The use of prepaid cards is expanding throughout the US and the rest of the world. According to one survey, prepaid transactions for 2012 are projected to be upwards of $300 billion — up 61% from 2008. This growth is partially due to the rise of unbanked and underbanked consumers, people who want to limit their debt, and younger segments that lack other options. Prepaid cards are a viable option that can help these consumers build their long-term credit-worthiness. And according to our sister program – Iconoculture – extending a payment vehicle, even just a prepaid card, can help build customer loyalty and a feeling a partnership.

To capitalize on these opportunities, leading banks are rolling out innovative prepaid products and services:

Checking Account Alternatives: Consumers are attracted to prepaid cards because of the low-cost basic banking services and fewer rules than those that surround checking account-linked debit cards. In many instances, prepaid cards carry a one-time registration charge (or in some cases a minimal monthly fee), but will offer other services like cash-reloading, check-cashing, network ATM withdraws or point-of-services purchases for no additional fee. For banks, there is the opportunity to grow revenues and also address cost structures. JP Morgan Chase has recently rolled out its Liquid Prepaid Card which carries a $4.95 monthly fee. The balance of the card is FDIC-insured and customers can also set up text-message alerts to notify them when funds are low. American Express also introduced their version of the next generation prepaid card. Serve is a prepaid account and apps that allow customers to send and receive money from their computer, mobile device, or included prepaid card.

Student and Youth Segment Focus: Prepaid is growing in this segment because of younger consumers’ relatively poor credit scores and regulations that limit extending credit to young people. Some banks have found that prepaid cards offer a “gateway” for young people into other bank services and simultaneously develop brand loyalty, while helping them budget and spend wisely. American Express is betting on this trend through their “Campus Edition” prepaid card. The company recently announced that it is partnering with Barnes & Noble to market the card in more than 500 B&N college book stores across the country.

Multi-currency and Travel Solutions: Visa introduced its Loaded for Travel card last year in reaction to a growing customer base that desired increased payment security and convenience while traveling abroad. The multi-currency payment solution allows cardholders to store up to five major foreign currencies on one card. The initial cost of the card and its top-up fees can add up, but users can easily earn this money back through loading foreign currencies at strategically low exchange rates. With the value locked in on the card, travelers are no longer subject to fluctuating exchange markets while abroad.

To learn more about these and other prepaid card innovations, visit our Market Intelligence and Innovation Showcase.

In one week we will welcome over 500 individuals representing more than 200 financial services institutions to the 2012 CEB TowerGroup Financial Services Conference in Boston.  This three-day event will give business and technology executives the latest industry insight needed to maintain a competitive advantage. 45 unique sessions including panel discussions and keynotes will cover today’s most pressing topics in the financial services industry, including Social Media, Mobile Payments, Business Analytics, Evolving Regulatory Reform and more. 

Attendees will leave the conference equipped with the tools to act with confidence and be decisive in this era of ambiguity. This is your chance to learn from distinguished industry leaders, network with hundreds of Financial Service’s Executives and sharpen your business and technology strategy moving forward.

Don’t Wait, This is Your Last Chance to Register

To learn more visit www.cebtowergroup2012.com

Recent CFC data shows that teller transactions are expected to decline consistently through 2015 and digital sales are positioned to make up a much bigger share of account openings and sales for banks. These shifts in customer behaviors – combined with challenging retail banking economics – are causing members to rethink the role of the branch.

To help our members, CFC has launched the Branch Capability Roadmap to help firms pinpoint emerging branch needs, identify capability gaps, and gather objective metrics about peers. The roadmap will take a deep dive into five main categories:

• Change Capacity
• Talent
• Technology
• Multichannel
• Space and Design

For each category we will offer an executive peer assessment and benchmarking metrics. The roadmap, in the form of a survey for member institutions will be available this summer.

To learn more about how this initiative can help your organization, please email Alex Pavel at apavel@executiveboard.com

We are only weeks away from one of the premier events in the financial services industry, the 2012 CEB TowerGroup Conference. After a sold-out event in London, anticipation is growing for the upcoming Boston event.  If you still have haven’t registered, here are the top five reasons you and your organization can’t afford to miss this opportunity!

