Kristin R. Moyer
Research Director
11 years at Gartner
18 years IT industry
Kristin Moyer is a research director in Industry Advisory Services/Banking and Investment Services. She has more than 17 years of experience across the global high-technology industry in a variety of roles. Ms. Moyer's research coverage includes card… Read Full Bio
by Kristin Moyer | September 16, 2010 | 2 Comments
Stessa Cohen here. A couple of years ago, we went through the initial shockwaves of the financial crisis. A couple of financial services firms like Lehman Brothers and some others suddenly went out of business. Consumers had questions, were fearful of what would happen to their retirement and bank accounts.
Remember that?
Two years ago, I, along with other Banking research colleagues, wrote several posts about the importance of transparent, readily available customer communications and why it was necessary during the financial crisis. And why it might be important for banks to address problems upfront.
Now, Chase’s online banking functionality has been offline since Monday evening through much of Wednesday (13-15 September 2010) for a number of days. On 16 September, an explanation appeared sometime on Wednesday evening or Thursday.
I think I’ve been through this before.
Let me be clear: Fixing the problems are uppermost on the minds of Chase IT and product staff right now. I am sure — I know — that they were and are extremely busy and working several 16 or 20 hour or longer days. But the lack of communication left a void. And a missed opportunity.
The financial crisis offered banks an opportunity to reevaluate their customer communications and figure out to incorporate new means — eg social media — into their repetoire. Some did. Some did not.
Instead of hearing about the outage directly from Chase, customers probably read about it on twitter. And from maybe more traditional, reliable news sources, suc h as online newspapers (disclosure: this article does quote me ), and news aggregation sites. Over a couple of days, consumer panic, fear, anger grew, which may lead to more serious fallout from the outage (from the NY Times):
A system outage of this length communicates to me that they really don’t have a handle on their systems,” said Vic Caterina, a Chase customer in Chicago who does all of his banking online. “My relationship with Chase is now under reconsideration.”
Direct communication with customers might have reduced customer frustration that grew to anger and threats and thoughts about switching banks.
So, what’s the answer? A twitter account or Facebook page ? Social media is going to solve Chase’s (and other bankss) problems?
Yes: If your customers are there. But remember, consumers go a lot of places. They are at Youtube.com and Linkedin. Are those potential places to communicate?
Communicate via all available methods. Don’t expect your customers to come to you.
But if they do, inform them. Not by press release, but straightforward, honest as you can communication. Make it easy and simple for customers to know where to find you.
Plan for customer questions and concerns at all channels and destinations, whether at the branch, drive-up window, ATM, telephone banking, contact center.
Remember the power of the social network. Use social media to spread the word. Customers can help by spreading the word to their friends and contacts in their social networks. Doing so will also help the bank manage the overflow of customer demands on branches and contact centers, for example.
Too many social media outlets to manage? Might be time to consider tools to manage that. Of course, Gartner has you covered with the Hype Cycle for Social Software 2010
I hope the IT problem have fixed the tech problems. I do. I also hope others at the bank see the customer communication opportunity and seize it.
Category: Uncategorized Tags:
by Kristin Moyer | July 28, 2010 | Comments Off
The Financial Access Initiative (FAI) believes that 2.5 billion adults worldwide do not have access to formal financial products (such as savings accounts, insurance) with either a traditional (regulated bank or carrier) or alternative financial institution (such as a microfinance institution). Approximately 90% of the unbanked live in Asia, Africa, the Middle East and Latin America.
Financial institutions have struggled to provide financial services to the poor because of lack of credit history, lack of collateral, no proof of identification, lack of proximity to traditional financial services locations – and perhaps the biggest concern of all, profitability.
Despite these barriers, an ecosystem beyond microfinance institutions has begun to develop in many emerging markets. This ecosystem is comprised of financial institutions, retailers, mobile operators, airtime resellers, lottery branches, post offices and many others. But have any unbanked initiatives really been successful yet, or is a lot of money being spent without results?
It depends on the measurement you use for success – but in general, the answer is: all of the above!
