Matt Wilcox Pro

THE GOOD news for your financial institution is that it’s fairly easy for clients to add your card to a digital wallet. 

The bad news is that it’s fairly easy to add everyone else’s card, too. Or, they can bypass your card entirely with store cards paid via store websites. I need hardly point out that every time that happens represents a lost-opportunity cost to banks.

A major contender perhaps falling in-between is Amazon’s credit card. Issued by Chase, it is at once a merchant card and a full-fledged Visa credit card. Cardholders can choose the card for their default payment option for purchases on Amazon.com—or for their default card, period. And many do, for the card packs an incentive: besides the usual one to two percent reward for use at sundry merchant locations, purchases at Amazon and recent Amazon acquisition Whole Foods Market earn three to five percent. That poses quite the threat. Between Amazon and Whole Foods, about the only purchase category for which customers need stray is gasoline. And by shopping online, they consume less of that, too.

Nonbanks galore, and not just merchants, are getting in on the plastic card act. This represents something of a reverse trend: The Motley Fool suggested that plastics may be the future for digital payments. Paypal now issues its own Mastercard credit card, and Square has introduced a Visa debit card they’re calling Cash Card. (That’s an arguably generic term. I’d be curious to see how it would hold up under a trademark challenge.)

To increase use of their own cards, banks have typically relied on increasing the cardholder base, rewards programs, and promotions à la Use your card for a chance to win a trip for two to Hawaii. These remain viable marketing tactics, but they also smell of old school at a time when consumers expect the new and exciting. Moreover, non-banks engage the same tactics.

Fortunately, there are other tactics for rising to the top of the digital wallet.

Play up security. From the onset, banks can discuss security with greater credibility than nonbanks, thanks to a perception that banks with physical facilities are more secure than other issuers. (See my post “The digital branding challenge” here.) Of course, banks had better back their claims by being truly proactive about security, and by finding ways to discuss the matter with clients that are, first, accessible and, second, that assuage rather than worry.

Mind the brand. Here I am talking about a good deal more than graphic identity, important as that is. I’ve written before about delivering a brand in digital banking by use of design, intuitive apps, more than mere functionality, and becoming versus claiming. When your brand is strong, your graphic identity conveys a value perception absent lookalike products. And—let’s be honest—lookalike describes just about every financial service.

User-friendly interface. A by-product of the digital age is the lazy consumer. For example, in 2016, the New York Times suggested that for many a Millennial, breakfast cereal is “… just too much work … Almost 40 percent of the millennials surveyed by Mintel for its 2015 report said cereal was an inconvenient breakfast choice because they had to clean up after eating it.” If rising generations find post-breakfast-cereal-cleanup daunting, do not expect them to bother figuring out a challenging digital banking app. Today, “user-friendly” means “easy to use without having to think very much.”

Make rewards programs simple. In their zeal to differentiate, some banks cook up fancy rewards programs. The problem is that consumers are accustomed to simple spend-X-get-Y programs. Most are not up to the effort required to figure out a new program. Even an arguably superior program, if such exists, must be understandable at a glance.

Collaborate. From BCG.com: 

An example of a mutually beneficial collaboration is the one between JPMorgan Chase and PayPal, which enables Chase cardholders to easily add their Chase cards to PayPal accounts, see a digital representation of a Chase card in the PayPal interface, and redeem Chase reward points in the PayPal network.

What Jim Marous said. Marous, co-publisher of The Financial Brand and owner/publisher of the Digital Banking Report detailed twelve ways to get to the top of the digital wallet in his article entitled, appropriately enough, “12 ways to get to the top of the digital wallet.” No, I’m not going to summarize it here. Instead, I highly recommend clicking the preceding link and reading the whole piece.

Digital technology has made banking more accessible to clients. But “more accessible to clients” inevitably means “more fiercely competitive than ever for bankers.” This is no time to relax.

