Latinia, a Spanish messaging vendor, has announced a ‘tweet banking’ notification product.

Latinia strictly proposes the use of Twitter as an alert [communications] channel, via direct messages (DM), where the convenience of the clients prevails, being able to choose which channel to use to receive status of their accounts, cash withdrawals, etc., whether via SMS, push-notes or Twitter. In Latinia we have called it ‘tweet banking’. To this respect, Latinia has introduced the latest innovation of its infrastructure product LIMSP during this past year, after the implementation of push notifications, working on opening to new asynchronous channels on its service delivery product line-up.

The vast majority of bank executives are not confident that financial reform will be effective in detecting the broad risks to the financial system and preventing or reducing the threat of future taxpayer-funded bailout, according to Grant Thornton LLP’s 17th Bank Executive Survey, conducted in conjunction with Bank Director magazine.

When asked about the recent Dodd-Frank legislation, most bankers said that the provision that would impact their bank the most was the creation of consumer protection agency (73%). Bankers also were concerned that interchange fees paid by merchants and retailers to banks that issue debit cards would be set by the Federal Reserve in an amount that is “reasonable and proportional” (71%).

A new study released by Bankrate, Inc. shows that the costs of checking account fees have risen again this year to an all-time high. ATM fees leapt 5% from 2009, overdraft fees increased 3%, monthly fees for non-interest accounts increased 40%, monthly fees for not maintaining a minimum balance on an interest checking account increased almost 4%.

TCF National Bank announced that today it is filing a lawsuit challenging the constitutionality of the Durbin Amendment, which is part of the Wall Street Reform and Consumer Financial Protection Act of 2010.

“We believe these provisions violate our Constitutional rights on three separate grounds: the regulations take our property without just compensation and without Due Process of Law; and they also deny us Equal Protection under the law.”

The majority of bank customers continue to pay nothing in bank fees, according to a recent survey by the American Bankers Association. 67% of consumers spend $3 or less in monthly bank fees for services such as checking account maintenance and ATM access. 53% percent of customers pay nothing. 14% pay more than $10 per month.

According to a recent Mintel Comperemedia consumer survey, awareness of the new Reg E overdraft legislation is surprisingly high with 60% of online adults aware of the upcoming changes.

But "Most consumers are unable to define exactly what Reg E will cover, making banks' efforts to promote it that much more difficult," comments Susan Wolfe, VP of financial services at Mintel Comperemedia. "In other words, consumers are aware that changes are coming to their overdraft programs, but are not exactly sure what it means for them."

According to a recent Accenture survey, "A majority of executives at leading retail banks globally say average customer profitability has remained below pre-crisis levels, while their customers' price-sensitivity and inclination to "shop around" have increased."

Interviews with 46 senior banking executives in 14 countries -- including many of the world's largest institutions -- suggest that nearly half of the top retail banks globally (46 percent) have seen their average customer profitability decline by 5 percent to 15 percent since the financial crisis, while an additional 11 percent have seen even greater customer profitability declines.

What is BankSimple all about? For some insights, listen to this edition of The Pipeline podcast by Dan Benjamin. In this edition of his excellent podcast series, Dan interviews Alex Payne - who recently left Twitter to join BankSimple as co-founder and Chief Product & Technology Officer. Some fascinating insights into what BankSimple is all about. (You can request to join BankSimple on this page. You can follow Alex Payne on Twitter: @al3x).

The Financial Services Information Sharing and Analysis Center (FS-ISAC) has released the Executive Summary of the results of a three-day nationwide cyber attack simulation exercise conducted in February. FS-ISAC conducted the Cyber Attack against Payment Processes (CAPP) exercise in conjunction with a variety of payment systems industry partners to test the ability of financial institutions, retailers, card processors, and businesses to respond to and recover from major cyber attack incidents impacting payment processes. Over 700 financial institutions and other organizations participated. READ MORE »

Equity Bank and Safaricom have announced "an ultimate bank account that lets customers transfer money to and from their M-PESA accounts via their mobile handsets while enjoying other benefits that come with the bank account." Safaricom Chief Executive Officer Michael Joseph said “M-PESA is proud to launch another new initiative with our partners Equity Bank by offering a new service that will target customers who are looking for the convenience of a bank account that uses M-PESA as the tool to deposit money into their accounts. This is a great idea that will drive customers to save into their bank accounts and enjoy the benefits of having the value added services of both M-PESA and an Equity bank account."

An M-KESHO account will offer short term loan facilities as well as pay interest on mobile account deposits. Credit evaluation for loans will be based on scoring using 6 months of history of the consumers M-PESA balances. There is no application for to fill - the loan request is made by the consumer using the mobile phone.

For more information, see "M-PESA meets microsavings with Equity Bank deal in Kenya" on the CGAP blog.

