Vegas, baby! The PYMNTS.com team made the trek to Vegas for the BAI Retail Delivery conference. The weather is varied, the venue is vast, and the conference topic is “value.” Specifically, how can the technology providers, payments networks, card service organizations, and processors that help financial institutions deliver retail banking services to consumers drive more value (read: revenue) from the retail banking business. Why this focus this year? Well, in the event that you’ve been living under a rock, we’ll bring you up to speed on some interesting changes afoot in the business of managing deposits in a few short words. Namely: Durbin. Debit. Potential P&L disaster. (for more on this topic, please visit the Durbin briefing room here).
So what exactly does this assembly of the leading service providers to retail deposit institutions propose to bring to the table to help improve the odds that the income statements of those companies read more like a “P” than an “L?” Well, the answer to that question is broad and varied. For processors and networks, the answer here tends to lie along the lines of driving adoption of new products and services — whether those are eCom platforms (Visa), specialty prepaid programs (Green Dot), innovative personalized card designs (ServerSide Graphics) — or adoption of reconfigured loyalty programs and current services (FiS, FDC, Visa) that can be used to build new service bundles tied to core deposit accounts that may drive new revenue streams.
An interesting answer to this question came from our conversation with Raj Dhinsa, Head of Verizon‘s Financial Services Practice. As we discussed in our last missive from the CTIA Enterprise & Application Conference in San Francisco, the major mobile telephony providers are building practice areas around key industry verticals to deliver packaged solutions customized for the particular business needs of those industries. Of course, the company is providing revenue enhancement and cost benefit support to retail finance in the form of investments in core communications infrastructure, which includes upgrading Verizon’s mobile network to the increased bandwidth capacity, and reliability, of 4G. The company will also open an app store, and provide enhanced SDKs, to support development and delivery of mobile banking applications to Verizon customers.
In addition to the things you would expect from a leading telecommunications provider in these areas, Verizon is also rolling out an interesting managed services concept that transforms the traditional concept of the “bank in a box” into a far more interesting “bank in the cloud.” Suppose you are a retail deposit institution faced with the question asked of a panel this morning: What does the bank branch of the future look like? But you need an answer to that question today — to make your locations more productive in driving revenue but at a lower cost to operate.
What if you could deliver retail services through a transformed storefront, providing expert consultations for consumers across a range of sophisticated products (investments, complicated lending products, and consumer premium services) from a small team of highly-qualified specialist advisors back at the home office via a facilitated telepresence conference delivered to the branch? Can you imagine the potential transformation for a retail bank if delivering a new product to market didn’t have to include extensive branch staff training sessions? What if that same capability came bundled with a physical sales environment that has branch staff walking around with wireless tablets to access services for consumers, instead of the “long line and counter” used for ages? What if that could also include management of the local network, physical access, digital signage, and other value-added delivery services.
Verizon is building a hosted, managed service to provide these capabilities to retail financial services in a turnkey solution from the network “cloud.” That sounds like a way to drive new revenues, improve costs, and change the product/service delivery paradigm in a way that improves the customer experience. And all this from a telephony provider. Wow! Heady stuff. Maybe this kind of solution is where the real opportunities lie today in the intersection of mobile/telephony and retail financial services.
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