ATMs TO VIDEO KIOSKS: CONSUMER VIEWPOINT (Aug 2017)

Beyond Cash Dispensing; Innovative Functions

Automated Branches

Positioning for the Future

Key Finding from the Report:

Most ATM users see the ATM as their primary method of obtaining cash.

How can you broaden the utility of your organization’s ATM network.

Research Description and methodology

This study examines consumer usage of ATMs and assesses their reaction to advanced ATM functionality and videoconferencing capability.

National Internet Survey – The survey will include 985 Internet interviews with consumers age 18 or older.

Key Dates

August 2017 – Project Report available.

Strategic Objectives

  • Profile consumer ATM usage including monthly frequency, types of activities, and types of locations used.  Identify the important benefits of using ATMs.  Assess the role of the ATM as a banking channel for various activities.
  • Measure the current usage of and potential for expanded ATM functionality.  Assess whether consumers prefer to have advanced functions on the ATM they use most often or if they should be done at special kiosks.   Identify the preferred locations for advanced ATMs – either at the branch or off-premise locations.
  • Examine the extent to which advanced ATMs or kiosks can serve as a replacement for branch teller activities.  Identify motivations to adopt advanced ATM functionality and barriers to adoption.
  • Assess current and potential usage of videoconferencing services at the ATM.  Measure the potential of videoconferencing ATMs as a sales channel for various financial accounts and services.  Identify consumer concerns that may hinder adoption.
  • Examine consumer reaction to personalized services at ATMs – such as pre-selected withdrawal amounts, automatic balance information, or alerts about upcoming payments.  Measure customer experience with marketing messages at the ATM, including account acquisition.
  • Assess consumer usage of and potential for using mobile phones in conjunction with ATM activities either as a means of cardless access or for pre-ordering ATM withdrawals.
  • Identify consumer segments – defined by demographics, financial behavior, or attitudes – that should be the focus of strategies to expand ATM usage or introduce advanced functions.

Research Issues

  • Since they were first introduced fifty years ago, ATMs have undergone a number of transformations – evolving from serving primarily as cash dispensers to being machines that can take deposits, sell stamps, and cross-sell mortgages. Some ATMs have become video kiosks that offer users the ability to interact with tellers or specialists in remote locations.
  • The latest twist underway is to link ATMs with mobile devices and wallets which may ultimately result in ATMs without card readers, screens or PIN pads. Cardless ATM access is seen as a way to circumvent ATM skimming. The extent of ATM enhancements may vary based on the location and markets served.  For many consumers, the ATM is the bank and it functions as a branch surrogate.  Previous research by Phoenix Synergistics has shown that many ATM users visit the branch solely to use the ATM.  Video kiosks are often located at the branch, and branch staff are available to explain how to use these machines.  ATMs can also be located in a variety of off-premise locations.
  • Recently, a great deal has been written from the industry viewpoint about the ATM being 50 years old. Now ATM providers need to carefully evaluate these ATM developments from the consumer’s perspective.  Do consumers want and need enhanced functionality? What are consumers’ concerns when using ATMs and video kiosks? What locations are appropriate for enhanced ATMs and video kiosks? This survey will address these issues and more.

EVALUATING THE SMALL BUSINESS PAYMENTS MARKET (Dec 2017)

Cards, Checks, and Cash

Payment Innovations

Bill Payment and Invoicing

Key Finding from a Previous Phoenix Synergistics Survey:

Findings from the 2015 Phoenix Synergistics study, The Small Business Payments Market, reveal that traditional payment methods are still the top performers in the small business payments market.

Has usage of innovative payment methods increased over the past two years?

  

This study examines the small business payments market assessing small business attitudes toward and usage of traditional and innovative payment methods.

National Internet Survey – The survey will include 800 online interviews with owners and executives of small businesses with annual sales of $50K to $5M.  Industry categories include manufacturing, wholesale, retail, and services.

Key Dates

September 22, 2017 – Final acceptance of client comments on the questionnaire.

September 22, 2017 – Charter fee date.

November 2017– Initial results available.

December 2017 – Project Report available.

Strategic Objectives

  • Profile the current payment behaviors and preferences of small businesses – including cash, checks, debit cards, credit cards, online payments, and mobile payments. Determine if certain payment methods are used for specific purposes.  Assess the motivations or reasons for using a particular payment method instead of others.
  • Identify immediate opportunities to shift payment patterns among small business customers. Ascertain perceived problems with current payment methods. Evaluate if payroll processing represents an opportunity for providers.  Assess the barriers to adopting direct deposit.
  • Explore how financial institutions can assist small business customers with their bill payment needs. Determine how many bills are paid per month and what methods are used. Determine the barriers that exist to further adoption of both online and mobile bill payment.
  • Measure the potential for further expansion of mobile payment activities among small businesses. Examine current activity – including bill payment, transfers between accounts, loan or credit card payments, e-commerce, and point of sale payments. Assess the viability of mobile B2B payments.
  • Evaluate how providers can help small business customers improve or streamline their methods of payment acceptance from customers. Identify how payments are currently accepted and which methods are most prevalent. Assess the potential for innovative options for accepting payments –  such as electronic invoicing, mobile RDC, and mobile processing of card transactions.
  • Assess the relationship implications related to adoption of certain payment methods – including such aspects as having a credit card from the main checking provider and conducting online bill payment at the FI’s site. Determine if mobile payments are driven by apps downloaded from FIs.
  • Determine how new payment methods and options should be marketed to small businesses.  Evaluate the effectiveness of traditional segments – such as sales volume, industry classification, or number of employees.  Explore how current payment behavior relates to the potential for innovative payment alternatives.

