Matt Wilcox Pro

The moment online banking became a thing, speculation about the demise of brick-and-mortar banks took off. Yet as recently as three years ago, experts were telling The Financial Brand’s Jeffrey Pitcher not to be in any hurry to write the physical bank’s obituary. Indeed, at about the same time, I pointed out that JPMorgan Chase had just opened one of its largest U.S. branches, announced plans to open 400 more in 20 markets, and was building its new headquarters in the not exactly low-rent district known as Manhattan. And just two years ago, I wrote an article for The Financial Brand, citing a Fiserv survey suggesting that …

… buildings still matter. More than half of respondents reported visiting a physical branch in the month prior to the survey. Over a six-month period, that figure jumps to 80% … The most common reasons for visiting a branch include depositing checks (61%) or cash (40%) and withdrawing cash (44%) … none of these transactions requires a branch visit. There appears to be either an emotional component (comfort in a face-to-face meeting) or an educational gap around digital capabilities that keeps people visiting physical structures.

But COVID-19 may be a game changer.

While digital banking has enjoyed meteoric growth on its own merits since Day One, stay-at-home policies now make participation all but mandatory. For holdouts, this represents a form of trial purchase, unsought though it may be. As PYMNTS.com reported,

COVID-19 has forced millions of employees to work remotely and consumers around the world are turning to digital channels to access banking services, which has required financial institutions to focus on their online and mobile offerings.

Assuming the experience will have proved positive by the time the pandemic subsides, those who at first grudgingly gave in to digital banking may well have learned to like it and decide to stick with it.

Forced trial purchase isn’t the only development threatening brick-and-mortar. The functions once thought to require face-to-face exchanges are fast moving online. Deposits, loans, problem-solving, and even notary services can all be done on a portable device or home computer. Programs are even arising to allow the unbanked to avail themselves of digital transactions. And AIs are doing an increasingly good job of person-to-machine interaction with a high degree of client satisfaction. (See my July 31,2017 post, “Dawn of the artificially intelligent banker.”)

Moreover, digital banking needn’t entirely preclude the personal encounter. Most online banks offer live chat and—soooo last century though it may be—even getting on the phone with a real person. To be sure, some financial institutions force clients through a series of other steps before providing the live interaction option (which I’m not convinced is such a good idea), but at least they provide it. What few transactions remain that stubbornly demand face-to-face interaction seem to transition well to the likes of Zoom and Skype.

For a while it seemed that a local, physical presence gave financial institutions a perception of greater legitimacy. Many clients, especially older generations, were loath to entrust funds to a bank they’d never seen and couldn’t visit in the event of a problem. Thanks to familiarity, that misgiving seems to be fading. The Financial Brand’s co-publisher Jim Marous observed:

While usage has generally increased from year to year for all age groups, the rate of growth has been the highest for the older segments, who were slower to adopt mobile banking initially. In fact, given the size of the demographic segment, the 50+ cohort provides one of the last great targets for growth of mobile and online banking.

It still may be a bit soon to repurpose your branches. But you might want to think twice before building too many more.

Thoughts on direct voicemail messaging

Originally posted July 10, 2017. As stay-at-home policies continue, there’s a greater reliance on voicemail messaging—especially during this election year—so I thought this might be a timely reminder.

Certain marketing tactics, legal though they may be, can be troublesome. Today’s ambivalence du jour concerns direct voicemail messaging. 

As its name implies, direct voicemail messaging sends a prerecorded message straight to voicemail. Since phones do not ring and charges for minutes do not rack up, Do Not Call laws don’t apply. 

Companies that provide the service for generating leads claim (what else would you expect?) that direct voicemail messaging is effective. 

Fine, but sometimes there are other considerations, e.g., it can come across as sneaky.  

For one thing, consumers cannot block direct voicemail messages. For another, just look at the names of selected service providers. Names like Voicecasting might sound innocuous enough, but the field also includes gems like Slydial, Slybroadcast, and Callfire. 

Direct voicemail messaging appears to enjoy some popularity among financial institutions: 

The most frequent users of Ringless Direct-To-Voicemail are Debt Collectors, Financial Institutions and Student Loan Servicers. 

That excerpt comes from the Do-Not-Call Protection website, whose motto is “We help business to business, business to consumer and single-agents to comply with the Do Not Call Laws and Telephone Consumer Protection Act.” They’re not a consumer advocacy group, so by “helping to comply” they more likely mean “avoiding legal hot water” than “avoiding being annoying to consumers.” 

