The Bankwatch

 Europe focussed article talks about slow pick up of PC based Internet services, as young people live by their cell phones.

They are more competent and regular texters than their parents will ever be, and have started to use their phones for a whole range of functions -buying ringtones, downloading computer games, social networking - that older generations scarcely know exist, let alone want to try.

But young mobile phone customers are still relatively slow to embrace internet-based services, and networks will have to reduce the cost of such services significantly, and speed up their delivery, if this most impatient of generations is to be brought online while on the move.

Source: Young, mobile, but not yet online-News-Tech & Web-TimesOnline

At first I thought the Times headline deceptive.  That these young folks are online … their input device is merely different;  a cell phone, not a computer.  But further reading of the article supports the title, and the background research from Forrester, suggests young Europeans are not keen to have internet on their phone.

The customer, however, remains to be convinced. Despite 61 per cent of young people surveyed saying that they had internet on their phone, only 34 per cent wanted it on their next phone — in comparison with 65 per cent who wanted an MP3 player and 44 per cent who wanted Bluetooth.

If this research is accurate (I am somewhat skeptical) then consumer patterns and device usage will require Banks to ensure their online banking services are served up on appropriate channels.

I have been getting a fair bit of updates to the list of online banks post, so I am updating it as we go.  I am going to stick it in the sidebar for reference.

One of the updates was from Michal in Poland, and as part of that update, here is a summary of how financial transactions between people occurs there.

It’s a different banking world We don’t have to use PayPal. We send money to another bank account via wire transfer and don’t use checks or bill payment. Everyone uses their bank account number.

Transfers between banks can be done 3 times a day and you have this money the same day on another bank account! And it’s very cheap – free or only 0,15 $ (about 0,5$ for companies, but you can find cheaper). Although only 2/3 Poles have a bank account, online banking is very strong.

Thanks to Michal – PRNews

Credit cards have attained the position of status symbol according to this new survey of 1,400 credit card holders which was conducted in the UK, Germany, France, Spain, Italy, Russia and Poland in July and August 2006 on behalf of MasterCard by KRC Research 

Consumers are more likely to use a card that they have an emotional connection to, whether it’s linked to a luxury brand or their favourite football club, particularly if that card offers rewards to help maintain or attain a particular lifestyle.

Source: Finextra: MasterCard survey: Consumers want credit card rewards all for themselves

Some consumer based findings I found useful:

• growing preference for luxury rewards
• strong demand for financial incentives
• customisation of rewards is the key to growing customer preference for co-branded credit cards
• third of European consumers are attracted to a credit card that demonstrates spending power and prestige (34%), which is most popular among Italians (55%)

tags: credit+cards, rewards

A relatively small bank in Italy (15 Billion Euros in deposits) takes on a big challenge with enviable outputs.  It appears to by multi channel, and involving full automation of account opening, and key processes.

Finextra: Banca Marche signs IBM to revamp branch network

Italian banking group Banca Marche has awarded IBM a five year contract to overhaul and automate its retail branch network.

Financial terms of the deal were not disclosed.

IBM says the project will integrate customer data from the banks’ multiple sales channels such as internet and call centres and will automate applications, loans and account opening processes. The new branch framework will be based on J2EE open standards and built using a SOA approach.

Under terms of the agreement, IBM will also manage the bank’s IT infrastructure and train employees on the new systems.

Massimo Bianconi, GM, Banca Marche says the new framework “will allow Banca Marche to offer more services to its customers, and to lead the Italian banking industry in developing open and innovative solutions”.

Technorati Tags: bank+automation

Good perspectives from Mark Garvin chief administrative officer JPMorgan Chase AG, talking about the European space post SEPA.

Finextra: comment – Payments 2016

Speaking at the first annual EBAday payments conference in Frankfurt in June, Mark Garvin chief administrative officer JPMorgan Chase AG, outlined a vision of the payments industry in 2016, a time when paper cheques are non-existent, payment by mobile phone is commonplace and biometrics have wiped out fraud.

Faster cheaper, simpler.  He talks about realtime information, and movement of money. Float is eliminated.  Also greater standardisation.

