A year ago it was anointed the future king of mobile payments. Now at BAI, panelist Jim Marous, a senior vice president at marketing company New Control, said: “NFC [near field communication] may be a non-starter.”

“If the consumer and the merchant don't see value they won't change,” he explained.

And presently few phones are NFC equipped and fewer merchants are ready to take tap-and-go smartphone payments.

“Spread your bets around the table,” urged Marous – meaning nobody knows who will be the mobile payments winners.

But the enthusiasm around NFC is evaporating.

“The whole movement is to the cloud,” said Dan Schatt, an executive at PayPal, a company that has expressed continuing ambivalence about NFC.

With cloud-based mobile payments the data resides in the cloud, not in an element on the phone (as with NFC). Some believe cloud to be safer and more flexible. It definitely imposes fewer infrastructure demands on consumers and merchants.

But it is difficult to say with real confidence that cloud is the one. Not on a playing field that is shifting so fast.

Urged Mark Critchett, an NCR executive who was on the same panel, “Partner with somebody who has a roadmap. The future of banking will be mobile.”

Next: Mobile is the Future

Mobile is the Future

Speaker after speaker hit the point home: mobile is banking's future and the plain fact is that mobile is not simply another channel, it's a wholly new approach to banking relationships where the consumer carries the bank in his/her pocket and it is accessible 24/7.

“Sixty-five percent of Americans are open to using a mobile centric bank account,” said Lewis Goodwin, CEO of Green Dot Bank, a subsidiary of prepaid card company Green Dot. His is a mobile-focused entity, without branches. But Goodwin doesn't believe that will deter consumers from signing up.

Increasing numbers of Americans no longer want to write checks. They want to pay digitally and more of them want to do that with a smartphone.

So many financial institutions miss this message. They want mobile to piggyback off online banking – but a growing cohort of customers sees mobile as the better answer.

“Mobility is growing exponentially,” said Virginia Heyburn, a Fiserv senior executive who said that some 25 million households in America now embrace mobile banking.

The numbers keep spiking up, year on year, and by this point there is no believing the trend will abate. Mobile is primed to win.

Next: Banking's Innovation Problem

Banking's Innovation Problem

Face it: financial institutions are seen as not innovative, especially around technology, a fact trumpeted by one panelist, Green Dot Bank CEO Lewis Goodwin, who cited research that showed this belief to be widespread among consumers.

But it was Arkady Fridman – a longtime PayPal executive who recently took a job with researchers Aite Group – who spoke on another panel and offered an explanation for the sluggishness of financial institutions. They have an ROI problem, said Fridman.

He elaborated that FIs often insist on a particular ROI, even from new initiatives that typically are one step forward, two backwards because they are in fact charting new territory.

Non-banks – untraditional providers (read Google, possibly Apple, PayPal, Green Dot, Facebook) – “see the trend, they believe they know where things are going,” said Fridman.

Because they believe they are willing to invest and “they are not insisting on a particular ROI,” said Fridman.

“The reality is that you are losing customers to alternative payments companies,” said Fridman, who urged financial institutions to carve out partnerships with the innovators. Do that or “somebody will eat your lunch,” he said.

Next: Fraud Means Openness

Fraud Means Openness

Call this the era of new style transparency about fraud: that was a clear take-away from several BAI sessions where panelists acknowledged that the more fraud is in the news, the more consumers want to hear about it.

“We never used to talk about fraud but now we do because society wants to talk about it,” said Dianne Shovely, an executive with Comerica.

“Honesty is the way to go,” she added.

“We pick and choose which scams we tell our customers about,” Shovely said, mainly because nowadays there are so many. She doesn't want to overwhelm her customers with info they really don't need to know. But when scams are getting close to home, she doesn't hesitate to tell all she knows.

Added Alex Chavarria, an executive with Silicon Valley Bank, “Customers expect us to protect their money.”

That, he stressed, is the bottom line responsibility of any FI's fraud group.

Next: Branch Closings Pick Up Speed

Branch Closings Pick Up Speed

Estimates vary – different experts toss out different predictions – but a growing consensus suggests that half of existing financial institution branches will close in 10 years as consumers deploy different tools (such as mobile banking) to handle the needs they formerly satisfied by visiting a branch.

Probably the branch killer is remote deposit capture because, suddenly, the most cited reason for a branch visit can be conveniently handled with a smartphone or a scanner, per research presented by Novantas consultant Steve Ledford in a final day session. When deposits no longer require a branch visit, it is RIP branches.

Novantas data say that branch traditionalists – who tend to be lower income – now amount to just 25% to 40% percent of consumers.

The “virtually domiciled” – the e-groups who want never to set foot in a branch – constitute 25% to 33% of consumers. This group, incidentally, is the lowest cost to serve and thus the most profitable for organizations that pursue them in an electronic spirit.

What's more, in branch transactions keep declining. Novantas numbers show them down 4% to 5% in the past year.

Even sensitive tasks – such as new account openings – are losing in branch traction as more consumers do that online.

But RDC is the nail in the coffin. “Remote deposit is untethering customers from the branch. This requires a complete rethink of the sales and service model,” said Ledford.

Also from BAI Payments Connect:

• Underbanked, Unbanked and Fraud
• Old Fraud Targets Still New Favorites
• Now Up: Cross-Channel Fraud
• Digital Wallet Update: Try Something, Anything
• On Mobile: Go Big or Go Home