DIGITAL BANKING TRACKERTM AUGUST 2016 Keep Bank Accounts Simple And Secure Number26 partners with Wirecard for platform reaching 200,000 users FIS and Payment Alliance International announce plans to bring Touch ID access to 70,000 ATMs across the U.S. Early Warning, Fiserv partner to expand reach of real-time P2P payments to more than 6,000 banks and credit union, including the 40 largest financial institutions in the country Acknowledgment Acknowledgment Sponsorship for the PYMNTS Digital Banking Tracker was provided by Urban FT. Urban FT has no editorial influence over the Tracker’s content. In addition, the methodology for Tracker supplier rankings was developed exclusively by the PYMNTS.com research and analytics team. The methodology, scoring and rankings are done exclusively by this team and without input or influence from the sponsoring organization. © 2016 PYMNTS.com all rights reserved 2 TM Digital Banking Tracker powered by Table of Contents 04 What’s Inside 06 Cover Story 09 Scoring Methodology 11 Top 20 Power Rankings 15 Watch List – New Additions 16 News 21 Scorecard – B2C 46 Scorecard – B2B 65 About © 2016 PYMNTS.com all rights reserved 3 What’s Inside What’s Inside It seems these days like people are constantly looking down at their smartphones. In this case, however, that perception is the reality. According to 2015 research conducted by Informate, a Nielsen-owned mobile intelligence company, people are spending more time than ever before checking smartphone apps, and social media eats up a notable amount of the average person’s day. That may not come as much of a surprise, but the numbers themselves are still striking. According to the research, Americans check their Facebook, Twitter and other social media accounts 17 times a day, or roughly once every waking hour. And Americans aren’t even at the top of the list, as smartphone owners in countries like Thailand, Argentina, Mexico and South Africa open their social media apps at least 40 times a day. With so much time spent on Facebook and Twitter, it’s no surprise that banks are spending nearly as much time trying to reach customers on those social networks. Around the digital banking industry, companies have made recent moves designed to connect with consumers via social media. Here’s a snapshot of some notable news items from the last month: Absa became the first bank to offer banking services via Facebook’s Messenger feature when itlaunched ChatBanking for Facebook Messenger. The service will allow customers to view their balances, view statements and make purchases and payments via Messenger. The launch is the second time Absa has brought banking to social media, as the debut of the Facebook service follows the rollout of a similar service on Twitter. Other companies also looked to jump into the chatbot banking game. Kasisto, a Silicon Valley research lab, debuted MyKAI, a mobile banking chatbot. Users can interact with MyKAI to perform tasks like checking balances, transferring funds and itemizing past purchases in order to track spending habits. According to MyKAI executives, the service will be available for integration through Facebook Messenger, Slack and other SMS messaging platforms. Meanwhile, banks in Singapore are hoping social media can help bolster their security protocols. According to reports, the nation’s financial institutions aretesting the use of Facebook IDs and Twitter usernames as a means of account access and payment. Under the new system, customers who have registered their social media profiles will be able to conduct peer-to-peer transactions without the need for account numbers or passwords. © 2016 PYMNTS.com all rights reserved 4 What’s Inside For this month’s Tracker cover story, PYMNTS caught up with John Dancu, President and CEO of digital security firm IDology, to talk about what he sees as the biggest challenge for banks looking to implement tougher security features for their digital and mobile solutions. The Digital Banking June Tracker Updates In this issue, we’ve profiled 78 players from the FinTech and consumer banking spaces, including 8 additions to the Tracker: 22seven, ChimpChange, FJMoney, PocketSmith, ReadyForZero, FIS, GFT Technologies, Tyfone Inc. © 2016 PYMNTS.com all rights reserved 5 Cover Story ...identity verification “needs to evolve to incorporate more real-time device characteristics that bind an individual to a device.” Keeping Bank Accounts Simple And Secure “The balance between freedom and security is a delicate one,” former U.S. Congressman Mark Udall once said. The sentiment is especially relevant among many banks right now, as they attempt to roll out new and more advanced digital and mobile banking systems. It’s a difficult balance to strike. Modern technology has trained consumers to expect digital and mobile solutions for everything from getting directions to buying new shoes to be both easy to understand, and safe and secure. The same