I am the first to admit that when it comes names of commemorative months, National Cyber Security Awareness Month isn’t the sexiest. Reducing it to the initialism NCSAM makes it easier to write, but not easier to pronounce—En-see-sam? Nik-sam? Ink-sam?—and it it doesn’t help in the sexiness department, either. 

Perhaps that’s why, even though NCSAM has been around since President Obama signed it into being 14 years ago, it doesn’t generate much press beyond sundry institutional posts. 

Missed opportunity

And that’s a curious thing, considering security concerns are keeping a good deal of people from opting into and using digital banking. Letting October pass without taking advantage of NCSAM is a missed marketing—and service—opportunity for financial institutions. 

Some may hesitate to raise the topic of cyber fraud et al to avoid instilling fears where none existed. But the reality is that the fears already exist and are in fact pervasive. A Fiserv blog post earlier this summer entitled “Why It Pays to Address Consumers’ Concerns About Bill Pay Security” reported (disclosure: Fiserv is my employer):

Among consumers who haven’t used mobile banking in the past 30 days, 57 percent cite security as a concern … At 81 percent, personal data and identity theft is the most common security concern with bills, among all those who are at least somewhat concerned about security and billing. Data breaches (65 percent) [and] Internet security (39 percent) … are other top concerns.

It has become something of a given that reticence when it comes to embracing new technology skews older. Were that the problem with digital banking enrollment and use, a plausible solution (and I beg your forgiveness for saying it with such directness) might be to wait until Millennials have replaced Boomers as the older generation. But this time it turns out that Boomers aren’t necessarily the holdup. For Millennials, technology that connects a game to a TV is one thing, whereas technology that connects a handheld device to their money is quite another. To wit, the Fiserv study also found that …

… early Millennials involved in managing bills are the most likely to have security concerns. When thinking about payment security, 64 percent of those ages 18 to 26 are worried about the safety of paying bills and 49 percent say they’re worried about receiving them.

October is nearly upon us, but it’s not too late to capitalize on NCSAM. After all, like other months, it’s a whole month long. And, happily, there’s a way to put NCSAM to work for you that is a win-win, that is, benefitting clients and financial institutions, yet won’t require much investment in the way of esearch, production, and person-hours.

NCSAM as a marketing—and service—opportunity

Having individual control goes a long way toward alleviating fear. And while great respect for the dangers of online fraud is well advised, there is a good deal that clients can do to increase their control over their online security. Furnishing that information is a great service to clients, and for banks it can mean fewer future cases to resolve. It’s also a great way to make clients view a bank in a favorable light for its thoughtfulness in having provided the information.

While it may be too late to launch a full-blown campaign, other, quick-turnaround PR opportunities are within reach. It should be an easy matter to write up easy-to-implement security tips and distribute them via press releases, newsletter or e-letter articles, and email to clients.

Nor is there any need to scurry about digging up content. Many organizations have already done that for you. Cisco, for instance, offers a wealth of blogs on the subject. The National Cyber Security Alliance maintains the website StaySafeOnline.org and makes its content available for anyone’s use. Of particular help are pages such as:

• Online safety basics
• Securing key accounts and devices
• Tips regarding identity theft and fraud
• Resources pertaining to cyber bullying and harassment
• Online resources, e.g., help from social media, search engines, Internet service providers, government organizations, etc.

You might also check with your state university. The University of California has created an online National Cyber Security Awareness Month Toolkit. In my home state, the University of Utah is doing likewise. So is the University of Richmond.

While you’re at it

Besides providing safety tips, be sure to highlight the technology and programs your financial institution has in place for protecting clients. Familiarity may have rendered them banal to you, but to clients they are new, fascinating—and reassuring.

Of course you’ll need to run all material by Compliance and Legal. Just don’t let them rewrite or even edit. To do so would be to ensure impenetrable copy no client will read and that, therefore, will do no good. Ask them to explain what needs to change, and why, and then pay a real writer to do the revising. (If your Compliance officers and attorneys fancy themselves writers, as many do, steel your resolve and stick to your guns.)

