Friday, November 19, 2010

Near Field Communication (NFC) on next Android creates tipping point

The announcement from Eric Schmidt of Google about Near Field Communication being in the next Android phones is a major event in the history of Online Banking and Mobile phones in the United States. It will trigger a revolution of new services and capabilities not only in the payment industry but in ways that we can't even imagine yet.


Even more exciting is the announcement by Verizon,AT&T,Mobile have already announced plans for a new mobile commerce network (ISIS) with Discover Financial Services. This means that the infrastructure will get built. While some predict adoption in the US will be slow, even decades I believe this will occur faster than predicted.


My opinion is NFC in phones is a technology tipping point. New features and capabilities for non payment services will begin to appear and innovation will drive this faster then anticipated. There are already demonstrations on opening your hotel door with NFC on your phone. This just scratches the surface of what is to come.


This is the next revolution in context aware computing and augmented reality that will change what mobile devices can do for us. The idea of walking around with a device that understands your desires and needs and provides valuable information and awareness for you. And not just a discount coupon for coffee when you are near a Starbucks. More like knowing that some of your friends are having lunch right next store or reminding you of your anniversary when you pass a flower shop or that your clothes are ready at the dry cleaners. NFC plays well into this experience.


As far as how this all ties into online banking I see it changing the industry in a couple of ways. First, as an influencer, because it will drive the mobile market to more popularity and therefore more people will bank using their mobile device. Mobile banking is already growing faster than web based by a large margin. USAA has over 1M mobile users and BOA over 4M. Banks looking to differentiate their products can innovate in this space to get new customers. 


Second in the possibility of new services and features that banks will be able to provide using NFC. Not just in payments but other services they can dream up.


New commerce networks like ISIS open up the market to new players in the industry instead of just VISA, MAC and AMEX. What will PayPal do? Apple, Blackberry, Microsoft are surely working on NFC announcements as well. One thing for sure is that this announcement by Google will trigger a tipping point and a lot of new momentum to finally start bringing change in the US market which is behind the rest of the world when it comes to mobile. it will be exciting to see what comes out. Look for a string of new and constant announcements from here on out.


The best part about new technology when it comes out is the ideas that others think of on new ways to use it. That's what tipping points are all about.



Tuesday, November 16, 2010

PNC Virtual Wallet

On my quest to find a new bank as my primary bank account I decided to try out PNC's Virtual Wallet. PNC does a pretty good job of marketing Virtual Wallet (VW) and it sounded pretty interesting. I have accounts at many different banks for different reasons but it would be nice to have one great experience.

I applied online and the application process was fairly quick and I was able to fund the account instantly by using a credit card for as little as $25 dollars. Since I was able to fund the account instantly I expected to have instant online access to finally get to check out VW. Unfortunately, I was disappointed when I discovered that I had to wait for them to provide access through the mail?. Why? The Virtual Wallet was not so Virtual after all.

A few days later I received my first correspondence by mail. Was it my access to finally see Virtual Wallet? Nope, only acknowledgement of me opening an account. A few days after that I received another envelope in the mail. Ahhh, surely this was it, I finally get to see it now, right? No, it was my ATM card this time but still no online access.

Finally after about a week and a half I get another letter instructing me how to get access to see the elusive Virtual Wallet. By this time, I was really busy so it took me about another week to get around to sitting down and getting access.

After 2 phone calls to their call center I was finally in and was anxious to check it out. It was obvious that the bank still needs to work on their signup process to get up to speed with Bank 2.0 expectations.

As far as Virtual Wallet is concerned I must give PNC credit for getting out of the box and providing something different. They have really tried to think through the experience and provide a new set of tools   that can make your banking life easier. More on VW in a minute, first I want to talk about what I was most impressed about.

PNC has taken big steps to use social media concepts to connect with their customers. Their Inside the Wallet blog about VW is used to educate about the product, saving money and other great topics in an informal and approachable way. They also used their blog to solicit for new functionality, bugs and more. They even took another step to enable voting to influence features for upcoming improvements. Needless to say the blog succeeds as their customers love the relationship and are happy to have a say.

While the product is not perfect PNC is rolling out a study stream of new features that is pleasing their customers. The vast majority of banks simply don't get social but PNC has taken a big step with their blog.

Now back to VW. I won't go into every detail since you can go on you tube and learn more. (More use of social media, more points). When you get Virtual Wallet you get 3 accounts (at least Virtually) that help you manage your money, avoid fees and encourage savings. There is a spend account, a reserve account and a growth account that allow you to adjust and shift money easily. The tools are calendar centric, showing predicted balances by the day so you can decide what the best day to pay a bill is. The accounts are linked so if you do manage to overspend, money is automatically transferred from your reserve account or growth account as a last option.

VW tries to give you a complete picture of your finances and keeps improving the experience. Since it does not have account aggregation tracking your complete financial picture works best if you keep all your accounts in VW. VW definitely takes some getting used to and takes awhile to learn. It seems best suited for anyone with a tight budget or living paycheck to paycheck.

This brings in another one of VW's best features. Virtual Wallet student is perfect for parents or college students to manage their their money. This is the perfect tool for this long standing problem of parents with college kids. Also, a great way to pull in the parent's money into the bank as well as the college students when they graduate and begin their careers.

I must say that VW online experience was a little sluggish even across a high speed Internet connection. On the positive side, PNC has released mobile apps for iPhone, droid and balckberry alomg with a web based mobile channel. Their iphone app is different from the boxy apps that so many other banks have.

Overall PNC has managed to create a loyal following and take a solid step forward with a high retention product using social media as a tool. But is VW good enough to become my primary checking? Not sure yet, while I check it out some more, I think I will check out USAA.

Stay Tuned




Mobile Banking