Small businesses need you – three ways to attract and retain your community’s businesses

Small businesses need your business as much as you need theirs. Since the advent of the modern banking system, small business owners have relied on regional and community financial institutions (RCFIs) to help them start their businesses, grow their businesses and maintain their businesses. In fact, as recently as 2013 RCFIs accounted for approximately 75% of all small business loans in the United States.

Since then, however, the ranks of RCFIs have continued to decline, mega banks have proliferated, and alternative lending sources such as Lending Tree, Quicken Loans and the Lending Club have provided entrepreneurs yet another source of funding to compete with RCFIs’ share of the small business market. And that’s to say nothing of the myriad non-traditional financial services providers offering innovative payments and digital banking solutions to small business owners.

Fortunately, in spite of the multiple forces working against RCFIs today, this fact remains: small business owners prefer to bank locally. They understand that the relationships and local insight of RCFIs is invaluable to them and their businesses, and something the mega banks and others competing for their business simply cannot provide. But in an ultra-competitive environment, with a seemingly infinite number of options available to small business owners, what can institutions like yours do to continue earning their business? Below are three best practices sure to increase your odds of winning the battle for small business market share in your community.

Invest in Technology

A no-brainer if ever there was one, right? You’d think so, but the reality is that consumers view the mega banks as technologically savvier than their RCFI counterparts because their websites, in many cases, are better; i.e., they look better, are easier to navigate and display equally well on mobile devices. So the first order of business for RCFIs looking to compete for small business clients, or any account holders for that matter, is to update their website. A fresh, modern looking website, that renders equally well on a mobile device, will significantly increase your odds of converting a website visitor into a new client.

Speaking of mobile devices, a survey conducted by ath Power Consulting found that nearly 70% of small business owners would switch banks in order to partake of better mobile banking services – 70%! Your typical small business owner isn’t generally sitting behind a desk all day; they’re hustling to generate new business, take care of existing clients and manage the day-to-day affairs of their company. Providing them a tool that enables them to deposit checks, transfer funds, authorize wire transfers and manage their cash flow while on the go is an invaluable service, one they’re more than willing to pay you for; as much as $100 a month, according to the Aite Group.

Become a Resource

Sir Francis Bacon is credited with coining the phrase, “Knowledge is power.” If ever there was a group this sentiment applied to it’s small business owners. As a RCFI you’re better positioned to provide the knowledge your local business owners need to be successful than arguably any other source they could tap. You’re privy to local housing data, commercial loan data, local zoning data, employment data and much more, all of which are extremely valuable to area entrepreneurs and small business owners. Positioning your institution as the subject matter expert on all things small business related is one of the smartest moves you can make.

As local business owners, and prospective business owners, begin utilizing the information you provide, something magical happens: trust forms. Whether the partakers of the information you provide realize it or not, you have become a trusted resource to them. A phenomena that is particularly powerful with business owners whose accounts you don’t yet hold; i.e., new business. It may take longer for some than others, but eventually they’ll think, “Wow, if this FI is willing to provide all this valuable information to me when I’m not even a client, what would they do for me if I were a client?” Become an invaluable resource to your local business community, and they’ll reward you with their business—guaranteed.

Market Your Wares

“I would’ve used my local bank for everything, if I would’ve known they offered it.” Those are the words of Chris, a small business owner who operates a mobile coffee service in Austin, TX, when asked why he doesn’t use the mobile business product his local bank provides. A sentiment all too common among small business owners. The same ath Power study cited above produced one particularly tragic finding: in 839 in-branch visits by prospective small-business customers, nearly 40% of bankers failed to mention the mobile banking services they offered. The savviest consumer in the world can’t buy something they don’t know about. To gain more business clients, you gotta tell ‘em about all the great business products and services you have to offer them, and what those products and services will do for them.

Which really isn’t difficult, and dovetails nicely into point number two about positioning yourself as the small business subject matter expert in your community. Billboards, radio, print ads and statement stuffers will likely always have a place in your marketing budget, but there are other, more effective means of getting the word out, which also happen to be less expensive and serve to position you as the invaluable resource you’re aiming to be. Examples, in no particular order, include: creating a business resource center on your website, chock full of valuable small business related info; producing a small business blog, where your in-house commercial loan officers and others can provide valuable tips and information; host workshops or seminars in-branch where small business owners, and aspiring small business owners, can learn about things like managing cash flow, accessing lines of credit and how the commercial loan process works; spread the word via Twitter, Facebook and other social media outlets; and last but not least, educate your front line folks on all the valuable products and services you have to offer small business owners.


