Corporate Insight has been tracking the growth of mobile finance since the very first mobile trading sites launched over a decade ago. Since 2012, our Mobile Monitor subscription research service has closely tracked a cross-industry group of leaders and other noteworthy firms within the financial services. However, even as mobile adoption has steadily grown, the concepts of mobile payments or mobile wallets have struggled to gain traction among firms and consumers. Apple has long been thought to be a potential game-changer, though.
This article originally appeared in the Fall 2014 Issue of Consulting Insights.
Wearable tech is generating a lot of buzz on the heels of Apple’s recent Watch announcement, but the truth is, the wearables movement isn’t exactly breaking news. The Pebble smartwatchhas been on the market for years, and Google’s Android Wear has been up and running since mid-2014. The financial services industry has yet to embrace the smartwatch concept, however. While firms like Wells Fargo and Discover have unveiled beta versions of Google Glassware, few major financial institutions have publicly expressed interest in developing products for the budding smartwatch market. To date, Fidelity’s “Watchapp” for Pebble represents the sole smart-watch app released by a major U.S. retail bank or brokerage firm. This may be about to change.
An underemphasized feature of Apple’s contactless payments service, Apple Pay, is its remarkable Secure Element hardware. The much more discussed security feature, Touch ID, utilizes biometric technology that registers and responds to a single iPhone user’s fingerprint in order to authorize a transaction. Even more importantly, however, Apple Pay also communicates with a Secure Element chip installed in iPhone 6 devices that acts to safeguard a user’s financial information against fraud and data breaches.
When loading cards into Apple Pay, the Secure Element assigns each a digital token (Device Account Number) and stores only those tokens in the chip. The tokens are used as static proxy account numbers representing the user’s cards. When making payments, the Secure Element then generates a one-time unique dynamic security code for each transaction carried through the payment network. The security code acts as a proxy card code verification (CCV) and verifies that the digital token originated from the correct mobile device, authenticating the transaction.
Topics: Mobile Finance
As previously discussed in the Around the Brokerage Industry: Motif Investing blog post from September 10, 2014, Motif Investing is a unique online brokerage firm that offers inexpensive bundles of individual stocks developed based on a unifying theme or “motif” for an initial investment of as little as $250. In mid-October, the firm used its distinctive business model to create a very relevant, and even more importantly, necessary new motif: “Fighting Ebola.”
The Fall 2014 Issue of Consulting Insights is now available! Our cover story takes a look at the prospects for wearable tech development in the financial services industry in light of the recent Apple Watch announcement. We also explore how leading brokerages support active traders with idea generation tools, and share competitive and usability insights on mobile menu design from a recent Mobile Monitor Report. Our fourth article reviews recent industry activity in response to “robo-advisor” services from startup challengers.
Inside the Summer 2014 Issue:
Corporate Insight would like to invite you to join our analyst Anneli Lefranc for a free webinar – What Drives Investor Satisfaction?
We recently surveyed over 1,500 investors to examine the relationship they have with their primary brokerage firm. We then analyzed the results, identifying the features that matter most to different types of investors and that have the greatest impact on their overall satisfaction. Our major findings were published in Corporate Insight’s 2014 Investor Survey Report.
Apple Pay, the latest large-scale attempt to move consumers toward the mobile wallet lifestyle, officially launched on October 20, 2014. The new service on the iPhone 6 enables seamless payments without ever showing or swiping a card. Customers can enjoy their transactions in what Apple calls “a simple, secure, and private way.”
The iPhone 6 function allows users to speed through checkout – in person and via apps – using Touch ID to verify their identity. The technology behind this process is called Near Field Communication (NFC), which, through the use of an antenna, sends information between devices, e.g., from a smartphone to a point-of-sale terminal.
Topics: Mobile Finance
- Site Revamps Keep on Coming – In another busy month for site revamps, New York Life revamped its public and advisor sites, while Edward Jones revamped its private site and American Funds launched a new and improved investor site. Furthermore, our Annuity Monitor, e-Monitor and Mutual Fund Monitor groups all covered Fidelity’s partial private site revamp, which featured a redesigned Accounts & Trade section complete with a new secondary navigation menu, a left-side account selection tool and redesigned pages.
- Apple Pay Introduced to Customers – Five firms covered by Credit Card Monitor – American Express, Bank of America, Capital One, Citi and Wells Fargo – each introduced the much-anticipated Apple Pay service to clients via mediums such as public site information pages, step-by-step tutorials and press releases, among others.
- Christmas Comes Early this Year – Five firms across various monitor groups introduced enticing promotions this month. Transamerica advertised a $500 cash giveaway for annuity clients who register for or are already enrolled in eDelivery. As reported by Bank Monitor, Citibank launched a new Citigold Account Package promotion, which offered a $400 cash bonus to applicants who opened an account by October 31, 2014, while Citizens Bank is offering a special online-only 1.20% APY on 15 month CDs with a minimum opening balance that expires on November 30, 2014. Already touched by the upcoming holiday spirit, Wells Fargo announced its offering of free credit scores and reports to all existing Wells Fargo customers who visit a branch before November 16, 2014 to receive their personal access code. Finally, TD Ameritrade advertised a new advisory fee rebate on its Amerivest managed portfolios that offers clients who place $25,000 or more into a managed portfolio a refund on any advisory fees if the portfolio experiences two consecutive quarters of negative performance (before advisory fees). The offer expires on September 30, 2015.
Topics: Trends and Highlights
This month, our Advisor Monitor team will publish a new report – Advising the 1% – that examines various client segmentation and referral cultivation resources that help advisors seek out and service high net worth investors. For the most part, high net worth issues are mentioned as just one part of a firm’s approach to a larger issue, such as client segmentation or referral cultivation. Firms offered a diverse mix of materials to support these topics, such as worksheets, prospecting letter templates, commentaries, and focused consulting programs.
Topics: Financial Advisors
CI’s Around the Brokerage Industry series reviews public websites and digital resources offered by leading brokerages and investment firms that fall outside of our E-Monitor and Broker Monitor coverage groups.
LOYAL3 is an untraditional San Francisco-based brokerage firm with a unique business model that offers fee-free investing to the average investor. By partnering with public companies and selling their stocks, LOYAL3 receives compensation from its partners as opposed to investors. Individual stocks can be purchased for as little as $10, and IPO stocks can be bought for as little as $100. The firm’s main “claim to fame” is its ability to offer IPOs to small investors at the same time as the traditional high net-worth and institutional investors.