The number of financial institutions that miss the chance to capitalize on NCSAM surprises me, but their lapse has its positive side. The few financial institutions that jump on this opportunity will be the ones that stand out.

Hard to believe: Google launched 20 years ago this month. By accident or design, its name is a misspelling of the number googol. If it was by accident, you have to wonder why founders Larry Page and Sergey Brin didn’t bother googling the correct spelling.

Playing trademark roulette

Not long after the Google’s appearance in 1998, google became a verb, as in, “I’m going to google that,” eventually earning itself an entry in the 2006 Merriam-Webster dictionary. Per MW, to google is “to use the Google search engine to obtain information about (someone or something) on the World Wide Web.” Yet I suspect these days googling could refer to searching by use of any search engine. If that’s so, Google’s parent company Alphabet should take heed. Product names that enter the lexicon as verbs or common nouns have a habit of losing their protected status. Google could join the ranks of no-longer protected trademarks the likes of aspirin, elevator, cellophane, and, most recently, monopoly. It’s not hard to imagine a day when you may hear something along the line of, “I googled it on Yahoo.”

As it is, Google plays a bit of Russian Roulette with its trademark. A cardinal rule of trademark protection is to keep the mark consistent, but there’s no telling what treatment of the Google mark will greet you.

Yet maybe Google has no need for concern. While google, lower-case g, is arguably a generic term, there is no ambiguity when it comes to Google, upper-case g, referring to the corporate giant. In terms of company valuation, Google is second only to Apple. As of this writing, Fortune says Google “… has a market capitalization of more than $850 billion, says it has indexed hundreds of billions of pages and is aware of over 100 trillion.”

The ubiquity of Google products after just two decades is staggering. We have Android, Chrome, Google Maps, Gmail, Google News, Google Analytics, Google Ads, Google Images, Google Translate, Google Docs, and a list of many more that seems to go on all but ad infinitum. 

About you, me, and our neighbors

Google statistics tell us a good deal about ourselves. As I write, the three most googled people of 2018 are Donald Trump, Stephen Hawking, and Stormy Daniels. Most-googled animals are dog, cat, and chicken. Most-googled athletes are LeBron James, Tiger Woods, and O.J. Simpson. (I found nothing on most-googled football teams, but I’m confident that each of the top three is the Denver Broncos.)

Google was nearly pre-empted by the United States Air Force. Back in the punch card days of 1963, research engineer Charles Borne and computer programmer Leonard Chatlin were at work on what could rightly be called a Google precursor. The current issue of Smithsonian reports:

The duo’s program was designed to work the way Google does: A user could search for any word in the files. Their database consisted of just seven memos that Bourne typed onto punched paper tapes and then converted to magnetic tape … The data lurched over telephone lines—your smartphone is more than 10,000 times faster—but after a long moment, the right answer popped up. Bourne and Chaitin had proven, for the first time, that online search was possible.

Lucky for Google and for reasons unknown, the Air Force discontinued Borne’s and Chatlin’s work. 

Curiously, notes the article, googling “inventor of search” turns up little to nothing about Borne or Chatlin. You’ll find numerous links to one Alan Emtage, who also wrote a pre-Google search engine. But Emtage was born in 1964, making it unlikely that his search engine pre-dated Borne’s and Chatlin’s 1963 creation.

Genesis and adult supervision

The seeds of Google were sown when Page and Brin met as fellow participants at Stanford University’s computer science graduate program. They began work on an idea for a search engine in 2006. At first they called their project Backrub, a reference to “its initial heavy reliance on back-links to validate the popularity of a website it was indexing,” according to OrangeWebsite. Next came the search algorithm’s moniker, PageRank, which, still in use, is a play on Larry Page’s name. 

