virtual Banking: A Guide to Innovation, Partnering, and Regulation takes a hands-on approach to competing in the modern banking environment. Former PayPal Head of Financial Innovation Dan Schatt explores the reasons behind the massive consumer migration away from traditional banks, and provides clear, actionable guidance on beating new banking models at their own game. Digital payment is the hottest topic in banking today, and is set to define the future of the industry. Consumers are rapidly abandoning traditional banks in favor of institutions that are lower-cost and more consumer-centric. Between the pace of financial regulatory reform and the cloud computing revolution, the old banking model is on the fast track to extinction. Electronic Payments, Mobile Commerce, and Virtual Banking provides the information banks need to compete in this new environment, and details the integral implementation actions that will allow them to thrive. The book discusses real-world innovations from banks, non-banks, and up and comers, and the heavy competition from the new outsource bank model. Topics include: * The changing POS landscape and the need for digital wallet partnerships * Shifting gears to greenfield market opportunities versus non-profitable markets * Digital channel best practices for superior customer experience * When to outsource, and what capabilities to truly own Case studies including PayPal, Google, Square, Facebook, Twitter, and more illustrate acceleration of innovation through banking partnerships, as well as the mechanics behind banking's biggest, scariest threats. The trick to surviving the paradigm shift is to embody innovation while providing a superior customer proposition. Electronic Payments, Mobile Commerce, and Virtual Banking: A Guide to Innovation, Partnering, and Regulation provides the inside track on managing the shift and dominating the new marketplace.

Leseprobe

ADDITIONAL PRAISE FOR Virtual Banking

“For too long financial services has lagged behind other industries in understanding and adapting to new consumer expectations of service. This book shows how they can stop falling behind by becoming part of the emerging new ‘innovation eco-system' and adopting new ways of working, especially partnering with smaller innovative firms.”

—David Milligan, CEO, Matchi.biz

“Virtual Banking is full of practical advice, built on careful analysis and thoughtful predictions, such as the future of mobile banking. A call-to-action for an industry that desperately needs deeper innovation-minded partnerships.”

—Michael Strange, CTO, Mitek Systems

“Financial technology has advanced dramatically in the past two decades, but in recent years we've seen major banks and institutions embrace data processing technologies to be more efficient. In the 1990s, the limitations of mainframe technologies hampered the banking industry's ability to make automated decisions based on billions of data points. Today, parallel processing and scalable technologies have enabled an entire generation of alternative lenders, virtual banking products, emerging payment systems, and mobile tools for consumers, business owners, and the enterprise. Dan's book is a fantastic analysis of these evolutions and specifically how SMB's have become more inclined to use technology to grow fast.”

—Darian Shirazi, CEO and Co-founder, Radius

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Virtual Banking

A Guide to Innovation and Partnering

DAN SCHATT

Cover image: ©Alex Belomlinsky/Getty Images Cover design: Wiley

Copyright © 2014 by Dan Schatt. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

ISBN 9781118742471 (Hardcover) ISBN 9781118742549 (ePDF) ISBN 9781118742365 (ePub)

To my wife Suzan—for agreeing to give me a tour of Bucharest 22 years ago and who remains just as charming, talented, and beautiful 4 continents, 10 countries, and 2 kids later.

To Brianna and Demian—who regularly inspire me with their own innovations and awesomeness

List of Tables

Chapter 2

Table 2.1

Chapter 4

Table 4.1

Chapter 6

Table 5.1

List of Illustrations

Chapter 1

Figure 1.1 “Showrooming” Is Driving More Spending Online

Figure 1.2 Total U.S. Retail Revenues

Figure 1.3 Square Wallet’s Virtual Punch Card

Figure 1.4 Receiving Money in Your Bank Account through Square

Figure 1.5 PayPal’s In-Store Mobile Experience

Figure 1.6 PayPal Mobile App

Figure 1.7 Mobile Screenshots

Figure 1.8 Discover Card

Figure 1.9 Apple’s Passbook

Figure 1.10 Consumers Are Purchasing Higher-Ticket Items with Their Smartphones

Figure 1.11 Uber App

Figure 1.12 eBay Now

Figure 1.13 PayPal’s Mobile Experience at McDonald’s France

Figure 1.14 Starbucks App

Figure 1.15 LevelUp App

Figure 1.16 Dan Schatt (author) in Kenya with friend John Staley, COO of Equity Bank add “standing in front of an m-Pesa booth in Nairobi.”

