The biggest banking show of the year, BAI’s Retail Delivery www.bai.org was held Nov. 16 to 18 in Las Vegas. Here’s what caught our attention this year.

1.   Channel integration: As mentioned on page one, we were smitten with the “teller assist” hardware from Source Technologies www.sourcetech.com . Its vision: teller lines soon look like airport check-in counters, a mix of touch-screen automation with human support. One teller can do the work of two or three, as the customers do most of the work feeding deposit items into a terminal that scans them and displays an image on the screen for verification. The company says payback is one year.

2.   Security issues: Jim Van Dyke Principal of Javelin Strategy delivered two sessions on the three Fs: fear, fraud, and phishing. His new safety scorecard even made the Wall Street Journal the day before he spoke (see WSJ, Nov. 16). Of the 39 banks surveyed by Javelin, Bank of America came out on top with a 71 score on the 100-point scale (see Table 3 below).  One of Van Dyke’s key themes: eliminating mailed billing and financial statements. It’s the one avenue of fraud and identity theft that’s relatively easy to avoid while saving the financial institution a substantial amount in paper and postage. Users should be allowed to turn off paper statements and should be encouraged to avoid putting any paper into the system by using debit at the point of sale and using electronic options to pay bills. You can access a synopsis of the research at www.javstrat.com  or purchase the entire report for $2500.

Table 3

Top Scoring Financial institutions on Javelin’s Identity Fraud Scorecard

maximum regular score = 100

Source: Javelin Strategy & Research presentation at BAI Retail Delivery, 11/18/04

*39 financial institutions evaluated by mystery shoppers across 44 criteria; scores ranged from 12 to 70.5,
max=105 including potential 5-point bonus, see below

**Wells Fargo had the top score of 73 across the three evaluation categories; however they received a five-point deduction for using the social security number as the default username; financial institutions could also receive a five point bonus for not allowing nine-digit numerical usernames (so users couldn’t use social security number); other than Wells Fargo, we do not know if any of the above financial institution received bonus additions or deductions. If so that could mean that their component scores were different that what we deduced above.
 

3.   Account-to-account transfers: CheckFree (see also number 7 below), Yodlee, and CashEdge were on the floor discussing their latest improvements to interbank transfers. CheckFree’s new bill payment platform includes interbank transfers, quick payee setup, and user-input payment reminders. CashEdge, the leader in the burgeoning A2A field, even landed another top-10 bank at the show. They now power Citibank, Bank of America, and several yet-to-be-announced large banks. By next year’s show, the company expects to be powering A2A for five of the top 10 U.S. banks.

4.   Prepaid cash: American Express and WildCard Systems www.wildcardsystems.com  along with Visa and MasterCard of course, were on the floor pitching prepaid gift and travel cards. A great opportunity for online banking operations to monetize their user bases. To see the future of gift card delivery online, check out payment processor iPay’s system  https://www.billpaysite.com/adv/giftpay/main.asp

5.   Branchless banking: Deloitte director Michael Raynor who co-authored The Innovator’s Solutions with Clayton Christensen, used ING Direct as an example of a potential disruptive technology in the area of branchless banking. He said the jury was still out, but banks would be wise to keep an eye on the ramifications from ING’s success. We couldn’t agree more. And imagine if an ING Direct-like company sprinkled a few Source Technologies truly automated tellers (see #1) around town, it could be a viable business model. One that functioned as a true branchless bank servicing transaction accounts as well as savings deposits.

6.   Automatic savings: ShareBuilder was on the exhibition floor again, with a nice location. They are really on to something by providing a low-cost way for investors to get involved in equity markets while simultaneously introducing them to the power of automated savings. ShareBuilder is marketing slick new account kits complete with a book, Smart Money Magazine subscription, and $30 in cash for the first investment (see screenshot below). It’s a great product to market during the holidays as parents, grandparents, and others love the ease and value of this politically correct gift. Wells Fargo and ShareBuilder have been emailing well-designed holiday sales messages for the past few years.

Wells Fargo is selling a ShareBuilder “Investor Starter Kit” which includes a subscription to Smart Money, a Wall Street Journal book, and $30 cash to invest. Total cost is $24.95, an excellent value.

7.   New CheckFree “bill management” platform: CheckFree continues to improve its widely used platform with the goal of making it a complete “bill management” center. Additions coming in version 4.1, available in Q2 2005 include:

•          user-entered payment reminders
•          integrated inter-institution transfers
•          quick payee-setup that can be set up with just a payee phone number
•          integrated checking account balance

Still lacking: security preferences for setting up a “firewall” around the user’s payment system.

CheckFree’s consumer site leads with a powerful benefits-oriented graphic and headline,
”Delete: Paper bills. Add more life.” Then immediately to the right is someone reading a book on the porch, obviously enjoying their extra leisure time.