Research Issues

  • There is a great deal of activity in the small business payments market as new payment alternatives appear almost overnight. Digital services such as PayPal and Square are just a couple of the options.  These new services give small businesses an array of payment choices to use in all types of situations. Traditional options such as checks and cash are frequently used and in some cases are the preferred payment alternatives. Payment cards, including credit and debit cards, are also available to meet the payment needs of small businesses. Small businesses can now offer their customers a number of payment options.
  • Online bill payment is common practice among small businesses.  This activity is expected to gradually move to mobile devices.  Remote deposit capture services have been available for a number of years.  Providers can offer payment solutions in the areas of payroll, merchant processing and accounts receivable which are designed to make the day-to-day operations of the small business easier and more seamless.
  • Competition in the small business payments market is intense as Fintech and other non-traditional providers design and market new products and services.  These companies are creative, agile and aggressive competitors. Traditional institutions need to be ready to face this competition with their own innovative payment products.  In this environment, it is essential for providers to understand the payment needs of small businesses. [F258]

FOR CREDIT NEEDS, SMALL BUSINESSES LOOK TO MAIN PROVIDERS FIRST

Wells Fargo and Bank of America top the list when it comes to being the main financial institution for small businesses, according to a recent survey by Phoenix Synergistics entitled, Opportunities in the Small Business Credit Market. Chase, Capital One, and PNC comprise a second tier of top mentions.  Rounding out the top ten named financial institutions are Citibank, SunTrust, U.S. Bank, BB&T, and TD Bank. These main providers enjoy important competitive advantages as small business lenders. Small businesses typically consider their checking account provider to be the main provider.

William H. McCracken, CEO of Phoenix Synergistics stated, “Small business lending has many more challenges today than before the recession.  The environment is extremely competitive with a host of new online lenders having appeared in recent years.  Our survey indicates that the main financial institution (FI) of a small business holds a strong position as a small business lender, being most widely used and preferred for credit services by small businesses.  The main small business FI should leverage its strong position and promote credit services to its small business customer base.  Wells Fargo and Bank of America – being the top institutions identified as the main financial institution among small businesses – are in a particularly advantageous position to capture the credit business of their small business customer base.”

These are among the findings from Phoenix Synergistics study, Opportunities in the Small Business Credit Market, featuring 800 internet interviews with owners and executives of small businesses with annual sales of $50K to $5M.  Industry categories included retail, wholesale, manufacturing, and services.  This study examines small business usage of various credit products and lenders, as well as their decision-making process and future demand. In addition, the channel usage and preferences of small businesses as related to credit are measured.

MOBILE FINANCIAL APPS: CONSUMER REACTION (Aug 2017)

Banking, Budgeting, and Payments

Provider Competition

Advantages and Disadvantages

Key Finding from the Report:

Findings from the survey reveal that four in ten mobile phone owners have downloaded some type of financial app. This tends to be much more widespread among Millennials.

 

Research Description and methodology

This study examines consumer experience with mobile apps for financial products and services.  Consumer preferences and perceived benefits are also assessed.

National Internet Survey – The survey will include 985 Internet interviews with consumers age 18 or older.

Key Dates

August 2017 – Project Report available.

Strategic Objectives

  • Profile the current environment for mobile financial apps in terms of frequency of mobile banking and financial activities, the extent have downloaded apps, number downloaded, and from what types of financial institutions and organizations.
  • Assess in detail the types of mobile apps consumers have downloaded – including general banking/budgeting, saving/investing, purchases/payments, rewards, and other financial activity. Determine if apps used or not. Measure which would like to have.  Capture if downloaded from main or primary provider.
  • Examine the types of activities performed with direct connect mobile banking apps. Determine role as a banking method – primary, secondary, or emergency.
  • Assess the impact of mobile financial apps on other banking channels – encompassing aspects such as overall frequency of usage of apps, whether using other channels more, less, or the same, with using PC-based online banking more, less, or the same, and expectation than mobile apps will replace PC-based online banking.
  • Evaluate the value of innovative options for mobile apps – such as voice commands, facial recognition, digital lockbox, fingerprint verification, and click to call connection.
  • Identify advantages and disadvantages of mobile apps that should be promoted to expand adoption or increase usage? Identify reasons for nonusage that may be barriers to adoption to address.
  • Segment and target the market – in terms of behavioral, attitudinal, or demographic variables – to implement strategies and tactics to expand and increase usage of mobile financial apps.

Research Issues

  • Is there an app for that?  As usage of smartphones for mobile banking expands, usage of financial apps increases.  Consumers are responding positively to the ability to perform banking transactions and other financial activities via a mobile app. It is often described as having the branch at your fingertips.
  • Mobile financial apps can be used for anything and everything financial. Consumers can perform transactions, make bill payments, and locate branches and ATMs using an app.  There are also apps to help consumers with more difficult financial tasks such as saving, investing, and financial management. Today’s mobile apps can make the tedious and time consuming tasks such as budgeting and expense tracking easier and in some cases fun with colorful graphics and cartoon characters.  Apps provide convenience and ease for consumers and help strengthen relationships with customers by providing an element of “stickiness.”
  • Competition is extensive as both financial institutions and other organizations compete for screen space. The world of financial apps is dynamic, challenging providers to keep up with the rapid pace of developments, technology, and the sheer number and scope of mobile financial apps. This study will address these challenges as well as others examining mobile financial apps from the consumer’s perspective.