Daily Digisphere

VML--What We Do

BANKING INDUSTRY
With 80% of Gen Y web users banking online, they are comfortable performing financial transactions and lead the way among consumers making online the top banking method in the US. They are also in the vanguard of those opening a variety of financial accounts on the web, including credit cards, personal loans, savings accounts and debit cards. They are also more likely than any other generation to consider switching banks and to recommend their primary bank to others, making them an attractive target for financial services marketers.

MOBILE BANKING IN THE MIDDLE MARKET BANKING SEGMENT

PR Newswire, August 25, 2010

TNS research company released results of its latest survey related the use of web-based tools, mobile banking and social networking in the middle market banking segment. The survey, conducted among senior financial executives, reveals a new shift in behavior.

While overall awareness and usage of mobile banking applications for business-to-business transactions is currently modest 40% of executives surveyed said they were willing to consider using mobile banking solutions in the future. Viewing recent transactions (84%), having the ability to transfer funds (78%) and being able to receive alerts on account activity (76%) are the features of mobile banking that considerers felt would most help their businesses.

Security is of principal concern for current non-users of mobile banking applications with 61% of those surveyed feeling the lack of security or the potential of incurring malware programs like viruses would prevent them from using online banking solutions. Other barriers include cost and technological limitations, where 26% feel that using mobile banking for their business would be too costly and 21% feel that they are limited by their technological infrastructure.

With social networking, online chats, and blogs becoming increasingly embedded in the fabric of daily life for many people, it's no surprise that there is some traction in this space among commercial banking relationships. However, most banks are not maximizing the potential social networking can bring in engaging clients and prospects. While half of all Middle-Market executives use online social networking in their personal lives only 10% say they are aware of the bank's presence on a social media web site.

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PICTURE THIS: DEPOSIT YOUR CHECKS VIA E-MAIL

The Boston Herald, August 27, 2010

Got a check to deposit? There's an app for that. Customers of Chase Manhattan Bank have been able to take a photo of a paper check and e-mail it to the bank for deposit for more than a month now, according to Chase spokesman Mike Fusco. Chase calls the feature “Quick Deposit,” but it's widely known as Remote Deposit Capture, or RDC.

So far, Chase is the only bank to offer RDC via mobile phone, but customers of big financial institutions can expect to eventually put it to use in local branches. “The question is no longer if or even when; it's how and how quickly,” said Teresa Epperson, a partner at Mercatus, a financial services consultant. She said most banks, local and national, have mobile applications in the pipeline. In the 1990s, when banks were starting to offer online banking, they had to push customers to use the service. Now that people are accustomed to managing other parts of their lives via smartphones, customer demand is pulling the banks into mobile services.

A Mercatus study on RDC found a third of U.S. customers either used or would consider using mobile banking applications. The study projected more than half of U.S. customers would adopt mobile banking by 2015. Still, it's not all upside. Banks are concerned about the risk of fraud with RDC, but demand for the service is too great to ignore, Epperson said. “Just like all other areas of the business, the risk of fraud has to be managed,” she said.

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ELDERS FIND COMFORT IN PAPERSPACE

Pittsburgh Tribune Review, August 26, 2010

It's probably age. Get a few years on you, and it's hard to feel 100 percent at home with computers. Yes, even at this date. Young people flip around in cyberspace like seals, but for many elders the march of progress might well have stopped at paperspace. They feel better in paperspace; it's the old neighborhood. They are used to financial records being on paper. Important data in cyberspace don't seem as real -- and at times fall victim to mysterious disappearances and misappropriations.

A stock certificate, a bank statement, a last will and testament -- all of these want to be nailed down in black and white. Can 100 shares of ExxonMobil or Walmart in the form of "bytes" have any credibility as proof of ownership in oil wells or retail stores? A stock certificate has substance. It crinkles. It can be carried in a pocket (be careful, though), or stored in a steel vault.

