Caroline willard wallets and security round table
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"We used to have the perception that, as financial institutions, we needed to wrap our arms around our members...But we are seeing a trend where self-service is perceived as good service. Consumers really want to be able to enact their own controls and provide their own service." Caroline Willard, CO-OP Financial Services
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Caroline willard wallets and security round table
- 3. EVP, MARKETS & STRATEGY, CO-OP FINANCIAL SERVICES WILLARD CAROLINE
- 4. INSECURITY 2% 91% 36% think mobile wallets are safe in store. think they’ve surrendered their right to privacy. are reluctant to try a mobile wallet because of security. “fatigue denial”. Consumers feel and
- 5. USAGE Up 100% for young adults. TRANSFERS HALF of young adults did a P2P transfer in 2014. 2014 31% of young adults and 28% of mobile banking users switched financial institutions over the past two years, compared to 20% in 2013. NOW Young adults and mobile banking users are now nearly TWICE as likely as the average U.S. consumer (16%) to have switched. MOBILE IS A MOTIVATOR P2P IN 2014 SWITCHING INSTITUTIONS
- 6. MINDING THE GAP PROVIDING NEEDED SECURITY
- 7. HOW DO WE MOVE FORWARD?
- 8. WALLETS
- 9. WHAT ABOUT SECURITY? TOKENIZATION EMV HOST CARD EMULATION CONTROLS & ALERTS
- 10. SEIZING THE NOW
- 11. Director of Product Development, CO-OP Financial Services MICHELLE THORNTON Founder, Ondot Systems RACHNA AHLAWAT CEO dnd Cofounder, Finivation BRIAN BODELL MOBILE WALLETS EXPERTS
Editor's Notes
- [Thank roundtable participants for participating] Today we’re talking not just about wallets wallets wallets, as John MacAllister said, but specifically about the issue of security and mobile wallets. Because we’re all here at THINK 15, where we’re determined to Seize the Now, we want to take a minute right now to point out that both security and mobile wallets are part of huge topics of interest to consumers. It’s not only important to understand these trends individually, and to understand how they intersect each other, but also to understand how they intersect with you. Because in addition to representing a busy, noisy, active marketplace, the opportunities here apply to you.
- People say they’re afraid that mobile is not secure, but they’re using it at an accelerating pace. Here are just a few recent statistics. [review slide]
- These statistics are from Mercator. In their most recent biannual consumer survey, they found that young adults used P2P twice as much in 2014 as they did in 2013. About half of young adults had done a P2P transfer in the last year. That same group was also much more likely to have switched financial institutions in the 2014 survey – up about 50 percent from the 2013 survey and about twice as likely to have switched FIs as the average consumer. P2P is one of the most popular mobile banking features, and Mercator thinks it’s driving mobile growth and inspiring young consumers to switch.
- So, consumers are using more mobile banking, more P2P and more mobile wallets even though they’re living with insecurity. What does that mean? We’re going to go out on a limb here and say that modern consumers are experiencing an insecurity gap. That is, they are aware of security concerns. They worry about security. But they want to participate in a culture that is increasingly and irresistibly mobile. Our big question here today is, can we help members bridge this gap? Can we Minding the Gapthey want and need? Can we make it safe for them to use mobile wallets – and mobile banking and bill pay and P2P? And maybe just as important, can we help them act and feel more secure, so they can feel confident about mobile transactions – and confident about us.
- That being said, how do we move forward? How do we participate in the mobile wallet space? And how do we make sure we’re doing it in the most secure, confidence-inspiring way? Let’s look quickly at the situation:
- Here’s a slide we’re getting pretty good at making. That’s because every time we do a new mobile wallet presentation, we need to change up the wallets depicted. This market changes quickly, and so do our slides. Today I’m going to forgo the usual wrapup on who’s acquired whom and who is now history. Instead, I want to take a look at the characters assembled here and ask you, as credit unions, which of these options you’d like to offer to your members. If you pick Apple Pay, you’re choosing a market that Mercator estimates will spend $1 trillion in 2015 – and around $2.3 trillion by 2020. On the other hand, Android users make up half of the smartphone market, so Samsung Pay seems like an obvious choice too. It’s compatible with both NFC and mag stripes, so users can use it almost anywhere. Then again, the merchants behind CurrentC represent $1 trillion in annual sales. PayPal is the biggest mobile wallet; you don’t want to overlook that one. Google Wallet – the wallet that won’t die – has a new outlook on life now that it’s acquired Softcard, which used to be Isis. And, of course, it doesn’t seem smart to rule out Visa or MasterCard. In past years, we’ve seen some sketchy players in the mobile wallet space. But really every player on this slide is a big gun. If you don’t have to, I don’t think you want to opt out of working with any of these guys.
- If you want to keep your options open – and secure – you may need to make some investments. Apple Pay and many of the new wallets that are rolling out are powered by tokenization. If you don’t already have tokenization service set up, you can get it – and it isn’t too prohibitive to do so. VIsa Checkout and MasterCard MasterPass both work with Host Card Emulation. Without going into the technical details there, this is also a security feature that’s available to credit unions who use Visa or MasterCard, and it’s free [NOTE: IS THAT CORRECT?] Here, EMV doesn’t really apply much in this environment. It’s more relevant for card-present transactions. Controls and alerts products, like CardNav, aren’t really wallet-specific, though we think they can have a major impact on both mobile engagement and promoting a sense of self-empowerment for members. And it definitely makes an impact on security.
- Here is a good example of credit unions seizing the now. In the past, we’ve presented new ideas, breakthrough technologies, leading edge trends. Sometimes they’ve applied to credit unions. Sometimes they haven’t – at least not yet. But everything we’ve talked about today applies to you. You can participate in most if not all of the leading mobile wallets. You don’t have to choose one, or even a few. You have the security tools at your disposal to enable your credit union to remain current with these wallets – and the security you need is relatively accessible. One of the things that might be making members insecure is the amount of change in this space. The technology, the branding, the security features and concerns – they’re all changing, all the time. In addition, security itself is more confusing than ever. Sometimes we wonder if people really know anything about digital security – and whether they feel like they have any impact at all on their own safety and privacy. And so part of what I’d like to discuss is whether credit unions can play a role in helping members understand security more clearly. And to give them clarity about their choices and actions. And to give them tools that help them feel empowered. We think there’s one more piece to the puzzle, though, and it’s one of the most important pieces of all. The mobile side of this equation is already exciting. It is, really, irresistible – mobile payments, mobile banking, mobile commerce. It’s all coming and it’s going to be fabulous. Don’t get me wrong: I know this isn’t the last time we’re putting together one of those slides with the new crop of mobile wallets in it. There’s still upheaval to be had. But it’s also exciting, and it’s where our culture is heading. And if credit unions can find a way to be the bridge between the new technology everyone wants and the security they need, then opportunity is ours. So, now that we’re asking these big questions, let’s put our colleagues on the hot seat...
- Joining me now is a stellar lineup of experts. [introduce everyone] SOME QUESTIONS: For Michelle: Are mobile payments, in fact, secure? For Rachna: Do you think consumers are feeling helpless as well as insecure? Is self-service an important tool to help them feel confident? For Brian: Do people feel differently about bill pay than they do about wallets? Is the fact that bill pay comes from their financial institution significant? For all: What should credit unions be doing to help consumers feel more comfortable with mobile security? What role should credit unions be playing in general with mobile wallets? Is there a strategy in here somewhere? What do you think will be different next year at THINK 16?