In a press release titled "Very Few Americans Find Statements by Financial Institutions Completely Believable", the Harris Poll says that its research found that "very few Americans (between 2% and 5%) say they find statements completely believable if made by a spokesperson for one of these types of companies" - and that "almost two-thirds of Americans (64%) say they find statements made by a spokesperson from a credit card company not at all believable." Baby Boomers are even more negative about statements from credit card companies - 69% say they find them not at all believable.

Beneficial Bank, a full-service bank that specializes in serving the financial needs of the greater Philadelphia and South Jersey regions, has announced it is unveiling a new, education-themed retail banking concept with the opening of two new branches in Cherry Hill, New Jersey.

“Beneficial Bank is not only a bank, it is an education company that puts a priority on providing customers with the tools and resources that they need to become smarter about their money and do the right thing financially,” said Gerard P. Cuddy, President and CEO of Beneficial Bank. “Our two new campuses in Cherry Hill are a representation of Beneficial’s education philosophy and we plan for these innovative retail banks to become the blueprint for the next generation of Beneficial Banks.”

As a part of Beneficial Bank’s education mission and to commemorate its introduction to the community, the bank will donate $20,000 to the Cherry Hill Public Schools to support financial literacy education at Cherry Hill High School West and Cherry Hill High School East in the 2010-2011 school year.

For a fourth consecutive year, customer loyalty and perceptions of brand image among retail banking customers continue to decline, while satisfaction has leveled off, according to the J.D. Power and Associates 2010 U.S. Retail Banking Satisfaction Study released today.

Now in its fifth year, the study finds that overall satisfaction of retail banking customers averages 748 on 1,000-point scale in 2010—a slight decrease from 749 in 2009. The brand image of banks has also continued to decline, with customers perceiving banks as being more profit-driven than customer-driven, compared with 2009. In addition, the percentage of customers who say they “definitely will not” switch banks during the next 12 months has decreased significantly during the past three years to 34 percent in 2010, compared with 46 percent three years ago in the 2007 study. READ MORE »

Over the weekend, GetDebit.com reported on Green Dot's plans to become a bank holding company through the acquisition of Bonneville Bancorp. In a post titled "A New Model for Retail Banking?" on our PaymentsViews.com website, Glenbrook's Carol Coye Benson reacts to the news - saying she thinks that Green Dot's move "gives, I think, a peek at what may come for retail banking in the future."

The Federal Financial Institutions Examination Council (FFIEC) has released an updated Retail Payment Systems Booklet that replaces the version issued in March 2004. The booklet is one of 12 that, in total, comprise the FFIEC IT Examination Handbook. The OCC commented: "The updated booklet incorporates developments in various aspects of retail payments activities since the first edition was issued and provides guidance on the risks and risk-management practices applicable to national banks. The booklet’s enterprise-wide perspective makes it a valuable tool to an entire organization in addition to an information technology department."

The Federal Reserve has provided a new online Federal Reserve Board publication titled What You Need to Know: New Overdraft Rules for Debit and ATM Cards intended to help consumers better understand rules that provide additional protection when a debit card or automated teller machine (ATM) transaction causes an account to be overdrawn. READ MORE »

In a post titled "Is the Internet Finally Robbing the Greedy Financier’s Gravy Train?", Sarah Lacy writes for TechCrunch about the many traditional industries the Internet has wrecked - and how she sees the recent activities among startups (and acquisitions) indicative of a new trend - companies that are "finally aligning interests between the finance professionals and the users." Lacy goes on to note that "finance has been so anti-innovation and so anti-consumer for so long, these companies don’t have to be perfect to be huge."

In an article titled "New Features, and Fees, for Checking Accounts" in the New York Times Bucks blog, Jennifer Saranow Schultz writes about Fifth Third Bank's pricing strategies involving packaging services together in lieu of providing free checking. She asks: "What services would you be willing to pay for if only your bank would offer them? Or would you rather just have free checking?"

In an article titled "Banks Roll Out New Check, Card Fees", Robin Sidel wrote for the Wall St. Journal's Saturday edition about steps that banks are taking to deal with up to $50 billion in lost revenue in 2010 as a result of changes to credit card and checking account legislation and regulatory requirements.

In an article titled "Cybercrooks stalk small businesses that bank online", Byron Acohido writes for USA Today about how small businesses are being targeted by fraudsters seeking to gain online banking account userid's and passwords. According to Acohido, "the American Bankers Association and the FBI are advising small and midsize businesses that conduct financial transactions over the Internet to dedicate a separate PC used exclusively for online banking."

In her "Color of Money" personal finance column in today's Washington Post, Michelle Singletary writes about 2010 being the "Year of Consumer Power" - reflecting on the legislative (The Credit Card Accountability, Responsibility and Disclosure Act of 2009) and regulatory (overdraft fees) changes that are scheduled to take place as 2010 plays out.

