Mobile Banking Biggest Driver for Millennials

Posted By: Elizabeth Rowe | October 12, 2016 | 0 Comments

The Digital Generation

September 2016, FICO Survey

Credit unions are used by 20% of Millennials under the age of 25 but by only 10% of those between 25 and 34. Why? As they get older, Millennials have more complicated financial services needs and turn to national banks for their offerings. Also, many Millennials turn to national banks and virtual banks because of their robust mobile products. And how important is mobile? There is a direct correlation between “more satisfied” customers/members and their interaction with their financial institution daily via mobile. So if we are going to get them in the door, keep them satisfied and buying additional products from us, our mobile apps must be as powerful and helpful as those offered by the big and/or online banks.

Compliance, Security and Mobile Top Bank’s Tech Spending List

October 5, 2016, American Banker

A July survey of CIOs by Source Media found that roughly 70% of respondents expected their technology budgets to increase in 2017. Of those respondents, 68% anticipated budget increases of between 1% and 10% with another 32% anticipating even larger increases. And what will they be spending more on? Allowing for multiple responses, 55% said compliance, 53% said security and 47% said mobile device management software.

CFPB to Regulate Prepaid Cards, Mobile Payment Apps

October 5, 2016, Digital Transactions
October 7, 2016, American Banker

Coming in at a bedtime-reading 1,689 pages, the Consumer Financial Protection Bureau’s final rules for prepaid cards are in line with the credit union industry’s expectations. The rules create a level playing field for prepaid card marketers and now provide prepaid cardholders with “with clear fee disclosures, easy access to their accounts, and error-resolution rights.” Prepaid cards that provide overdrafts are now covered by the same federal regulations as those that cover credit cards. There is concern that innovation in the mobile payments industry could be squelched by the CFPB’s expansion of prepaid card rules to all products that store value, which means digital wallet providers, including those provided by PayPal and Venmo, would fall under the regulatory power of the agency.

When the CFPB’s new rules go into effect in 2017, mobile wallet/apps will be subject to the same regulations and regulatory oversight as prepaid debit cards. While it has been noted that prepaid debit and mobile wallets serve different demographics and provide different services, the shared purpose of serving as a cash purse make them both required to “more fully disclose their fees and provide the same liability protection as credit card issuers.” The new rules do not pertain to wallets that simply store payment credentials like Apple Pay and Samsung Pay.

Suit Casts Doubt on Chip Readers

October 5, 2016, Silicon Valley/San Jose Business Journal

The lawsuit filed by a group of small businesses asserting that the card networks colluded to suppress fair trade practices is now moving closer to class action status. The suit alleges that networks imposed an EMV upgrade deadline without ensuring that businesses that bought or leased EMV compliant hardware could be certified to accept EMV payment prior to that deadline. The suit asks the plaintiff networks to refund merchants the $6B they spent on new hardware that still left them open to chargebacks. The presiding judge was, apparently, struck by the suggestion of collusion in a statement by Visa’s CEO that “his company met ‘in a room’ with other card companies and financial institutions to plan the rollout.”

NCUA to CFPB: Butt Out on Payday Loans

October 5, 2016, Credit Union Times

In an inter-agency scuffle over regulatory jurisdiction, the NCUA has told the CFPB that it regulates small dollar lending by federal credit unions and that the imposition of  CFPB payday loan rules are unnecessary and out of line. The NCUA has noted that it developed the “payday loan alternative (PAL) program and has ensured that members are well-protected.” Ergo, the CFPB should focus on other providers in the payday loan space, rather than credit unions.

Elizabeth Rowe

Elizabeth Rowe

Elizabeth tracks the shifting payments landscape for both PSCU and its member owners. Focusing on the interstice of the economy, competition, consumers, technology, payment products and channels and regulatory guidance, Elizabeth gleans the key challenges and opportunities facing our industry, our strategic plans and our success fulfilling our mandate of serving the American consumer.
Elizabeth Rowe




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