1. Gain the Confidence to be Decisive in an Era of Ambiguity

• In these periods of economic unrest, executives and their teams need the resolve to take immediate action – the conference can provide you the tools to get there.

2. Preview Exclusive CEB TowerGroup Research

• In over 45 unique content sessions we will provide critical insights on today’s most pressing trends including mobile payments, social media, regulatory reform, business analytics, and risk management.

3. Learn from Distinguished Industry Leaders

• Hear from leaders at Citi, PNC, and State Street as they provide expertise on leadership, innovation and key trends transforming the industry.

4. Network with Hundreds of Financial Services Executives

• Connect with peers during cocktail receptions, the after-party, and unstructured time between sessions.  You can also leverage our new mobile site to network virtually before, during and after the event.

5. Understand the Expanded Role of Technology

• Our partnership with technology providers will offer a unique and valuable backdrop in examining the major part that technology plays in the evolution of the market.

Don’t Wait, Register Today!

http://www.cebtowergroup2012.com/ ** Follow us on Twitter:  #CEBTG12

As transactions continue to migrate out of the branch, banks are faced with reimagining branch spaces to fulfill different customer wants and needs. Banks around the world are experimenting with innovative branch designs and offerings to drive foot traffic and demonstrate to customers how the use of new technology and personalized service can enhance their overall banking experience.

As we think about new ideas in the branch design space, several trends are emerging:

• Segment-specific focus – Standard Chartered in Singapore employs a segmented branch experience in its flagship space – one for retail and one for high net worth clients. The bank developed two parallel, but vastly different storefronts and reception areas, connected only by their back offices. Customers use separate entryways into either a retail, efficiency-focused area or a more chic, upscale area that emphasizes personalized services.
• Retail partnerships – Convenience is top of mind here as banks like Citizens and Kiwi team with retailers to offer customers a chance to complete several activities in one visit. In Boston, Citizens partners with Dunkin’ Donuts. This partnership allows for extended full-service hours on both ends – customers can bank earlier in the morning or get coffee later in the day. Kiwibank created a partnership with the New Zealand postal service in an effort to lower costs, increase footprint and service hours, and better serve its customers.
• Virtual communication – firms like Coastal Federal Credit Union in the US and Ziratt Bank in Turkey are using video tellers to communicate with customers outside of the branch, and outside of normal branch hours.

To learn more about these innovations and others, visit our Market Intelligence and Innovation Showcase.

Many banks have been able to get customers online and even teach them about their products, but acquisition of new customers remains a challenge. Conventional wisdom points to the fact that customers need the credibility of an in-person experience to start a new banking relationship, and for many banks, acquisition strategies often rely on monetary compensation and rewards to drive switching. Simply put: There are better ways to drive customer acquisition.

The problem is that banks are confusing an in-person experience with a personal experience, which now non-branch channels are better able to deliver against. Customers are easier to reach online than in a branch, and relying on in-person, reactive switch fails to leverage the emotional drivers most effective at driving acquisition.

One step banks can take to improve their online acquisition strategy is to connect technical capabilities to service capabilities that the bank already has, in order to drive emotional engagement. For example, one leading bank in Europe links potential customers to advocates through social media. These advocates provide credible recommendations for prospective customers in the key moments of the acquisition process. Another large bank in Australia provides a real person to support online switching. This eliminates customer effort and provides the customer with a credible “named switch owner” throughout the switch process.

Read the full best-practice case studies, “Frictionless Online Acquisition Experience,” and “Branchless Customer Communication Strategy” then access the full report, “Unleashing the Digital Bank.”

Also be sure to register for our upcoming webinar when we will share these case studies and more.

