Contraction Does Not Equal Recession

Most Americans are now payment “omnivores,” using multiple channels to pay various bills, according to new research from Fiserv.

These options include online payments at financial institutions and company (biller) sites, paper checks sent via mail, walk-in payments, phone payments, and mobile payments made via apps or mobile Web browsers.

“Different consumers expect and value different billing and payment offerings from their service providers,” says Jardon Bouska, division president, biller solutions, for Fiserv. “By understanding these preferences, billers, service providers and financial institutions can offer a billing and payment experience that meets a wide range of consumers’ needs and demands, from traditional methods to new and growing areas such as mobile payments.”

Three of four consumers use at least two bill payment methods each month, and more than 20% of consumers change how they pay their bills from month to month for reasons including funds availability, payment due dates, and amounts owed, Fiserv’s fifth annual Billing Household Survey reports.

Additional findings include:

• Mobile: Payments initiated via a mobile device, such as through an app, still make up a relatively small percentage of bill payments overall, but they gained momentum year to year.

• Online: Eight percent of online households paid at least one monthly bill online, up from 6% in 2011. In comparison, only 3% percent of infrequent and non-Internet users (720,000 households) use mobile bill payment.

• Smartphones: Mobile bill payments among smartphone owners jumped 41% over the previous year. In addition, one of five consumers who own a tablet paid a bill through a bank or biller site using a tablet.

• Reasons: Key drivers for mobile bill payment include time savings (50%), anytime access (44%), and convenience (43%).

• Demand: When asked what mobile billing and payment capability they’re most interested in, nearly one of three respondents indicated they were very interested in viewing and paying bills from their smartphones.

(Via Credit Union Magazine)


Contraction Does Not Equal Recession

A fourth-quarter contraction in the U.S. economy is not a harbinger of recession, CUNA Chief Economist Bill Hampel tells CNN Money.

Federal government spending cuts and a drawdown of inventories by businesses caused the economy to contract for the first time in three years, according to CNN Money.

“No one I know would seriously call this an indicator of recession,” says Hampel.

Gross domestic product—the broadest gauge of U.S. economic growth—shrank at an annual rate of 0.1% last quarter, according to the Commerce Department. That constituted the first quarterly contraction since second quarter 2009, during the Great Recession.

On drag on the economy was a 22% decline in defense spending in the fourth quarter. In the GDP report, defense spending usually is a volatile number and is not likely to decrease as much this quarter, Hampel tells CNN Money.

The other drag last quarter was a drawdown of inventories. “Businesses were selling in the fourth quarter, but not replacing the stuff on the shelves,” Hampel says. “When inventories fall in one quarter, they’re really likely to rise the next quarter.”

The basic driver of the economy–consumer spending–appears to be in good shape, Hampel says, adding “the momentum in the economy is positive but not booming.”

Is Pinterest an Emerging Marketing Tool for CUs?

Although Pinterest blew into the financial industry with much hype in early 2012, it has mostly been a flop for banks. Credit unions, however, have seen success, according to The Financial Brand.

Pinterest is a pinboard photo-sharing website that allows users to create theme-based image collections around interests and hobbies. Users can browse other people’s pinboards for inspiration, “liking” photos or “repinning” images to their collections. Today Pinterest has 25 million users.

Firefighters Community Credit Union in Cleveland joined Pinterest in February 2012.

“We’re trying to stay on the cutting edge of technology in general and explore new channels,” Brooke Bates, the credit union’s digital marketing specialist, tellsNews Now. “It is a way to connect more fully with our members.”

Interest in the social site started internally at the credit union.

“Some staff were using Pinterest on a personal level before the credit union decided to use it, and we then realized other people were using it too,” Bates says. “Women are a large percentage of our membership, and 70% to 80% of Pinterest users are women. So we made connections that way because women were flocking to Pinterest.”

Rather than just promoting itself, Firefighters Community tries to illustrate its expertise in areas that Pinterest members already talk about—saving money on recipes or hobbies, she adds.

One of the credit union’s most popular Pinterest boards is called Home Equity, which provides loan information along with tips on how to save money on renovations, how to remodel to add value, and how to sell a home.

“We don’t just limit ourselves to information about the products and services we offer,” Bates says. “We offer tips such as ‘13 painting secrets the pros won’t tell you.’ We try to illustrate our financial expertise that’s relevant to members’ everyday lives.”

The credit union hasn’t tracked its return on investment in Pinterest because it isn’t a mature offering yet, she says.

“We use members’ responses to Pinterest to guide our content strategy with other channels such as Facebook,” Bates concludes. “We try to gauge how interesting content on Pinterest may guide other marketing strategies.”

Anheuser-Busch Employees’ Credit Union in St. Louis, with $1.4 billion in assets, started Pinterest last July. The past six months were good, says Pier Alsup, senior vice president of marketing and communications.

“Our success with Pinterest is headed in the right direction. We’ve increased the number of followers,” Alsup says. “Also, we’re reaching two important segments of our membership, females and young adults, both active users of Pinterest. Plus, Pinterest is image-driven so we are able to show our brand via another media channel.”

Anheuser-Busch Employees’ currently has 28 boards, with more than 750 images pinned, and 100 followers.

“We try to provide timely and diverse topics,” Alsup says. “We hired a social media specialist last year so we could be more proactive within a variety of social media spaces.”

Do Less

Business leaders face endless choices in daily decision making.

That’s why today’s most original innovators focus more on what to leave out or ignore versus what to pay attention to or include. When you remove the right elements in the right way, good things happen, according to strategy + business.

The art of subtraction–-the process of removing anything excessive, confusing, wasteful, hazardous, or hard to use—can lead to more innovative approaches and products.

Use these six rules to achieve simplicity in any innovative effort:

1. Absence creates possibility. Offering a very basic product, which has room for customization, can add to its consumer appeal and attachment.

2. Simple rules create effective experiences. A few vital agreements—often socially implicit and understandable, but open to variation and interpretation—might create more order and engagement than a rigid hierarchy.

3. Limiting information engages the imagination. Mysteries capture people’s attention. Conventional wisdom suggests that to be successful ideas must be concrete and complete, but sometimes the most engaging ideas are malleable–allowing individuals to fill in the details on their own.

4. Creativity thrives under intelligent constraints. Limits don’t kill art or creative solutions. They often spur them. Think about haiku poems (and Twitter, for that matter) or the reinvention of products because of budget limitations.

5. “Break” is the important part of breakthrough. Innovation often demands a break from convention. Even if you’re asking for a broad fix for a big problem, a small, narrow solution might be a more innovative idea.

6. Doing something isn’t always better than doing nothing.Innovation hinges on the ability to make connections between seemingly disparate things. This often demands taking a break and quieting the mind from time to time.