Many (perhaps even most) financial services providers are struggling to make their unbanked initiatives successful. However, there are at least five examples of unbanked initiatives that have produced positive results: Grameen Bank, ICICI Bank, M-PESA, GCash, Smart Money and Bolsa Familia Conta Facile.
Grameen Bank
Bangladesh
Repayment rate: 98.6% repayment rate
% of borrowers that have crossed the poverty line (according to Grameen Bank): 64%
M-PESA
Kenya
Mobile money
9 million wallets (~25% of the population!)
GCash
Philippines
Mobile money
1.2 million wallets
Smart Money
Philippines
Mobile money
9 million wallets (~10% of the population)
ICICI
India
Self-help groups
Cost effective operating model
Also partnering with MFIs
Bolsa Familia Conta Facile
Brazil
G2P
Caixa Economica migrating G2P recipients to conta facile (Visa debit card)
10 million accounts (~5% of the population)
Category: Executive Decisions Tags: gcash, grameen bank, icici, m-pesa, mobile money, smart money, unbanked
by Kristin Moyer | June 22, 2010 | Comments Off
Card management software is at the heart of the life cycle of a payment card, whether a financial institution is leveraging the card management software in-house or whether a processor is leveraging card management software to process transactions on behalf of a financial institution.
A high level of card management software decision cycles is currently under way on a global basis for a variety of reasons, including the sunset of Base24 (from ACI Worldwide), regulatory change, migration to the EMV standard and others. Financial institutions should use card management software replacement as an opportunity to move more deeply into payment modernization, rather than to replace like-for-like software. Product road maps, therefore, deserve special attention and should include a strategy to either interoperate with or become a payment services hub.
Banks and card processors that are replacing their card management software should leverage our 2010 MarketScope (available to Gartner clients), just released today, to identify the strengths and weaknesses of vendors that provide multiregional solutions.
Category: payments Tags: base24, card management software, emv, regulatory change
by Kristin Moyer | May 6, 2010 | Comments Off
Stessa Cohen here. There’s an infamous episode of Sex and the City in which one of the main characters, Miranda, talks about a recent date. At the end of the evening, the man in question says to her, “I’ll call you.” The four friends, Carrie, Samantha, Miranda and Charlotte discuss the merits of this “I’ll call you” and analyze all the possible reasons he didn’t prolong the date or call her. Berger, Carrie’s beau who is also sitting at the table, gives his blunt “guy” interpretation, “He’s just not that into you” — which turns out to be true. Miranda listens and uses Berger’s insight to move from preoccupation witha guy who didn’t want to date her to her next date.
In a recent article “A New Goal: Checks without Paper” (behind a paywall) The American Banker analyzed all the ways that banks can leverage their existing legacy check processing infrastructure to create “electronic checks.” Sex & the City may be off the air, but the banks are the new drama queens creating this hot air around these “new” checks: “Native electronic transactions” “electronic payment orders (EPO)” “Digitally Originated Checks,” or DOCs.
But you know what? Consumers feel about paper checks the same way Miranda’s date felt about her: They are just not into checks. And they don’t plan to be anytime soon. They aren’t looking for new ways to write checks. They want more personalization and they want to be able to manage their money (behind paywalls too).
How do we know this? SmartyPig’s goal-based savings account growth ($400 million in deposits in a couple of years), the continuing decline of paper checks and growth of electronic payment methods (According to the US Federal Reserve 2007 Payment Study (which covers payments made 2003 – 2006, so it’s already out of date) paper check usage declined by 6.4% while debit card usage increased 17%), the swell of hype around person-to-person (P2P) mobile payments.
Obviously checks and check processing are an investment that banks care about. But should they be focused on how to drive customer interest in a payment methods they aren’t interested in? I’m working on research now about why they should avoid re-treading old technology, old methods, to extend the value of checks — and why banks should focus on what their customers are doing, how they are doing it and how developing trust in mobile-based banking services may be key.
Category: Customer operations payments Tags:
by Kristin Moyer | April 29, 2010 | Comments Off
David Furlonger and Peter Redshaw here….Yesterdays Australian Financial Review detailed a story about three banks that intended to form a consortium to force change in the provision of technology services from major IT providers such as HP, Microsoft, Oracle and IBM.[ http://www.afr.com/p/business/technology/banks_seek_billions_in_it_savings_JBwXh6ZmMhhRLrGUMBZCSK]
There seem to be two different components to this story.