As I write, Direct voicemail messaging is facing new legal challenges. The New York Times reports: 

Regulators are considering whether to ban these messages. They have been hearing from ringless voice mail providers and pro-business groups, which argue that these messages should not qualify as calls and, therefore, should be exempt from consumer protection laws that ban similar types of telephone marketing. 

But consumer advocates, technology experts, people who have been inundated with these calls and the lawyers representing them say such an exemption would open the floodgates. Consumers’ voice mail boxes would be clogged with automated messages, they say, making it challenging to unearth important calls, whether they are from an elderly mother’s nursing home or a child’s school. 

… The commission is collecting public comments on the issue after receiving a petition from a ringless voice mail provider that wants to avoid regulation under the Telephone Consumer Protection Act of 1991. That federal law among other things prohibits calling cellular phones with automated dialing and artificial or prerecorded voices without first obtaining consent—except in an emergency. 

The United States Congress appears divided on the matter. (Congress divided? I know, you’re shocked.) Ars Technica reports: 

In March, a marketing company called All About the Message petitioned the Federal Communications Commission for a ruling that would prevent anti-robocall rules from applying to ringless voicemails. But the company withdrew its petition without explanation in a letter to the FCC last week, even though the commission hadn’t yet ruled on the matter … 

The Republican National Committee supported All About the Message’s petition, claiming that it has a First Amendment right to use direct-to-voicemail technology without any TCPA restrictions. Senate Democrats opposed the petition, saying that it would allow “telemarketers, debt collectors, and other callers [to] bombard Americans with unwanted voicemails, leaving consumers with no way to block or stop these intrusive messages.” 

I won’t wax partisan here, but I will point out that legislated regulations often overshoot, piling on onerous requirements no one had counted on. If you don’t believe me, I’d suggest brushing up on Dodd-Frank.

I’ll also point out that self-regulation is one of the best ways to avoid onerous government regulations. That’s why organizations like the Data & Marketing Association (DMA) urge members to police themselves. “These guidelines,” reads the introduction to DMA Guidelines for Ethical Business Practice, “represent DMA’s general philosophy that self-regulatory measures are preferable to governmental mandates.” 

From a marketing standpoint, I return to my above assertion that direct voicemail messaging, especially for lead generating, can appear sneaky. Upon finding a directly deposited voice mail message, many consumers react with How did that get there? instead of I’d better pay attention to this message. 

Unless you’d like We’re sneaky to become part of your brand, you might think twice before using direct voicemail messaging.

Doubtless readers of this blog are aware of the limitations of facial recognition software. Among them are its troubles with identifying and authenticating people of color.

And that’s no small number of people. Depending on whose definitions and statistics you accept, “people of color” refers to some 70 percent of the world’s population. In the United States alone, we’re talking about 40 percent of the U.S. population—around 132 million people.

Facial recognition software typically has difficulty distinguishing very dark or very light skin and confuses women’s faces more often than men’s. “There are various reasons why facial recognition services might have a harder time identifying minorities and women compared with white men,” writes c|net’s Queenie Wong.

Public photos that tech workers use to train computers to recognize faces could include more white people than minorities, said Clare Garvie, a senior associate at Georgetown Law School’s Center on Privacy and Technology. If a company uses photos from a database of celebrities, for example, it would skew toward white people because minorities are underrepresented in Hollywood. Engineers at tech companies, which are made up of mostly white men, might also be unwittingly designing the facial recognition systems to work better at identifying certain races, Garvie said. Studies have shown that people have a harder time recognizing faces of another race and that “cross-race bias” could be spilling into artificial intelligence. Then there are challenges dealing with the lack of color contrast on darker skin, or with women using makeup to hide wrinkles or wearing their hair differently, she added.

MIT Technology Review, reported that a US National Institute of Standards and Technology test found, among other issues:

For one-to-one matching, most systems had a higher rate of false positive matches for Asian and African-American faces over Caucasian faces, sometimes by a factor of 10 or even 100. In other words, they were more likely to find a match when there wasn’t one … Algorithms developed in the US were all consistently bad at matching Asian, African-American, and Native American faces. Native Americans suffered the highest false positive rates.

False arrest

Consequences range from the inconvenience of not being able to open your smartphone, to your bank’s proprietary app having trouble recognizing authorized users …

… to being cuffed in front of your family, dragged to jail, and held for 30 hours because a Detroit police force’s algorithm misidentified you.

Which is exactly what happened to Robert Julian-Borchak Williams earlier this year. According to NPR,

Civil rights experts say Williams is the first documented example in the U.S. of someone being wrongfully arrested based on a false hit produced by facial recognition technology. What makes Williams’ case extraordinary is that police admitted that facial recognition technology, conducted by Michigan State Police in a crime lab at the request of the Detroit Police Department, prompted the arrest, according to charging documents reviewed by NPR.