Page and Brin were unusually capable mathematician-programmers with a killer idea that took off, but they had the savvy and humility not to mistake initial success for all the business acumen they’d need. In 2001, they recruited technologist and business leader Eric Schmidt to run the company. According to Brin, Google had grown to the point of needing “adult supervision.” 

Today, Google “… processes over 40,000 search queries every second on average … which translates to over 3.5 billion searches per day and 1.2 trillion searches per year worldwide.” That’s according to Internet Live Stats, whose Google Search Statistics page posts informative charts and a running tally and is well worth a visit. 

Two-edged sword

A meteoric rise can be a two-edged sword. Americans tend to celebrate Davids only to turn on them should they become Goliaths. Witness, for instance, Walmart’s journey from being the underdog that took on Sears to today, when many view it as an economic pariah. Predictably, Global News raised the fearful side of success with an article whose headline screams, Google’s “20th anniversary raises questions over whether the company is too powerful”:

That resounding success now has regulators and lawmakers around the world questioning whether the company has become too powerful as its ubiquitous services vacuum up sensitive information about billions of people hooked on its products.

Google’s search engine remains entrenched as the internet’s main gateway, and its digital advertising business is on pace to generate about $110 billion in revenue this year. Much of that revenue now flows through Google’s Android operating system, which powers 80 percent of the world’s smartphones. Google also runs the biggest video site in YouTube, the most popular web browser in Chrome, the top email service in Gmail and the maps that most people use to get around.

Still, a company could do a lot worse than grow to a size that makes people uneasy. Global News goes on to concede: 

Not bad for a company that started 20 years ago … with an initial investment of $100,000. Google and its sibling companies operating under the umbrella of Alphabet Inc. are now worth $800 billion.

Overall, I’d have to agree. Google has done pretty well for a 20-year-old.

IT’S NO LONGER NEWS that fake news is constantly in the news. Nor is it news that fake news purveyors have turned the term on its head, applying it to verified facts when they happen to prove inconvenient, or to attract larger audiences in order to increase advertising revenues. 

If the fake news phenomenon was ever a mere curiosity, it is no longer. Fake news had the power to send a man from Salisbury, NC, to a Washington DC pizzeria where he discharged three shots from a rifle. The good news is that no one was killed or wounded. The bad is that there’s no telling the next incident—or tragedy—that fake news may catalyze. 

Fake news isn’t limited to politics or, for that matter, restaurants. Last year the Financial Times reported that the financial-oriented SeekingAlpha.com unwittingly published an embellished if not false report that boosted ImmunoCellular Therapeutics’s stock prices. It was later revealed that ImmunoCellular had “indirectly” paid for the article. Not only that:

The article was one of at least 200 that appeared without appropriate disclosure of payment on the Seeking Alpha website between August 2011 and March 2014, according to the US Securities and Exchange Commission.

Fake news and banks

About the same time, this appeared in American Banker:

… When an Associated Press Twitter account announced to the world that the White House was under attack … [the] Dow declined by 150 points and several billion dollars of market value was wiped out in a few seconds. It turns out the AP’s Twitter account had been hacked, but the damage was done. This was not a scenario that was predicted but now it [is] one [that] firms cannot choose to ignore.

Not all fake news is deliberate or malicious. It can arise from misunderstandings. This summer UgBusiness.com reported an incident in which timing and misreporting created a false impression with regard to the stability of DFCU Bank in Uganda:

As the DFCU episode shows, this is a genuine concern; DFCU is the second largest Ugandan bank, but many people were doubting its stability at the height of the stories.

Whether by design or misunderstanding, fake news has the potential to inflict serious harm on any organization, including financial institutions. Plummeting stock values or even a run may be only as far away as the next disgruntled client or employee, or misinformed or uninformed reporter whose tweet or Facebook comment goes viral.

The problem might be lesser were the general public not so … well, human.