Our quarterly Consumer Financial Monitor data measures financial sentiments, engagement, product satisfaction, and confidence in financial institutions among a global sample of 20,000 consumers. In additional to our global reports, we also focus analysis on particular segments and regions. Our Q1 2012 Mass Market report is now available on our homepage for members to view. The report highlights several interesting trends for banks, particularly around consumer debt:

• While mass market consumers globally express warmer feelings about personal finances (income, savings, and progress towards achieving financial goals), they show deterioration in feelings about debt levels.
• Mass market consumers seemed to be shrinking the size of their balance sheets – they did not place more income into savings nor did they take up more debt.
• This quarter the global mass market was slightly less likely to become more indebted or rely on savings to pay bills.

As the data shows, the global mass market have better feelings about finances but still lack an appetite for debt. The question facing retail banks now: Where will demand come from in Q2?

Read more from this report and access other quarterly Consumer Financial Monitor reports here.

Learn about what other banks are doing in the product innovation space and browse examples of new interesting and retail banking products and services in our Market Intelligence and Innovation Showcase.

With spring right around the corner, we’re starting to ramp up our planning activity for the CEB TowerGroup Financial Services Conference. Last month saw the inaugural European conference, and if the takeaways from that event are any indication, you won’t want to miss the Boston event, May 23-25. 

This year’s event covers pressing topics in the financial services industry, such as Social Media, Evolving Regulatory Reform, Mobile Payments, and more. Our combined focus on business challenges and the technology trends that influence them will better prepare you to adapt to changes in the market, understand the role of technology in that evolution, and be equipped to make decisions now. This year’s conference will feature over 45 unique content sessions led by industry experts and our analysts, designed to empower attendees to make critical decisions.

Join us this year to learn from influential industry keynote speakers; Osama Bedier, Vice President, Google Wallet and Payments, Google and Madge Meyer, EVP, Chief Innovation Officer and Technology Fellow, State Street. Connect with peers during cocktail receptions, our industry awards event, and the conference afterparty, as well as unstructured time in between sessions. Don’t wait, register today!

To learn more visit http://www.cebtowergroup2012.com/

The branch has begun its predicted slide from prominence as the center of the bank/customer relationship. The number of branches, the number of tellers, and the number of teller transactions will continue to decrease through 2015. This is not necessarily bad news as banks have attempted to migrate simple transactions to alternate channels for decades, beginning with the ATM in the 1980s. It does, however, present a challenge to banks to determine the best use of branches going forward. The rise in sales and service transactions will offset the teller transaction decline slightly and will comprise a larger percentage of total branch transactions. This shift requires staffing with a different skill set, emphasizing traditional platform-based customer service and selling skills over teller proficiencies such as balancing and fast processing.

In contrast to the branch, ATM transactions will continue to rise, although only a little. This increase is primarily due to added deposits because of the deployment of image ATMs. Interestingly, this trend is also driving the decline in branch transactions with the net result that ATM transactions will almost achieve parity with the number of branch transactions by 2014.

Understanding consumer usage of the financial institution’s delivery channels is a critical element in future investment decisions. TowerGroup and Corporate Executive Board have refined the methodology for calculating and forecasting transaction volumes using an approach that incorporates both financial institution data as well as consumer preferences for bank interactions.

This research brief highlights the projected volumes for the branch and ATM channels in the United States and is the first in a series of channel volume research notes that will be published throughout 2012.

Access the research brief here.

Our quarterly Consumer Financial Monitor data measures financial sentiments, engagement, product satisfaction, and confidence in financial institutions among a global sample of 20,000 consumers. Our Q1 2012 report is now available on our homepage for members to view. While 2011 was marked by low consumer confidence driven down by continued economic uncertainty and poor bank communication strategies, our new Q1 data shows that there are some positive early signs for 2012:

• Consumer confidence has improved. While global consumer confidence still remains low, it has increased over the last quarter, especially in North America where confidence improved 4% this quarter.
• Confidence is linked to product satisfaction. The segments that are most confident in financial providers – younger and wealthier consumers, also prove to be the most satisfied with financial products.
• Consumers expressed warmer feelings about personal finances. Asia and Latin America markets led the way – posting the most positive gains, with a net percentage of 7.

Read more about global trends across Q1 by accessing our latest report here.