With ongoing changes and innovations in the financial services industry, we strive to stay on the leading edge of news and trends to keep our clients informed on new opportunities and potential threats in their business.
We hope you enjoy January’s edition of Financial Services Industry News to learn about the latest news and developments across the retail banking and financial services industry.
This month’s edition includes the following topics:
- Interest Rate Overnight Averages
- General Industry: Report: Big Banks Start to Embrace Startups
JPMorgan Chase's recent partnership with On Deck Capital Inc. to create an online small business loan for its customers is the clearest sign so far that big banks are embracing up-and-coming lenders rather than competing with them.
- Technology & Innovation: Using Tech to Take the Headache Out of Mortgages
USAA has partnered with Idomoo to create videos that aim to improve the mortgage customer experience. The customized clips feature such information as the closing date, estimated escrow, and interest rate in an effort to simplify the experience for borrowers and even eliminate some of the paperwork associated with the mortgage process.
- Cards & Payments: Mobile Prepaid Startup Goes, Well, Mobile
Bee, a mobile prepaid startup, sends representatives, a truck, and tables to city streets on certain days and times to persuade consumers with smartphones to sign up for a $5.95 per month mobile prepaid account and download an app on the spot. “It's all about establishing trust."
- Consumer Lending: Five Million Homeowners Could Benefit From Refinancing
As many as five million borrowers could benefit by refinancing their mortgages, as rates have fallen below 4%, according to a new report from Black Knight Financial Services. The report indicates that 2.4 million borrowers could save $200 or more per month, and 1.9 million could save $100 to $200 per month.
- Small Business: Apple Pay Gains More Prepaid Card Support
ADP, a leading global provider of Human Capital Management (HCM) solutions, announced January 7 its ALINE Card — marketed to companies to give employees immediate access to their paychecks on a reloadable Visa or MasterCard prepaid card — has been integrated with Apple Pay.
- Investments & Wealth Management: Social Media Firms Make ETF Push
Social media firms are offering new applications that aim to attract an emerging sub-sector of young, tech-savvy millennial consumers, beginning with exchange-traded funds (ETF). Snapchat is understood to be at the front of a queue of tech firms developing Robo-Advisory technology, which enables users to click-and-invest directly into financial products via their mobile phone applications.
- Insurance: John Hancock Adds Vitality Solutions to Simplified Life
John Hancock Insurance announced that the John Hancock Vitality solution, a new approach to life insurance that rewards people for healthy living, is now available on its quick-to-issue variable universal life insurance product, Simplified Life. With the John Hancock Vitality solution, Simplified Life policyholders will have the opportunity to earn valuable rewards and discounts by taking simple steps to improve their health.
- Regulation & Security: Nonbanks to Feel Brunt of CFPB Rules in 2016
In 2016, the Consumer Financial Protection Bureau is focusing on several areas that will primarily affect the nonbank market, including debt collection, payday-type loans, and prepaid cards. “More of their focus is going to be on the nonbanks from a rulemaking point of view,” said Anthony Gibbs, a former regional director of supervision at the CFPB who is now a senior director at Alvarez & Marsal.
- Economy: Consumer Loan Delinquencies Edged Up in Third Quarter
A composite of consumer loan delinquencies compiled by the American Bankers Association (ABA) rose from 1.36% in the second quarter to 1.41% in the third quarter. The composite tracks auto loans, personal loans, mobile home loans, and several other loan types. Meanwhile, credit card delinquencies climbed from 2.52% to 2.54% over the same period.