goes for digital banking. According to the results of a recent survey from Trustev, consumers are more concerned with simplicity than security, as they’ve been conditioned to place convenience far ahead of security. “I think convenience trumps basically everything,” one Trustev executive told PYMNTS soon after the survey was released. The balance between simplicity and security is so crucial, and difficult ot find, that John Dancu, President and CEO of digital security firm IDology, told PYMNTS it could be the biggest challenge for banks looking to implement tougher security features for their digital and mobile solutions. “It’s important that you make it really simple for the consumer,” Dancu said, “while, at the same time trying to ferret out the fraud.” PYMNTS recently caught up with Dancu to discuss security and authentication in the digital banking space. © 2016 PYMNTS.com all rights reserved 6 Cover Story Keeping pace with “innovative” fraudsters Dancu stressed that it takes multiple layers of security, which must be continually updated and improved, to keep up with bad actors. “I think fraudsters are innovative individuals, unfortunately. It’s their full-time job,” Dancu said. “So one of the things you can’t do is rely on just one layer. You have to have multiple layers that give you dynamic feedback, and then you need to be able to make decisions off that dynamic feedback.” For Dancu and his team, those layers include, among others, ID and driver’s license verification, mobile device authentication and location- ...convenience based protocols. trumps basically “You have to validate that consumer and make sure that they’re the right everything.” person, so accessing information relative to that consumer and their mobile “ device is going to be important,” Dancu said. “Are the device, location and activity attributes that are surrounding that transaction correct? Is the license good? Is the data on the phone good? And when you add more and more layers to this, you can validate people.” Dancu also noted that for many banks, especially larger financial institutions, old security technology can do more harm than good. “A lot of the banking systems that are out there for authentication are legacy systems that are ancient, and ancient can be seven to 10 years since it was deployed,” he said. “They’re old. They’re antiquated. They don’t work well. They don’t locate people. They don’t have flexibility.” Dancu said banks need to move quickly in order to better protect their customers. He also noted that some “innovative” banks have started to update their legacy systems to improve their identity verification capabilities. Still, Dancu said, “a lot of the financial institutions have a long way to go.” Simplicity and security Of all the layers that banks and financial institutions should be using in order to protect their customers, Dancu said, the most important is the final layer – the one that hides the deep arsenal of security protocols away from the consumer. Dancu said that the next step for most banks is to reduce friction and frustration among customers. “I think some of the successes are going to be making the process really simple and easy for the consumer,” he said. In order to do that, Dancu said, banks and financial institutions need to keep the security process separate and away from the customer experience. He noted that opening an account is one of the biggest pain points for customers using mobile devices, as users do not want to take the time to not only download the mobile app, but also enter extensive identity information in order to verify that they are who they claim to be. © 2016 PYMNTS.com all rights reserved 7 Cover Story The challenge becomes ensuring a customer’s identity without burdening them with a long list of security requirements. In the case of IDology, Dancu said that he and his team work with clients to build a “mobile identity” in order to create a simple and secure two-step verification process. “The way we connect is constantly evolving and this creates some interesting scenarios in the verification world, because it also opens more avenues for fraudsters to exploit,” he said. “With these factors at play, identity verification needs to evolve to incorporate more real-time device characteristics that bind an individual to a device.” Dancu said that his team focuses on mobile identity due in large part to the way individuals use their mobile devices. Many You have to have multiple consumers get new smartphones, swap out SIM cards while traveling or change their phone plans frequently. Those changes layers that give you are linked to and tracked by the customer’s mobile phone dynamic feedback, and number, and can be used as part of verification. “ then you need to be able Dancu emphasized the importance of evolving with ever- changing consumer behavior in designing a comprehensive and to make decisions off convenient security solution.