We humans, it seems, tend to believe what we hear. We grow up taking advice from elders and other authority figures, and it usually works to our good. Any child who has once burned a finger takes at face value “Don’t touch—hot!” and is better off for it. Moreover, if you happen to be a good person who tells the truth (except, perhaps, when asked questions like “What would you say is your greatest weakness?”), you’re prone to imagine others will be equally truthful. 

That which we hear repeatedly tends to sink in as fact. Ever heard that crime increases under a full moon? That’s easy to believe; we hear it often enough; but it isn’t so. Police officers who believe it have succumbed to hindsight bias. Likewise, someone who has heard often enough that a certain bank has problems is more likely to believe rumors about an alleged forthcoming run.

Another reason we readily believe what we hear or read is that we’re smart enough to find shortcuts. If we researched every claim, we’d never get anything done; so when something sounds reasonable or fits our worldview, we tend to accept it. 

How fact-checkers check facts

A recent issue of TIME magazine devoted four pages to fake news and what to do about it. One study, it reported, found … 

… that 6 in 10 links get retweeted without users’ reading anything besides someone else’s summation of it …

Another [study] found that false stories travel six times as fast as true ones on Twitter, apparently because lies do a better job of stimulating feelings of surprise and disgust.

The article gave considerable ink to Stanford University psychologist Stan Wineburg’s research into precautions that professional fact-checkers take to avoid being duped. I’d say the good news is that their techniques are things that any of us can do. The bad news? Most people don’t or won’t bother. 

For instance, one simple technique that professional fact checkers rely on before forwarding an article or commenting on it is that they actually read it. Yet incredibly,

… One study found that 6 in 10 links get retweeted without users’ reading anything besides someone else’s summation of it.

Other fact-checker techniques within easy reach

Again quoting TIME:

Fact-checkers … almost immediately left the site and started opening new tabs to see what the wider web had to say about the organization  …

… Fact-checkers not only zipped to additional sources, but also laid their references side by side, to better keep their bearings.

… They would scan a whole page of search results—maybe even two—before choosing a path forward … This is important, because people or organizations with an agenda can game search results by packing their sites with keywords, so that those sites rise to the top and more objective assessments get buried.

The lessons they’ve developed include such techniques and teach kids to always start with the same question: Who is behind the information?

So far, artificial intelligence hasn’t proved itself terribly useful when it comes to identifying fake news. If it ever will, which is in question, we humans in the meantime must shoulder the responsibility. Else, we increasingly face a world in which no one will know what to believe.

Popular movies like American Hustle, Dirty Rotten Scoundrels, The Sting, and Catch Me If You Can show that audiences like a good con artist story. The films even manipulate—con?—us into rooting for the bad guy, our consciences somehow assuaged by marks who deserve or at least can afford the loss.

The deserving-mark trope entertains, but in real life cons hurt people. Moreover, many of the classic cons of history have not gone, but simply changed clothes and reappeared.

Convention demands beginning with a look at the infamous Brooklyn Bridge. “I have a bridge to sell you” is no mere cliché. Many people have “purchased” the Brooklyn and other bridges, bumping up against hard reality only when forced to take down their newly constructed tollbooths. The most famous of the Brooklyn Bridge sellers was George C. Parker, who in the late 19th century targeted immigrants filled with the hopes and promises of the American dream—and took them for their life savings. 

Capone, counts, and grateful millionaires

Perhaps more audacious was “Count” Victor Lustig, whom Smithsonian magazine dubbed “America’s greatest con man.” He twice got away with alleging the Eiffel Tower was due for demolition and selling it as scrap metal to the highest bidder. In the U.S., he sold machines purported to turn paper into currency. He even conned $5,000 from none other than Al Capone.

