Gambling on Retail Banking – Gonzo Does Las Vegas, Baby! - Gonzobanker

“Got myself a one-way ticket,
Going the wrong way…
One of these days
I’m gonna change my evil ways.
One of these days…”
–“Ride On,” AC/DC

Deep Cover – Somewhere in the Desert, Southeastern Nevada:

It was bound to happen sometime. We all hoped it would be later, not sooner, but you buy the ticket and take the ride. As GonzoBanker’s tour of the 2010 BAI Retail Delivery show had barely kicked into third gear in beautiful Las-freakin’-Vegas, my compatriots – Quintin Sykes and Eric Weikart – and I were boldly stomping through the Vendor Expo, handing out free, special edition, Vegas GonzoBanker t-shirts to our fans, supporters and various opportunists when the dam broke loose and along with it all hell.  

Your three Gonzo Guerilla Marketers were identified, stalked and then unceremoniously removed from the Expo by three overly officious BAI heavies. “Manhandled” might be stretching it, but their message was delivered. Kicked to the curb and threatened with further violence. The charge? Illegally dispensing marketing materials in the Expo without the coveted Red Vendor Badge, in violation of 12 BAI 203.2a(iii). Branded. Outlaws. Mavericks.

So I hide in the dark corner of a dingy Nevada motel, far out in the Tule desert where the buses don’t run, hoping – praying even – that BAI’s hired goons can’t find me and do what I know they must do. No stomach for sleep, I wait and shake and sweat.

My sole communication with Eric and Q has been via panicked satellite communiqué. My partners are hidden and safe but laden with The Fear that only ruthless pursuit by BAI Henchmen can spawn. What follows is our take on this year’s BAI Retail Delivery, hastily patched together in deep cover.

Overall, in keeping with years past, the show was populated by lots of consultants, researchers and vendors — with relatively few bankers. But the energy was way up versus recent years. BAI paid much more attention to Innovation this year. Innovation even had its own track for the speakers’ sessions, perhaps slightly overstated as the “Game Changer Bonus Sessions.” It was obvious that BAI was really trying to walk the innovation walk this year, a huge improvement.  

The Sessions

While BAI put its best foot forward, the speaking sessions garnered a dull grumble-fest among the attendees. There were some great speakers with session titles that sounded like they would be chock full o’ content. But as usual, most of the sessions tended to start out strong and then quickly devolve into unveiled advertisements for the speakers.

That said, we did find a few nuggets in the speaker sessions:

Six Big Ideas that Will Shape the Future of Finance – Online Banking Report’s Jim Bruene hit it out of the park in this entertaining Game Changer session. This was a rapid fire session that highlighted some of the shining stars from Bruene’s Finovate Conference Series. (We will also highlight a couple of them later in this article.)

1. Mobile is Everything – “Mobile is the new online banking, and online banking is the new branch.”
2. Simpler is Better – This is about going paperless and/or crazy simple. See Betterment’s website for an example of butt-simple investment management: https://www.betterment.com.
3. Youth Banking – The premise here is that it is now easier than ever to use technology to retain youth accounts, and youths sure don’t need branches! Bobber Interactive is a pioneer in this field with its social network/savings/gaming network for teens.
4. Advanced Payments at POS – See the Dynamics write-up below.
5. Selling Behind the Password – Think cross sales via PFM applications, such as Geezeo and SapientNitro.
6. App Stores – A good example is Yodlee’s MoneyCenter, which is an app store within the PFM product. Once inside the PFM system, the user can download, say, an H&R Block app for investment advice.

Tapping into a New Generation of Consumers – GonzoBanker’s Quintin Sykes attended this general session co-hosted by Twitter co-founder Biz Stone, and Forbes publisher, Rich Karlgaard. According to Sykes, “In this session Biz Stone encouraged bankers to think of Twitter as a free “superpower” to extend the bank’s reach. Biz spoke about the passion he and his co-founders had in building the initial product and how it might be used by financial institutions. His tips included:

• Build relationships vs. broadcasting
• Listen
• Keep things as casual/friendly as possible—humanize
• Understand its real-time nature

In other words, robo-tweeting the latest press release alone isn’t going to get it done if you decide to make Twitter a part of the marketing arsenal. Twitter users want to follow and engage with something more human.”

Breaking the Mold! – This was the session with filmmaker Oliver Stone. Billed as Stone – a ’Nam vet and son of a Wall Street exec – providing “insights into breaking out of the norm to capture consumer attention and create a value exchange that can build brand, loyalty and new opportunities.” Well, it wasn’t that buzzwordy or on topic by a long shot. It was more of a stream of consciousness conversation that did touch on the financial crisis. It was a love or hate situation. Q and Eric hated him; I enjoyed the bright dude for the entertainment value:

• On his portrayal of George Bush in the movie, “W”: “We tried to portray him as he is. And everything we read suggested he really is that shallow – but in a funny way.”
• On the straight-up gambling big banks took to cause the financial crisis: “The big banks lost interest in boring banking, so they raised the stakes.”
• “Too big to fail was a massive delusion. We should have funneled the money into Fannie and Freddie to address the root cause of the problem – housing. We should have let the big banks fail.”
• But then he followed that up with some sage advice to banks: “Pay higher rates.” Oi vay!
• It wouldn’t be an Oliver Stone talk without a conspiracy theory: “Large banks all know the inner workings of each other. The idea of insider information is dead now. The information is too easy to find, and it spreads too fast. Lots of evidence suggests that there was a rumor started about Bear Stearns that caused its downfall.”

