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In this complimentary white paper, CashEdge, the leader in Intelligent Money Movement™ services for financial institutions, offers an in-depth look at the P2P payments opportunity for banks, giving special focus to the security and risk management concerns of banks.
With more than 70% of consumers regularly transacting online, a changing customer base (Gen Y are digital natives representing 64 million consumers), and more consumers using cell phones for financial transactions, this is the right time for banks to adopt an email and mobile P2P payments solution before non-bank entrants to the market effectively monopolize the market.
Key points:
- Current market opportunity for banks
- Current options for P2P payment services for banks
- Value proposition to consumers
- Security and risk management strategies for P2P payment services
Challenge: A CashEdge client and leading regional bank sought a value-added application that would enable it to meet consumer demand for increased online banking capabilities.
Solution: The Bank expanded its online banking capabilities by launching CashEdge's TransferNow® for Consumers Product Suite, including both Me-to-Me and Third Party Transfers. The Bank became one of the first to offer Third Party Transfers, establishing itself as an innovator in online banking.
Outcome: Since launching the service, ABC Bank has seen significant usage and adoption of the service across all customer segments including Retirees, Baby Boomers and Gen Y consumers. Additionally, as a result of the adoption of the transfer service, ABC Bank has seen improved metrics across several other engagement indicators, including number of users, frequency of login and frequency of transactions—translating directly to improved customer satisfaction and an improved ROI from the online channel.
Commissioned by CashEdge in June 2009, the survey polled more than 850 consumers nationwide aged 18 years and older who use online banking capabilities. These respondents described themselves as bank customers (76 percent), credit union members (22 percent) and customers of "direct/virtual banks" (2 percent). The margin of error for the survey is three percent. The survey was conducted by the independent research firm Zoomerang.
Challenge: The University of Wisconsin Credit Union (UW Credit Union) realized it needed to update its offerings to provide students with a simple and secure online funds transfer solution that would enable parents to send money to a student's UW Credit Union account.
Solution: UW Credit Union leveraged CashEdge's online funds transfer solution, TransferNow®, to create Money Link, a free service that allows anyone to transfer money electronically to a UW Credit Union member – from any financial institution in the U.S.
With Money Link students enable parents – via an email invitation – to transfer money to their UW account. Parents verify their account information and then are free to make regular transfers to students.
Outcome: UW Credit Union launched Money Link in September 2006 with just a handful of users. Today, the number of Money Link users and their monthly online transactions continue to grow.
The online channel is increasingly becoming the most important tool available to financial institutions for the acquisition of new, profitable customers. According to TowerGroup, top-tier banks report that online banking customers hold up to 50 percent more accounts and generate 20-40 percent more profit than their offline counterparts. Consumer adoption of online account opening and funding has soared over the past few years and analysts expect this trend to continue, predicting that 13 percent of all U.S. checking accounts will be opened online by 2010 (Aite Group). For financial institutions, the opportunity is clear.
In 2006, First National Bank of Omaha (FNBO), a key subsidiary of FNNI, saw an untapped opportunity beyond its regional footprint in the Midwest to compete with national competitors, reach a new segment of customers, build a more profitable business, and establish a source of core deposits. This opportunity was FNBO Direct - an internet bank that would further FNBO’s history of innovation with a best in class online customer experience.
FNBO needed to find an online financial applications partner who could make this happen on schedule as effectively, efficiently and securely as possible – and they turned to CashEdge.
From the ability to provide improved financial advice and the potential to capture held-away assets to increasing back-office efficiencies, aggregation offers huge opportunities for advisors. But those opportunities hinge on an advisor’s, and investor’s, confidence in the privacy and security of the technology. CashEdge sets the industry standard for security and privacy and takes every measure possible to protect and secure personal and sensitive data.
A consumer signed up for an account at Bank A, their current financial institution and initiated an inbound transaction using CashEdge's FundNow application. However, the $95,000 in funds being pulled from Bank B was not theirs — the funds were being stolen.