Perhaps spurred by the Williams case and the Black Lives Matter movement, last month IBM, Amazon, and Microsoft decided no longer to sell face recognition technology to police in the United States.

Do bankers have it easier than police?

It’s fortunate for the financial services industry that scary facial recognition headlines tend to focus on law enforcement. Harmon Leon, writing for Observer, quotes co-founder and CEO of Trueface Shaun Moore, who suggests that the bank’s task is easier.

“The impact of this hurdle plays more of a role when it comes to recognizing one person out of many; thousands or millions,” he stated. “Typically with account authentication, the database we scan is few or one-to-one making this a non-issue.”

American Banker was not quite so sanguine:

As consumer advocates, state authorities and national lawmakers line up in protest against facial-recognition technology, banks using it to let customers log in to mobile banking may need to brace for a fight …

Besides privacy, civil liberties, and security issues, American Banker says that the ACLU has expressed concerns about the potential to fool facial recognition software simply by holding up a photo. It’s not implausible. I reported six months ago that San Diego artificial intelligence company Kneron tested using photos to fool the software. Fortune reported:

At the self-boarding terminal in Schiphol Airport, the Netherlands’ largest airport, the Kneron team tricked the sensor with just a photo on a phone screen. The team also says it was able to gain access in this way to rail stations in China where commuters use facial recognition to pay their fare and board trains.

As for banking, Fortune continued,

… in stores in Asia—where facial recognition technology is deployed widely—the Kneron team used high quality 3-D masks to deceive AliPay and WeChat payment systems in order to make purchases.

Not to be overlooked is banks’ indirect use of facial recognition software, as anyone who has accessed an account through a newer smartphone knows.

Apple, Google, and others are not oblivious and are working to make face recognition software more, shall we say, fair-minded. Good. As I have also written in this blog, it’s essential that we build AIs—and that includes facial recognition software and algorithms—bias-free.

With the gig economy’s upsurge amid stay-at-home orders, I found it interesting to see how much has changed—and how much has not—since I originally posted this on July 20, 2018

Most marketers know a push from a pull strategy. True to its name, a push strategy pushes a product the market has yet to demand. 3M brand Post-It Notes provide a great example. People the world over had no idea how badly they needed those little yellow stickies until they found themselves at wits’ end when their free, introductory supply ran out.

A pull strategy, no less true to its name, obliges markets with already-desired, that is, “pulled-for” products. While it’s easier to fill a known demand, learning what markets want is tricky. Ask any marketer who, after rave focus group reviews, introduced a product for it only to flop.

Digital products are of a necessity a bit of both push and pull. Technology heretofore unimaginable has no choice but to go looking for a market. Take, for instance, smartphones. In 2007, Apple had little luck pushing its newfangled iPhone on a market that demanded neither a touchscreen nor a device that was big and clunky next to sleek, miniaturized phones. Users began pulling only when Apple pushed out third-party apps. “That’s when the iPhone discovered that its killer app wasn’t the phone, but a store for more apps,” wrote Brian Merchant in his book The One Device.

Digital payments began as a push strategy. People liked portable devices and convenience at the point of sale, but it was unknown if they’d go for combining the two. The growth of point-of-sale payment systems must have brought a collective sigh of relief to early backers.

The gig economy pulls apps

The gig economy is pulling payments apps in a big way. Gig economy refers to work on a limited-time, non-employee basis. This can include temp workers, independent laborers, freelancers, babysitters, Uber drivers, handypersons, and the like.  The gig economy has been around for as long as individuals have been charging for short-term work. What’s new is the way digital payments are solving the age-old problem of timely payment. 

Companies that retain or broker gig workers usually pay by check and often take 30, 60, 90, or even 120 days to do it. Such delays can cripple the independent worker. According to a Pymts.com article by Karen Webster, 84.3 percent of gig workers said they would do more gig work—indeed, more than half have day jobs they’d cheerfully give up for full-time gig work—if payment were faster.

Solutions are fast emerging in the form of specialized apps that connect gig workers with eager customers while facilitating fast payment. Uber and Lyft, prime examples of gig economy apps, collect fares and disburse them almost immediately to drivers. Airbnb similarly collects and distributes rent. Bill.com lets businesses pay freelancers via the ACH, charging the latter only 49¢ per transaction instead of the more typical three percent. Amazon recruits delivery drivers and pays them via Amazon Flex. People blessed with strong backs can earn extra bucks moving furniture thanks to Bellhops.com. Independent homecare nurses, pet sitters, and childcare providers can collect via Care.com. Solo drivers let restaurateurs add delivery to their menu using TryCaviar. (The list goes on. A Wonolo article, where I found the foregoing examples, lists 50.)