Finance directors and treasurers care about managing their working capital, so they  envision 2016 as a time of better, faster, and cheaper means to manage their critical   business processes and to optimize working capital. Payments are embedded in these   business processes so they expect real-time payments and information transparency –   knowing exactly where a transaction is at all times – regardless of the country,  instrument  or channel by which it was originated. They see fewer banks, fewer payment   systems, and – in the words of one client – worldwide, end-to-end standardization.     Standardization was also top of mind with technologists. They see 2016 as a time of   common utilities, a single set of open standards, a single common interface into their various banks and the payment systems, and fully electronic transactions with Straight   through Processing.

Relevance to Bankwatch:
Background information for planning.

Technorati Tags: SEPA, payments

Good stats on international payments trends, courtesy of American Banker.

Technorati Tags: payments

Wachovia continues to achieve success, in this case a survey amongst Bank executives.

Wachovia Ranked No. 1 in Overall Satisfaction Score | Nachrichten |

CHARLOTTE, N.C., May 15 /PRNewswire-FirstCall/ — Wachovia Corp., the fourth largest banking institution in the U.S. based on assets, received the “highest institutional satisfaction score” among banks that offer correspondent banking services. Wachovia’s first place ranking is based on a survey of 500 banking executives in 78 countries by the market research firm FImetrix for its annual “FImetrix Global Report on Bank-to-Bank Services” report.

Wachovia placed second in the 2004 report.

“Being named the bank that provides the best overall satisfaction to clients is a significant achievement and we’re proud. We work hard to support our customers with both innovative product solutions and attentive client care,” said Michael Heavener, the head of Wachovia’s Global Financial Institutions and Trade (GFIT) business.

Wachovia’s Number One ranking is a consolidated score based on the answers to a series of survey questions that looked at product quality, customer service, pricing, commitment to a long-term relationship, extension of credit, the ability to customize products, internet capability, continuity of operations, in-market customer service and risk management assistance.

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Interesting observation on European business, from Google.

Google says European businesses don’t get net >> .:thebusinessonline.com:.

Speaking at the first of a series of “The Business Talks” lectures, organised by The Business, Nikesh Arora, Google’s vice-president of European operations, said corporations in Europe risked losing revenues through failing to understand how the internet is changing the way goods and services are sold.

“Many businesses make the mistake of thinking their website should be a corporate brochure rather than a place to sell their products,” said Arora.

Followed up by some useful statistics.

According to Arora, 10 years ago there were 16m people online, while
today there are 1bn, which still only represents 15% of the world’s
population. He added that over 80% of Ford customers had researched
online and that e-mail is the primary way to communicate with family
and friends for 17% of Europeans.

He added that the internet was
becoming a leading entertainment medium. In the first 12 weeks of 2004,
he said, 6.1m CD singles were sold in shops, compared with 227,000
downloads. But in the first 12 weeks of 2006, 3m CDs were sold against
a staggering 10.5m downloads.

The European Commission said customers are paying too much because the industry was still split along national lines and new card providers find it hard to set up shop.

EU: Credit, Debit Cards Charging Too Much

BRUSSELS, Belgium – Credit and debit cards such as Visa and MasterCard are racking up “abnormal” and “excessive” profits for banks, European Union antitrust chief Neelie Kroes said Wednesday.

The report makes the connection between the high merchant fees, and consumer prices.

She said the industry should also rethink the way it sets prices. “Banks collectively set fees that tax businesses and ultimately all consumers for every card payment,” she said. “As a consequence there is not enough market pressure on fees and retail prices are inflated due to card payments.”

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European banks continue to lead the way on chip.

Banking Briefs – Business news

Bulbank said on April 6 it successfully ended the needed certification and can now process chip cards in the country’s network of ATMs. As of now, more than half of the total ATM network has been upgraded, mainly in the bigger cities and seaside resorts.

Daily, more than 100 chip card transactions are processed, and the number is expected to increase with the summer season, the bank said in a statement. Bulbank is one of the first European banks migrating successfully to the new messaging standard that MasterCard implemented last year – IPM (integrated product messages).

The standard was adopted after a decision of MasterCard to unify its operations in Europe and North America. The IPM standard is now a mandatory for bank as prerequisite to upgrade to chip-based cards.