First is demand — the issue of vendor supplied technology costs and an attempt by these three organizations to directly impact buying power by grouping their requirements and forcing major vendors to change their service provisions and costing models.
Second is supply — the potential for a group of banks to cooperate in the provision of cloud computing (e.g. infrastructure as a service) to, we assume, other industry participants.
With respect to the first issue, the focus on cost optimization has not dissipated even if the financial services industry is somewhat more stable than it was a year ago. The attempt by these three banks to force pricing changes is evident that CIOs have not lost sight of the need to extract greater value from the services they offer to the business. Productivity improvements are a major component of those initiatives as highlighted in the 2010 Gartner CIO Agenda [Banking CIO Agenda: Getting to Grips With Transformation]. Whether three banks can speak with one voice and so have more power than one remains to be seen. And, whether any reaction from the vendors is strategic in terms of them fundamentally shifting their delivery model and pricing paradigm, or more tactical in terms of just short-term price improvements is also open to question. Our hypothesis is the latter is more likely to occur than the former because of the negative impact that a strategic shift will have on annuity revenues.
The second issue is arguably a lot more interesting, however it isn’t completely novel in the industry – more of an incremental development on previous activities. For example, several Tier One banks have provided infrastructure capacity for equity trading by brokers for many years and others also have a variety of long-standing and similar, white-labelled services for brokerages. Custodian banks and exchanges also provide shared infrastructure and co-location for trading platforms. Independent of the banks there are shared environments that combine networks, data and applications such as BT-Radianz, SunGard STN, Bloomberg and Reuters and SWIFT that have existed for some time.
Clients need to exercise some caution before assuming this development is suddenly going to transform their technology sourcing strategy. Cloud computing is still over-hyped and often used as a term to erroneously describe the evidence of something new when this may not be the case. For example, every bank that offers a payment acquiring service can – at a stretch – be described as involved in cloud. This isn’t new – payment services (whether credit card for retail, or SWIFT based for more B2B applications) have been around for years – almost since the inception of the Internet. Similarly, some of the shared service models in place in the Nordics for the mainstream banks, or Germany and Spain for the savings banks have operating models that might tenuously satisfy requirements for a “cloud”. The cloud may be an enabler, but clients have to look at the main business purpose and the desired results of these efforts before jumping to conclusions.
Category: Uncategorized Tags: cloud computing, Consortia, Infrastructure, sourcing
by Kristin Moyer | April 14, 2010 | Comments Off
Mary Knox here. I was excited to see the announcement that, beginning today, a brand new global enterprise architecture (EA) study is being conducted by the newly formed EA Research Center at Penn State University, in collaboration with Gartner and other enterprise architecture associations. Gartner will be receiving a copy of the results as an input for our research – and I personally am hoping to get a subset of the data specific to financial services firms so we have one more point of reference as we study and forecast architectural trends in the industry, and identify best practices.
The study focuses on three areas related to enterprise architecture:
1) EA Framework Usage – a profile of how the popular EA frameworks and methodologies are used in how they have been adapted and modified into “hybrid” approaches
2) EA Value Measurement – a profile of how the value of enterprise architecture is measured in a large cross-section of organizations and industries
3) Demographic of People that Lead EA Functions – a profile of the people in leadership roles in enterprise architecture
Please forward this link to the lead architect in your firm: http://www.surveymonkey.com/s/EASURVEYLEADERS, and ask him or her to complete the survey. This is a great opportunity to participate in a collaborative effort to better understand trends and best practices in enterprise architecture – both overall and hopefully specific to our industry as well!
Category: Uncategorized Tags: best practices, EA governance, enterprise architecture, financial services, framework, value measurement
by Kristin Moyer | April 8, 2010 | Comments Off
Mary Knox here. As we launch our survey of reference data management software vendors, I am struck once again by the level of fragmentation – and confusion – in this marketplace. Many of our clients have this same realization as they pursue reference data management centralization initiatives and look for a solution that can address all of their market data needs.
