All articles by Dan Jones
Dan Jones
An argument for prepaid?
At a time when prepaid cards are struggling for mass market adoption in markets such as the UK, a new study has said that, for low income segments, prepaid may be a cheaper way to bank in the US. The average US consumer can make a saving of over $100 per year by making use of prepaid cards with direct deposits rather than a basic bank checking account, according to a new study from US banking consultancy Bretton Woods. A comparison of checking accounts at four leading US banks Bank of America, Wells Fargo, JPMorgan Chase and Citigroup with popular prepaid cards such as Green Dot VisaMC and AccountNow Visa found that the average bank customer paid between $204 and $353 annually for a basic checking account with usage patterns akin to those seen for branded prepaid cards.
Giving a helping hand to consumers
Dan Jones reports on developments in the fast-growing industry sector.Intuits 14 September announcement that it was to purchase online personal financial services provider Mint.com for approximately $170 million confirmed that the personal financial management (PFM) industry was in a state of transformation, with the fast-growing Mint now set to be combined with Intuits own PFM product, Quicken.
GE renews Wal-Mart card agreement, sees profits suffer
GE Money Retail Consumer Finance, the US financial services subsidiary of General Electric, has announced an extension of its consumer credit card tie-up with Wal-Mart, the worlds largest retailer. Under the terms of the deal, GE and Wal-Mart willl continue to offer a range of consumer and commercial cards via a relationship which initially began in 1999 with the launch of the Wal-Mart store card. The wider consumer card programme offers benefits including a 1 percent cash back on the Wal-Mart co-branded dual card and fuel discounts.
Wells, BofA at odds over cards pricing
In marked contrast to its major rivals, Bank of America (BofA), the countrys biggest card issuer after JPMorgan Chase, has announced it is putting a moratorium on credit card interest rate rises in the period up to the full provisions of the Credit Card Accountability Responsibility and Disclosure Act (CARD Act) taking effect in February 2010.
CGAP seeks m-banking savings boost
World Bank thinktank The Consultative Group to Assist the Poor (CGAP) has called on telecom operators based in emerging markets to team up with the banking sector to offer savings products in addition to existing remittances services. Research undertaken for CGAP concluded that Safaricoms trailblazing M-Pesa service was being used by customers for savings highlighting a need for such a scheme, but as Safaricom is not registered as a financial service provider, providing interest on savings is not currently an option A separate report from CGAP and mobile telecoms trade body the GSM Association (GSMA) noted that more poor people now have mobile phones than bank accounts one billion more rising to 1.7 billion by 2012.
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Getting in a Twitter about social media
Slowly but surely, banks are spending more money on social media programmes and initiatives, though the sums and risks involved are still very small
Three more Nigerian bank chiefs bite the dust
Having completed the second and final phase of its audit of the Nigerian banking sector in an attempt to restore financial stability to the industry, the countrys central bank (CBN) has dismissed the managing directors and executive directors of three banks Bank PHB, Equitorial Trust Bank and Spring Bank which it said were in a grave situation seven weeks after similar sanctions were applied to senior management at five banks (see RBI 618).
Barclays breaks ‘apps’ record
The success of Barclaycards Waterslide contactless payment promotional campaign, already a major hit courtesy of a popular television advertisement in the UK, has been taken a step further by Barclays decision to extend the brand across digital platforms, and in particular the Apple iPhone Barclaycards Waterslide promotional campaign, originally launched in late 2008 as a means of promoting its line of contactless debit and credit cards, has been one of the most successful financial services advertising campaigns in recent memory, with 9 million consumers having engaged with the campaign in the online space alone.
Canadian banks battle fresh insurance curbs
To the universal horror of the Canadian banking sector, the countrys finance minister, Jim Flaherty, has signalled his intention to prevent banks marketing insurance products online, a policy at odds with the countrys bank regulator who ruled the practice legal as recently as June. Legislation dating back to 1991 states banks can only promote insurance outside of a branch, resulting in an increasing number of banks operating insurance offices adjacent to bank branches.
Role reversal
Asian banks are emerging from the crisis in good shape, and that is having a catalysing effect on their UK subsidiaries A customer base eager for an alternative to the status quo is proving to be an attractive proposition for banks with large war chests or organic expansion plans