Certainly, "on-line banking" would benefit many a senior. It saves time and postage; we should all do it. And yet didn't a vice chairman of a great Pittsburgh bank once confess to a reporter that he'd never even used an ATM? For him, banking meant dealing with human beings. Speed-of-light electronics could not compensate for the lost reassurances of paperspace: a checkbook and monthly statement.

The citizens of paperspace were raised better. No "overdraft protection" for them; they never overdraw. They deduct from their bank balances the moment they write a check, the first line of defense against overspending. Elderly people shake their heads when young people stand in store lines at midnight for the latest gadget or software. What do they care if a new cellphone plays songs or not? And hand-held screens that can display 1,000 library books stir no cheers from readers of a certain age. Rather, they fear for the future of real books and the stores that sell them.

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HACKERS ATTACK MOBILE BANKING

Long Island Business Long Island, NY, August 18, 2010

Just as the number of households conducting banking online continues to rise - about 43 million - the threat from e-thieves determined to perfect their cyber robbery skills is growing at an exponential rate, with a new emphasis of banking from mobile devices. According to Panda Security, a Madrid-based antivirus software supplier, the number of banking "Trojans," or malicious software programs designed to pilfer online bank accounts, rose to about 65,000 in December 2009, up from 4,300 at the beginning of the year.

Tech breakthroughs make banking easier and quicker, but they call for added vigilance, said Jim Breen, senior vice president of information technology at Bethpage Federal Credit Union, noting the increased security challenges created by mobile devices.

Online banking became available to customers looking for an alternative to the traditional method about 15 years ago. Initially intended to offer customers the ability to bank from the comfort of their home computers, the popularity of online banking spiked along with the popularity of the Internet. Today, while the majority of people recognize the risk and refrain from conducting banking from public Internet kiosks, the security of mobile banking applications has become a real concern. An example: Last month, Citigroup announced its mobile banking app for Apple's iPhone inadvertently saved customers' account information in a hidden file on users' phones, creating the potential for fraud.

The biggest challenge with mobile banking, Breen said, is educating a growing population. "When they log out of their account, they need to see the log-out screen," he said. "That's when you know you could leave your phone on a table and not have to worry about someone finding it, hitting the back button and seeing your balances." Tara Burke, spokeswoman for Bank of America, said it maintains the same security platform for its mobile banking as it does for its online service. "No information is stored on your phone, so if it gets lost, there's no threat to your bank account," she said.

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KNOWING THE MARKET HELPS NICHE BANKS THRIVE

The Daily Record Baltimore, MD, August 12, 2010

In a time when customers can control their money 24 hours a day with online banking, mobile apps and ATMs, it's hard to imagine a bank could survive without a website, debit cards or more than a single location. But a handful of one-branch banks that serve niche markets have been able to weather the Great Recession and other pitfalls over the years.

In the State of Maryland, for example, banks like 131-year-old Fairmount Bank, 114-year-old Glen Burnie Mutual Savings Bank and the 126-year-old Midstate Federal Savings and Loan Association have been able to thrive by keeping overhead low, maintaining conservative underwriting and providing a level of customer service that has kept people coming back despite what the big banks have to offer.

According to a recently released study by research firm Markets and Markets, there are more than 6,000 community banks in the U.S., with more than 50,000 branch locations. And, while community banks have seen their share of total deposits drop to 12.4% in 2009 from 33% in 1992, the company predicts the trend will reverse. "The economic recession proved to be a boon for the community banks, as consumers lost faith in large financial institutions and, with the failure of the 'too big to fail' theory, are moving their deposits back to community banks," the study said.

As technology like online and mobile banking continues to become the norm, many smaller neighborhood banks have been slow or even resistant to adopt such changes for reasons including lack of customer interest and hesitance to absorb the resulting costs. Others hold on to mainstays of banking that have been abandoned by larger banks over the years. The goal is to provide customers with a level of service they might not get at a larger institution.

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