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PAYM EN T S Y S T E M S

Am ount Load e d on Prepa i d Cards


$120 100 $ billions 80 60 40 20 $0 $1.8 3.8 18.3 8.7 2010 2011* 2012* 16.6 67.7 $118.5

2006 2007 2008 2009 *Forecasts Source: The Network Branded Prepaid Card Association

Prepaid card use is problematic, however, for consumer advocacy groups, reports Bloomberg. Although the cards have proven helpful for 60 million citizens who lack transaction accounts and rely on other providers such as check cashing services, fees can accumulate for low-income users. Credit union providers recognize that prepaid cards can be structured for great value to members otherwise subject to fees from payday lenders. Beyond that, the cards offer the prospect of new members opening savings accounts and eventually taking advantage of additional services. The prepaid industry has recently released 10 joint principles for prepaid card fees, and the trend seems to be that fees are dropping and becoming more simplified in their structure.

T ECH N O LO G Y

Face-Off: Apps vs. Mobile Browsers


Whats the best way to serve members in a mobile world?
the entire Internet is now the purview of handheld devices. But unlike the desktop, mobile users have two major avenues to access online content: apps and Web browsers. Its not as simple as in the early days of the desktop Web, when the only choice was how fancy to make a website. Nor is todays environment comparable to the early iPhone days, when apps were a badge of the forward-thinking techno-savvy. Today, apps arent quite the status symbol they used to be, but theyve also grown beyond their novelty to become useful tools for end users. At the same time, the mobile Web has become at least as important, or more so, in the world of mobile banking. So the question of the moment isapp, website, or both? Consider the following: Apps have the coolness factor but require multiple builds and maintenance for each platform. Websites may offer the potential to build once for all platforms, but an overabundance of devices and software still creates challenges. A hybrid approach combining apps and websites is the gold standard, but this strategy is expensive and labor-intensive.

heck account balance, find a branch, or transfer funds. Compare rates. Make a payment or cash a check. For just about any financial need, theres a mobile banking app or a website to hold in the palm of your hand. Mobile banking, particularly via smartphone, is quickly moving to the center of the online ecosystem. Thirty-five percent of Americans own smartphones, and most mobile subscribers will be carrying a smartphone by the end of 2011. Smartphone sales are projected to more than triple by 2012, to well over 500 million owner-users worldwide. Customers have long been able to access their accounts, even from less-powerful feature phones, notes Tim Murphy, manager of mobile monitoring and testing at Keynote Systems, writing in Bank Technology News. But the iPhone and the Apple App Store unleashed an explosion of mobile computing power and connectivity, opening the door to impressive functionality and convenience. The rise of smartphones and appsnow no longer the exclusive domain of Applealso introduced the age of mobile Web browsing. With every smartphone platform now supporting a Web browser, and touch screens maximizing the viewable area, virtually

Consumer preferences
How do you arrive at a viable mobile strategy? While some demographic trends are fairly clear, consumer preference isnt overwhelmingly in one camp or

ESCAN NEWSLETTER AUGUST 2011

TECHNOLOGY

the other. Usage drives many preferences, says Murphy. Consumers reported roughly equal satisfaction with app and browser experiences, and users were found to spend about an equal amount of time with each, according to a 2010 study by Keynote Systems for Adobe. Within financial services, however, most users preferred browsers for many common activities, including reviewing accounts and conducting transactions such as bill pay and money transfer. Murphys advice: For broadest reach, biggest bang for the buck, most efficient rollout and maintenance, and searchable discovery, start with a mobile website. Then, if and when budget and resources allow, add individual apps for the major platforms serving your audience for enhanced user and brand experience.

S mar tp h o n e Pe n e trati o n *
2008 87% 2009 81 2010 69 2011 51% Feature phones *Third-quarter results and projections Sources: Nielsen Co. and Filene Research Institute 49% Smartphones 31 19 13%

HUMA N RES O URCES

Workers Getting Real About Retirement


Confidence and savings reach record lows

mericans are recognizing the realities they face concerning a comfortable retirement, according to the 2011 Retirement Confidence Survey (RCS) conducted by the Employee Benefit Research Institute (EBRI) and Greenwald & Associates. Employees are more pessimistic concerning retirement than at any time in the past two decades. About 27% of employees now say theyre not at all confident about retirement, up five percentage points from the level measured just one year ago. Reinforcing that trend, the percentage of employees saying theyre very confident of a comfortable retirement ties with 2009 at 13%the lowest rate ever measured by the RCS. Roughly one-third of employees and retirees had to dip into savings last year to pay for basic expenses. Those with retirement savings accounts401(k) accounts or individual retirement accountswere far less likely than those without such accounts to tap into savings. People are recognizing the level of savings realistically needed for a comfortable retirement, says Jack VanDerhei, EBRI research director and co-author of the report. We know from previous surveys that far too many people had false confidence.

Conditions forcing Americans to redefine retirement include: High unemployment rates; Federal, state, and local government fiscal crises; Rising health-care costs; Lower investment returns; A surge in the older population, putting stress on programs such as Social Security and Medicare; and Longer life expectancies. Many people are planning to work longer and retire later because they know they simply cant afford to leave the workplaceboth for the paycheck and for the benefits, says survey co-author Mathew Greenwald, of Greenwald & Associates. The RCS continues to find that many people do not plan or save for retirement: While 59% of all employees say theyre currently saving for retirement, 56% say they have less than $25,000 in savings and investments, excluding the value of their primary residence and any definedbenefit pension plans. Almost half (45%) are not very or not at all confident they and their spouse will be able to save as much as they think they need, and 70 % say theyre a little or a lot behind schedule in planning and saving for retirement.

AUGUST 2011 ESCAN NEWSLETTER

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