9 Takeaways From FinovateSpring 2014

Nearly 1,300 attendees and 67 presenting companies descended upon San Jose, CA, to discuss, learn, and unveil the latest trends in financial technology. Notable this year is a movement away from solutions that require significant, and costly, hardware upgrades.

The Finovate Group, creators of the NetBanker.com blog, hosted its annual spring conference on April 29 and 30 in San Jose, CA. FinovateSpring is a spin-off of the group’s popular FinovateFall conference that takes place every year in New York City. This year, the conference is set for Sept. 23 and 24. The conferences give established vendors and new startups seven minutes to present live demos of their bleeding-edge technology innovations. The audience at this spring’s conference included about two dozen U.S. and Canadian credit unions as well as many more domestic and international banks, vendors, and even members of the CFPB.

Two themes dominated FinovateSpring last year: personal financial management tools and near field communication mobile wallets, both of which require significant hardware upgrades for financial institutions, retailers, or consumers to adopt. This year was different; the prevalent topics this time around included:

1.Streamlined experiences, gamification, and strategies to incentivize first-time or small-dollar investors.

Motif Investingreplaces individual stock purchases with blocks of stock buyers can customize based on their interests, values, etc. TD Ameritrade and LikeFolio demonstrated solutions that first focus on the brands and products consumers know, then work backward to connect investors with the companies and investment opportunities behind those brands. Solutions even aggregate Twitter posts about stocks people have bought or followed as an analytical resource to forecast market shifts. A company called Stockpile allows consumers to send S&P 500 stock gift cards. The company requires only an email address to purchase a gift card, i.e., no personal info such as date of birth or social security number, however there is a sign-up process for the recipient to redeem the card. Finally, LOYAL3 allows crowdsourcing of stock IPOs for brand fans, employees, or other smaller, nontraditional investors.

2.Mobile as a primary device for loan shopping, loan applications, and loan approval or closing.

CUNeXususes financial institution data to create always on preapproved loan offers that are based on specific credit scores with rates that change as the consumer modifies their loan terms. Consumer behavior such as entering an auto dealership can trigger offers, which consumers can accept via mobile phone at any time. Because the borrower is prequalified, they don’t have to go through the hassle of filling out an application on a mobile screen; they simply agree to loan terms and conditions with a single click or electronic signature.

3.Mobile as a remote to turn physical cards on and off or set custom purchase thresholds.

True Linkand Red Giant demonstrated mobile solutions that limited card purchases to within specified Google map boundaries, within a certain radius from the phone, or by merchant type. This added security is particularly useful for young cardholders or elderly adults who might be susceptible to scammers, phony charities, etc.

4.Mobile wallets for the underserved.

A company called Wipit partnered with Boost Mobile to createa mobile wallet for the underserved/unbanked. The wallet allows users to deposit checks remotely, pay bills, transfer money to other countries, and more. This allows users to essentially replace many high-cost services from non-FI retailers.

5.Siri-esque virtual assistants.

A company called Interactionsdemonstrated a product that was like an interactive voice response solution on steroids.Itallowed customers to use natural language responses for complex activities such as sending statements to email addresses not on file, transferring funds, switching between languages, finding nearby ATM or branch locations, and having the addresses of those nearby locations texted to a phone.

6.Resources to ensure fair lending compliance on the consumer loan side.

Visible Equityscans through an FI’s data and uses variables such as first and last name, address, and zip code to try and predict demographic factors; organize borrowers into groups based on likely gender, ethnicity, age, etc.; and identify potential disparities, such as group that is too far away from the average expected interest rate.

7.Easier to adopt mobile wallets that do not involve a substantial hardware upgrade.

Loopoffers magnetic circles that existing POS terminals can read and users can embed in phone cases, watches, or other devices for less than $1. Quiskrequires users to enter a mobile number and pin directly into an existing POS system and then confirm it on their phone for cashless, card-less purchases or withdrawals. Pixelirisuses encrypted sonic noises emitted from one device such as a computer, smartphone, or dumb phone to initiate and validate POS, P2P, and other mobile payment activities.

8.Gift card management.

Kofaxallows users to snap a picture of any gift card barcode to view remaining balances and upload balances to a mobile wallet.

9.Next generation ATMs.

A Ukrainian company called Privat Bank demonstrated an ATM that had no screen, card reader, buttons, or anything not related to contactless connectivity and cash dispersal. Consumers trigger withdrawals via the screen on their mobile device or contactless equipped wearables such as Google Glass or smartwatches. These units are less expensive to make, last longer, and are cleaner. On a similar note, Fiservalso demoed how consumers can use wearables to make purchases in the POS environment such as via QR code as well as provide another channel for pushing notifications, checking balances, and more.

May 14, 2014

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