Chapter 2

Figure 2.1 People Spend Lots of Time on Social Networks

Figure 2.2 mBank of Poland

Figure 2.3 Yodlee’s MoneyCenter Application

Figure 2.4 Tandem

Figure 2.5 Instabank

Figure 2.6 Venmo person to person payments app owned by PayPal

Figure 2.7 Fidor Bank Screen Shot of Virtual Credits It Manages for Its Customers

Figure 2.8 Fidor Bank’s Interface to Manage a Customer’s Digital Financial Value

Figure 2.9 Facebook dominates social logins on third party Websites

Chapter 3

Figure 3.1 The Changing POS Landscape

Figure 3.2 EasyPay

Figure 3.3 Using Google Glass in a payments context

Figure 3.4 Digital Wallets

Figure 3.5 Google Wallet

Figure 3.6 PayPal’s Three-Pronged Approach to Point of Sale

Chapter 4

Figure 4.1 Radius Helps Financial Institutions Get More Business by Focusing on Businesses with More Social Media Presence

Figure 4.2 Radius Helps Financial Institutions Achieve Higher Response Rates by Targeting Businesses with More Reviews

Figure 4.3 Credit Agricole’s App Store

Chapter 5

Figure 5.1 What Is Bitcoin?

Figure 5.2 Bitcoin Ecosystem: Core

Figure 5.3 How Miners Find the Next Block

Figure 5.4 Bitcoin Ecosystem Enablers

Figure 5.5 Block Chain as Asset Register

Chapter 6

Figure 6.1 Many Traditional Banking Products Can Now Be Substituted with Prepaid Products

Guide

Cover

Table of Contents

Preface

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Foreword

By Renaud Laplanche

Co-Founder and CEO of Lending Club

When I founded Lending Club in 2006, I saw the potential for a new model to deliver credit, in a way that would transform the U.S. banking system into an online marketplace where investors directly fund borrowers, earning a return in the process and creating savings for borrowers. This transformation would allow the system to operate at a lower cost, be more transparent and more consumer friendly. As I started building Lending Club I came to learn from people like Dan that my vision was part of an unprecedented wave of technological innovations in financial services. The task Dan took on–to provide a guide to such innovations–is enormously challenging, but as a former investment banker, industry analyst, and PayPal innovation executive, he was uniquely qualified to do so, and the result is a resounding success.

Today’s financial services industry includes a plethora of technology companies, from new and innovative brokerage platforms like Stockpile, personal financial management platforms like Personal Capital and Wealthfront, new models for banking such as Simple, payments processors like Braintree, and business services such as Swipely. The common thread tying all of these innovations together is the customer-centric vision that brought them into being. Focusing on the consumer, rather than the product, as a starting point is one of the central themes of this book. Through its six chapters, Dan deftly outlines the landscape of the financial technology industry, acting as an accessible yet deeply thought-provoking tour guide to the rapidly changing financial technologies from mobile to social to Bitcoin.

Now more than ever customers demand immediacy, relevance, and personalization in their day-to-day behaviors. These trends are evident in the data and examples that Dan presents in the book. Consumers want to split checks with friends digitally at the restaurant (Venmo), request car service before getting onto the street (Uber), and access their Starbucks loyalty and payment card while waiting in line (Square). These trends will not only continue, but accelerate, as younger generations use their mobile phones for more transactions in their lives and are increasingly willing to share information and data with friends and financial institutions alike in order to get more customized service offerings.

Dan doesn’t just describe the landscape at it exists today, he makes us consider the endless possibilities that tomorrow holds. What if your digital wallet not only pays for your purchase, but also automatically opts into your preferred method of getting rewarded, be it cash back or travel points, when you pay and redeem rewards? What if you received automatic budget alerts for spending on electronics when you either physically or virtually entered an Apple retail store? What if you never had to present your ID ever again to enter a bar or pay with your credit card? Dan invites us to imagine a world without friction, where banking is not an act or a destination but an enabler of everything that we do.

To achieve that vision, new and incumbent players in the financial services industry will need to collaborate, integrate, and innovate together. No one understands these types of partnerships better than Dan. One of the most clear themes of Dan’s career—and, I would argue, one of the most important lessons for financial institutions looking to stay relevant to their customers—is the enlightened idea that banks should seek to actively partner with technology companies with complementary business models.

Dan weaves this point throughout the book with powerful examples, including the Mastercard-branded Google Wallet card and the Yodlee platform for a host of personal financial management tools. At Lending Club, we made the decision to partner and work with banks rather than viewing them as competition. We recognized that banks have competitive advantages in their low cost of capital and pre-existing customer relationships, while we can deliver a better customer experience at a lower cost. This creates the opportunity to partner, with traditional banks working with innovators for the good of the customer. History has shown that major innovations tend to come from outside the banking industry. It will be up to banks to decide whether they will open themselves up to innovation that will better serve their customers, and it will be up to technology companies to work constructively with incumbents.

With Virtual Banking: A Guide To Innovation and Partnering, Dan takes us on a journey through the technological advances occurring in the space today that every banker, investor, entrepreneur, and industry professional could benefit from. His rich anecdotes and interviews make it a colorful, entertaining read. Disruption in finance through technology is a complex subject, but Dan simplifies it and more importantly he encourages us–no, challenges us–to think differently about it.