In an article titled "Move Your Money: A New Year's Resolution", Arianna Huffington and Rob Johnson write about a populist movement they're starting to encourage folks to move their money out of the major banks and into local community banks.

The idea is simple: If enough people who have money in one of the big four banks move it into smaller, more local, more traditional community banks, then collectively we, the people, will have taken a big step toward re-rigging the financial system so it becomes again the productive, stable engine for growth it's meant to be. It's neither Left nor Right -- it's populism at its best."

They've put together a web site and a video about the idea.

A few weeks back, Glenbrook's Carol Coye Benson issued a challenge - asking "What Are the Best Ways for Banks to Replace Lost Overdraft Fee Income?" She was looking for creative ideas from the community on how bankers should deal with perhaps their most significant financial challenge ahead.

Today, Carol has summarized the results of her search for ideas in a new post on PaymentsViews.com titled "No News is Bad News?". She writes:

We got very few ideas at all, and none from bankers! The no-news-from-banks could, of course, be because banks are keeping their well-laid plans a deep and dark secret. Or it could be …. there are just no good ideas?"

Read her full article here.

In an article titled "Consumer Fees: The Hits Keep Coming", Maria Aspan writes for the American Banker about how bankers are scrambling to deal with the assault on various banking and credit card fees - noting that "the banking industry has been shaken out of its complacent reliance on consumer fee income." Aspan quotes Glenbrook's Carol Coye Benson:

Overdraft fees for bankers are like heroin — they know it's bad for them (particularly in building the trust relationship with customers that they want), but the revenue just feels so good," Carol Coye Benson, a managing partner in the consulting firm Glenbrook Partners LLC, wrote in a November blog post. "The Fed's new rules are detox."

The Federal Reserve Bank of Boston has published The 2008 Survey of Consumer Payment Choice by Kevin Foster, Erik Meijer, Scott Schuh, and Michael A. Zabek.

From the abstract:

This paper presents the 2008 version of the Survey of Consumer Payment Choice (SCPC), a nationally representative survey developed by the Consumer Payments Research Center of the Federal Reserve Bank of Boston and implemented by the RAND Corporation with its American Life Panel. The survey fills a gap in knowledge about the role of consumers in the transformation of payments from paper to electronic by providing a broad‐based assessment of U.S. consumers’ adoption and use of nine payment instruments, including cash.

The average consumer has 5.1 of the nine instruments, and uses 4.2 in a typical month. Consumers make 53 percent of their monthly payments with a payment card (credit, debit, and prepaid). More consumers now have debit cards than credit cards, and consumers use debit cards more often than cash, credit cards, or checks individually. Cash, checks, and other paper instruments are still popular and account for 37 percent of consumer payments.

Most consumers have used newer electronic payments, such as online banking bill payment, but they account for only 10 percent of consumer payments. Security and ease of use are the characteristics of payment instruments that consumers rate as the most important.

In an article titled "Prepaid vs. Checking: Fairer Fight?", Maria Aspan writes for the American Banker about the state of the prepaid card business in the US - and how the upcoming checking account overdraft fee reforms could affect the prepaid card industry.

The UK Payments Council has announced that "the Payments Council Board has agreed to set a target date of 31st October 2018 to close the central cheque clearing. Cheque use is in long-term, terminal decline. The Payments Council was faced with the choice of either managing the decline to ensure that personal and business cheque users have alternatives easily available to them; or to stand back and let the decline take its course. It has decided that its active involvement can help prevent confusion and deliver cheque alternatives that are acceptable to cheque users. The Payments Council wants to ensure that consumers and businesses are not left high and dry when the closure of the clearing occurs." READ MORE »

Last week, Glenbrook's Carol Coye Benson posted an item on PaymentsViews.com titled "Payments Views Challenge: What Are the Best Ways for Banks to Replace Lost Overdraft Fee Income?". Today's the last day to share your ideas.

One of Glenbrook's rules about innovating in payments is that "convenience is trump" when it comes to consumer adoption.

Reading Nicole Sturgill's post titled "The Underbanked – Are we making cross-selling efforts or are they just not working?" on the Counting on Currency blog this morning about the FDIC's recently issued report on the Un/Underbanked brings this into focus again:

"The #1 reason the underbanked participants cited was that it was easier to get a payday loan or borrow from a pawn shop than it was to get a bank loan."

Over on our sister blog PaymentsViews.com, Glenbrook's Carol Coye Benson asks "What Are the Best Ways for Banks to Replace Lost Overdraft Fee Income?".

She writes: "Bank income from debit card overdraft fees is variously estimated as $25 billion to $38 billion annually. The recently announced Federal Reserve Bank regulations requiring opt-in procedures will result in a gigantic hit to retail bank P&Ls, as we wrote about recently."

Do you have some ideas for what retail bankers should be doing to respond to the revenue impacts? You can share them here.