$1.4 trillion

Since individual gig transactions tend to involve smaller amounts, it might be tempting to assume the gig economy is too small to pull the current profusion of apps. But small, individual transactions add up. According to pymts.com, American gig workers are headed toward racking up a good $1.4 trillion in 2018.

That’s certainly enough to pull more than a few apps.

Once things settle down, should financial institutions let remote workers continue working from home? Many sing the praises of work-from-home, but some sing a different tune altogether.

Work-from-home is on the rise due to the COVID-19 pandemic. Reportedly, some organizations are finding they like it and might just keep it up. As a result, predictions both dire and cheerful abound as to how the post-pandemic will look.

According to research-based consulting firm Global Workplace Analytics, United States employers could stand to increase the number of from-home workers by about fifteen times:

We estimate that 56% of the U.S. workforce holds a job that is compatible (at least partially) with remote work. We know that currently, only 3.6% of the employee workforce works at home half-time or more. Gallup data from 2016 shows that 43% of the workforce works at home at least some of the time. Our prediction is that the longer people are required to work at home, the greater the adoption we will see when the dust settles. 

It’s a bandwagon on which many are keen to jump Alvin Chia raved in Huffpost that “remote work will be the wave of the future”:

By allowing workers to work remotely, and to work flexible hours as long as they meet deadlines, companies aren’t permitting laziness—they’re allowing autonomy. They’re telling the people they hired that they trust them to do their job, and to do it well. Guess what? That’s exactly what those people are going to do.

That’s lovely—in theory—but Chia may have been overly optimistic if not overly trusting. Many employers have tried a remote work force only to emerge from the experience saying “never again.”

Take Richard Laermer, founder and CEO of New York public relations firm RLM PR. He wrote the following for NBC News Think:

… I had hoped home commuting would increase productivity and accommodate a more diverse work force—arguments often used to justify the policy. But instead, my company’s experiment ended up convincing me that telecommuting hurt my employees (and my business) more than it helped … too many employees treated their work-from-home day as paid time off. They rolled their eyes when managers tried to reach them in the middle of the day. Response times slowed considerably.

While Facebook predicts that half of its workforce will work from home by 2025, IBM went down that path in 2009 and reversed course in 2017. According to an article in Forbes, the tech giant found that telecommuting exacted a cost in productivity, synergy, collaboration, communication via body language, and more. And, of course, supervision suffered. It’s hard enough at the office to know if an employee is working or surfing. It’s near impossible when the employee is home.

IBM isn’t alone. Yahoo, Aetna, Best Buy, Apple, and Google—all of them have a recent history of shying from work-from-home. In 2013, BBC News reported, “Only last week Google’s chief financial officer Patrick Pichette said when the company is asked how many people telecommute, their answer is ‘as few as possible.’” As recently as 2018, Bank of America, too, had been reducing its work-from-home program.

Yet in the current situation, the above-referenced giants have had no choice but to turn to a remote work force. The question is whether, once things have settled down, they’ll bring workers back to the office.

Financial institutions, too, have turned to work-from-home in a big way.

Forbes recently reported that JPMorgan “asked thousands of employees to work from home.” Banking Dive reported that TD Bank “is moving about 350 Canadian and 150 U.S. workers a day into remote capability and should complete the transition by the end of [April 2020].” American Banker reports, “Bank of New York Mellon has about 95% of its employees working from home.”

Yet, also according to American Banker, U.S. banks “have long worried that more remote work could increase the risk of fraud and other security problems, reduce productivity and stifle interactions with clients.” Still, right now they’re in no rush to bring employees back to the office, productivity and other concerns aside.

As states start to lift stay-at-home orders tied to the coronavirus pandemic, banks and other businesses are thinking about bringing employees back into offices. Financial services firms appear to be taking a slower approach than most. They are contemplating technologies like robotic process automation and contact tracing to help workers be productive and safe … for now, bankers are more worried about health risks, said Bhushan Sethi, joint global leader of PwC’s people and organization group.

So, have things changed since only a few years ago? Are people more likely to work harder and better, or at least as well, from home as from the office? Or will past unfortunate experiences repeat themselves?

This is not a tech question. It is a human nature question. Human nature has a history of being slow and, at times, downright reluctant to change. But who knows? New tech has greatly enhanced the connection between home and office. As usual, time will tell.