One of the outcomes of this research will be some segmentation of the available solutions based on focus – front office vs middle and back office; particular use cases; geographies served, etc – and on the primary business of the vendors (general master data management, front office vs middle and back office suite providers, specialized investment services reference data management solution providers).
I’ve compiled quite a list of vendors to whom I am reaching out. My questions to you:
- Are there particular vendors you would like us to invite to participate?
- Different vendor segmentations or use cases you would like us to explore?
Send me an email or post a response here!
Category: Uncategorized Tags: reference data
by Kristin Moyer | March 18, 2010 | Comments Off
Citi recently completed a mobile payments trial in India that has received a lot of press. The trial was a 6 month Tap and Pay project that involved 250 merchants in Bengaluru. Most of the articles I’ve read on this trial are saying it was wildly successful. I did some math to see if this was really the case.
A total of 43,257 transactions were made over the 6 month period. Assuming this is approximately 180 days, that means somewhere around 240 mobile payments occurred per day. With 250 participating merchants, this comes out to <1 transaction per day per merchant.
The Japanese market is often cited as a success story by proponents of contactless and mobile contactless solutions. However, looking below the surface reveals another reality (Gartner customers please see here). Japanese consumers are estimated to make 1.8 contactless retail transactions per month per contactless device, and 4.7 customers make a contactless transaction on each contactless point of sale (POS) per day. This is not yet a success story.
The estimates for the Citi trial in India and the Japanese market don’t imply that adoption is insignificant, but they don’t back up the success stories depicted in some publications and research reports.
Category: payments Tags: mobile payments
by Kristin Moyer | March 10, 2010 | Comments Off
On day three at BAI Payments Connect, I attended a session about competing for deposits and relationships in turbulent times. A couple things about this session stood out to me.
Data shows that many US banks are waiting to innovate depending on what happens with regulatory change. What bothered me about this the most is the implication that innovation is dependent upon external factors. Innovation is not something a bank should do at one point in time. US Bank is a great example of a bank that is constantly innovating, constantly testing and piloting in payments. They do not place big bets, but rather innovate continuously.
Another thing that stood out about some of the data I saw was that there is a disconnect between what banks are thinking, and what consumers are thinking in the US right now. For example, banks are much more confident that customers are preparing to resume normal financial behavior than customers are. That’s a big disconnect. Also, customer trust in banks is very low, which is not a surprise, but the disconnect is that trust is even lower than banks think it is. And this is particularly true for large US banks. Customers even went so far as to say that large banks do not deliver basic financial services such as checking as well as regional and local financial institutions.
At Gartner, we believe that payments is a key way banks can begin to rebuild customer trust. We have done research that shows that consumers do trust their debit card provider and even their credit card provider more than non-bank payment providers. Data I saw today shows that banks are planning to invest in customer experience. Not that improving customer experience is bad, but banks need to get a better handle on the levers that will really improve the customer experience. Payments is one of those areas.
Category: payments Tags: bai
by Kristin Moyer | March 3, 2010 | Comments Off
The keynote for day two at BAI Payments Connect was given by Dominic Venturo of US Bank, and was focused on innovation (“A Willingness to Try New Things”). US Bank has a dedicated team for emerging technologies and markets that develops, pilots and refines product innovation. One of the interesting things this team does is track both payments-related innovations and non-payments related innovation. For example, they are looking at things like augmented reality, chumby, siftables, slighbox, Wii/Xbox, Tesla and Volt, iAnything, netbooks, Web-connected appliances and 2D barcodes and their impact on payments.
Some of the contactless and mobile initiatives US Bank is working on include near real-time transaction alerts (set at a threshold selected by the customer, for example for all payments, Internet payments, international payments, etc.), instant issue, Visa payWave cards, Visa Debit Micro tags, Visa payWave enabled stickers and multi-application contactless payments and access control (that can be used for identification, purchases and secure facility access in a work/campus setting).
What I liked most about the discussion was the innovation myths US Bank identified, including: innovation is bleeding edge or high risk, innovation is expensive, innovation requires high technology and innovation leads to “home runs.” US Bank is focusing on a portfolio of activities that are tested and piloted, thereby avoiding big bets on losing propositions.
Category: payments Tags: bai