Mobile: Cutting Edge of the New Paradigm in Retail Financial Services – Q also attended this session and noted: “With the most buzzword-laden session title in conference history, Mercatus actually brought the goods with some interesting figures on mobile adoption. While many have already seen the predictions around mobile banking exceeding online banking usage by 2015 and understand that offering mobile banking is now table stakes, it was the mobile adoption rates by ethnicity that were the most interesting. Adoption was lowest in Caucasians (8%) and highest in African-American (27%) and Asian (26%) groups. Bob Hedges and Teresa Epperson also discussed consumers’ increasing willingness to switch financial institutions based on mobile features, particularly large-bank customers who have higher expectations.”

Cool Vendors

OK, so we only attended a few sessions that we thought were even in the ballpark of interesting. On the other hand, the vendor booths were teeming with new vendors with attention-grabbing ideas. For this article, Eric, Quintin and I decided to forego the big players in our market – Harland, Fiserv, FIS, Jack Henry, OSI, etc. While the big boys are certainly still trying to innovate, what they are doing pales in comparison to some of the young punks out there. The big vendors are more likely to continue with their Innovation the old fashioned way …… they’ll buy it.

Reality Check: We are going to profile vendors with cool new ideas. Some are not profitable. The majority are pretty well unproven by most definitions. Some may be too gimmicky to catch on. And who knows who they’ve integrated to? That’s not the point. We’re not making “Buy” recommendations here; we’re making “Dude, check it out!” observations. These were some vendors with some hip brainchildren.

oFlows – Q and I both thought this was the most impressive demo we saw. It was also the most no frills, Gonzoesque booth we saw. Quintin noted that “oFlows blew us away with its account origination platform. Using a workstation and an iPad simultaneously, oFlows showed off the ability of a CSR and customer to work together on an account application. In branch, the solution can synchronize application data between the workstation and the iPad in near real-time and allow the customer to supply a wet signature with a stylus.”

Don’t feel like going into the branch? Well, the consumer can do his iPad side of the transaction from the bar, jail or even under water if he has the WaterProof App. oFlows even has the ability for the consumer to scan/photo and submit docs remotely.  

Dynamics – All three of us were impressed with what Dynamics is doing. Eric summed it up well: “They make electronic credit/debit cards that can change the mag-stripe by a click of a button to allow banks to issue one card for both debit/credit. It can also allow the user to direct a transaction to either his savings or checking account with a button click. Additionally, they have a card called Hidden with a security feature that allows the user to enter a four digit pin, and only then will the card display the account number.”

Mitek mobile – Mitek has a cool little app that uses OCR to allow a consumer to scan/photo an invoice with her phone. Mitek then uses the scanned data to auto-fill the mobile bill pay request and complete the transaction. The data is also saved for recurring transactions. Nicely simple. 

BillShrink –  Q pointed out that BillShrink has, bar none, the best tag line in the banking world: “BillShrink, where Shrinkage is Good.” Damn, now that’s a marketing budget well-spent! Quintin noted that “BillShrink was also showing off its ability to use transaction data to offer coupons, ads and recommendations for savings inside online banking sessions and eStatements. Loyalty programs can also be supported with the technology.”

Other Hot Topics – Q-Dog tells us that “Out-of-band authentication and fraud detection technologies are hot. Among several players on the floor, PhoneFactor was promoting its voice and text message-based out-of-band authentication services. Like PerSay, another competitor in the space, voice biometrics is an option for identifying customers and confirming activity. The solution can be used both for online banking customers and for internal VPN users.”

Old School – OK, so we had our share of ATM and triple decker cash counting machines at BAI again. Nowhere near like we used to see, though. We even had an ATM parts booth. Eric had the best line about these guys: “It’s good to see that ATM parts providers are still around. I asked how much the blue part was and got a grimace from the old school booth rep.”

Lambors and Booth Babes – The Vendor Expo was certainly scaled down this year. No city block-sized booth from VISA or MasterCard or anyone for that matter. In a true sign o’ the times, Eric, Q and I noticed a frightening trend in the Vendor Expo – not a single sports car or, uh, hired modeling assistant in the vendor booths. Not a one.  

THE Event

Thanks to all of our great friends/clients/supporters for making THE Event such a screamer.

I ain’t too old to hurry
Cause I ain’t too old to die
But I sure am hard to beat
–“Ride On,” AC/DC

So the drama continues. With aggression, a trunk full of money and some serious fast talking, your Three GonzoBanker correspondents will get the drop on the nightstalking Hired Muscle from BAI. We have learned our lesson and pledge to never, ever again attempt to hand out free t-shirts in the Vendor Expo. What were we thinking in the first place? It was close, but the fog is lifting. We will survive.
–Hodgins

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