In 1881, French peasant Thérèse Dauignac Humbert was in the right time and the right place to revive American millionaire Robert Henry Crawford from a heart attack. Two years later, Crawford thanked her by willing her a safe containing $20 million. Crawford’s nephews lost no time in contesting the will, persuading a judge to seal the safe pending litigation. With a sealed safe for evidence and its contents for collateral, high society welcomed Humbert and favored her with numerous, hefty loans. The safe was finally opened in 1902. According to Jay Robert Nash in his book Hustlers and Con Men, inside were negotiable bonds worth $1,000, an empty jewel box, and some brass buttons. There never was a Robert Henry Crawford. His “nephews” were in reality Humbert’s brothers. “A dozen Humbert creditors committed suicide the next day,” Nash wrote. As for Humbert and her brothers, they received only “short jail terms.” Echoes of the sealed safe ruse can be found today in loans made by trusting individuals reassured by promises of repayment “as soon as my next deal goes through.”

Three-Card Monte, a centuries-old and illegal scam, still goes on. You need only walk the streets of New York or other major cities to find clandestine games suckering marks.

Nigerian money scams: ridiculous for a reason 

A modern iteration of the Spanish prisoner game is found in Nigerian money scams, which NPR reported are “ridiculous for a reason”:

“It’s actually a brilliant strategy designed to save time and maximize profit by immediately identifying only the most gullible marks, according to an analysis by Cormac Herley of Microsoft Research.”

Indeed, in Herley’s abstract we find:

… tales of fabulous amounts of money and West African corruption will strike all but the most gullible as bizarre … It won’t be pursued by anyone who consults sensible family or friends, or who reads any of the advice banks and money transfer agencies make available. Those who remain are the scammers’ ideal targets.

Had you been around in 1890, you might have received a letter out-and-out offering to sell you counterfeit money, sometimes called the Green Goods game. To assure readers of quality fakes, one sender wrote …

“… it would be perfectly foolish to send out poor work, and it would not only get my customers into trouble, but would break up my business and ruin me.”

I knew someone whose family fell for a modern version of the Green Goods game—despite his experience in financial services. For cents on the dollar, they purchased allegedly stolen, dye-bombed currency. Included “at no extra charge” was a dye-removal solution. Of course neither was delivered. It hadn’t occurred to the marks to ask why the seller didn’t keep and clean the currency for himself.

Readers have doubtless heard of the Ponzi scheme, which generally uses later investors’ funds to pay high rates of return to earlier investors. Charles Ponzi didn’t invent it but made it famous. He died in 1949, but his scheme still pops up. More famous that Ponzi himself is Bernie Madoff … 

… the former non-executive chairman of the NASDAQ stock market, and the confessed operator of the largest Ponzi scheme in world history, and the largest financial fraud in U.S. history. Prosecutors estimated the size of the fraud to be $64.8 billion, based on the amounts in the accounts of Madoff’s 4,800 clients as of November 30, 2008.

Legal cons

Sadly, not all scams are illegal. Most drug stores carry preparations claiming to cure a host of maladies despite bearing the government-required disclaimer, “This product is not intended to diagnose, treat, cure, or prevent any disease.” The disclaimer is there for a reason, namely, that the preparations have not been demonstrated to do what purveyors claim. Unfortunately, that doesn’t seem to hamper sales.

Pyramid schemes—which pay enrollees for duping people into enrolling after them—are strictly illegal, yet they persist legally under innocuous-sounding names like “multi-level” or “network” marketing. They are legal because tangible products are involved. The problem is the open secret that the real money to be made is not in selling products but in enrolling more members, essentially a legal pyramid scheme. Science writer Brian Dunning has pointed out that the hope is unattainable:

Of all the thousands of network marketing plans available now or in the past, if only one of them had ever had even a single line active to only 14 levels deep, that alone would have required the participation of more human beings than exist. 

Moreover, Dunning writes,

On average, 99.95% of network marketers lose money. However, only 97.14% of Las Vegas gamblers lose money by placing everything on a single number at roulette. 

The old adage “… if it seems too good to be true …” will always apply. Sadly, whether due to being over-trusting or to an avarice-based willingness to push the boundaries of ethics and law, there will always be people who ignore the adage.