It’s no secret in banking circles that business banking clients are a good thing. They maintain higher balances, are more willing to pay for products and services than retail account holders and the relationships you build with them result in greater lending opportunities. What doesn’t appear to be as widely known, however, is just how badly business owners need you. They need your technology, your expertise and your support. By investing in the tools they need, becoming the resource they need and making them aware of both, you will absolutely grow your business, their business and strengthen the communities you both serve in the process.

Opening the doors to more women in STEM fields

Four years ago I read Gloria Feldt’s No Excuses: 9 Ways Women Can Change the Way We Think About Power and it changed my career. It taught me about the ways in which our ancestors fought to open doors—both professionally and personally—for women in our nation and yet many of us do not take advantage of these opportunities. Yet, statistics show that today women only make up 24 percent of the STEM (science, technology, engineering, and mathematics) workforce in the U.S. I am proud to be a small representative of it, and am happy that my company continues holding open the doors that Feldt discussed.

At Q2, women compose almost half of the User Experience Design team – with numbers increasing in development, QA and C-level positions. So, I cannot help but wonder: Why aren’t more women stepping through the doors of innovative companies like Q2?

While I can’t answer this question with certainty, I would like to present reasons for businesses and employees alike to take notice.

Business Advantages in Hiring Women

1.  Improvement of complex decision-making: Diversity of all kinds increases the chances that complex decisions will be made correctly. Certainly those of us working in STEM fields face a number of complex decisions every day.

2.  Competitive talent: To remain competitive with other businesses in these fields, and for the U.S. to remain a viable member of the global economy, we must support the caliber of employees in STEM roles. An obvious and largely untapped talent pool is young women, who in 2013 were 21 percent more likely than men to graduate with a bachelor’s degree, and account for almost half of all students in MBA and MD programs.

3.  Greater innovation: Different points of view generate fresh ideas—that’s just common sense. And isn’t innovation what technology is all about? It’s worthwhile to note that few women contributed to the first design of the airbag, resulting in airbags that were well-suited to protect men’s bodies, but failed to adequately protect women and children.

4.  Stronger market strategies: It may be old news that, with their increased purchasing power, women are responsible for the majority of household buys. But this applies to technology consumption as well. A study performed by OgilvyAction showed that women significantly outpaced men in their usage of mobile apps related to health, entertainment, lifestyle, social networking and gaming. A fair representation of women in technology companies could help us identify with and better serve this growing consumer base.

5.  Profitability: Last, but certainly not least, companies with the highest representation of women in senior management delivered 53 percent higher return on equity and 42 percent higher return on sales than those with the lowest numbers of female senior managers. That kind of difference in the bottom line is difficult to ignore.

Both men and women can bring awareness to this growing need of women in the workforce, not just STEM fields. Here are ways in which you can make a difference in your industry.

How to Make a Difference

1. Share knowledge of job openings with a smart woman in your network.

2. Offer to review a friend’s resume.

3. Encourage female coworkers to attend empowering seminars with you.

4. Suggest that experienced female employees adopt younger female mentees.

5. Expose these formerly unconventional fields to your daughter, niece, or other young women in your family at early ages.

It is up to us to understand the need for women in STEM fields. Acknowledging your power to incite change in these areas could alter the future of our businesses.

What cyber security lessons were learned in 2014?

Arguably, 2014 will be remembered as a year that left its mark on the state of cyber security across the industry. From massive retail data breaches to cyber attacks waged by nation states against organizations, the widespread impacts led to unprecedented repercussions. These types of attacks can cause brand damage, increased audit scrutiny and significant loss of market share. Let’s take a closer look at what we saw in 2014.

Massive Retail Breaches

2014 was a record year for retail data breaches – at least in terms of number of records lost. Between Home Depot, Target and JP Morgan Chase, nearly every American felt the impact in some way, shape, or form. And while the large retailers occupied the mainstream headlines, a slew of small and mid-size retailers experienced similar breaches. POS (Point-of-Sale) systems became a popular target for criminals, as they obviously play a significant role in processing financial transactions. This, coupled with the increased demand for stolen credit cards, had a significant impact on the surge of malware targeting POS systems. Until merchants and manufactures get serious about securing these terminals and their networks, they will remain a rich target for cyber criminals.

Sophisticated Banking Trojans

An underground market once dominated by ZeuS, Carberp, Citadel and SpyEye has given birth to more advanced variants and copycats boasting additional functionality and capabilities. In 2013 nearly a million new banking malware variants were uncovered, which more than doubled the volume of the previous year.  Institutions amped up their security to protect against these threats, but the rise of banking malware continued into 2014 as fraudsters tried to stay one step ahead. Last year we were introduced to Kronos, Emotet, Dridex and Dyre. Although core functionality (e.g. stealing online banking credentials) still existed, these newer variants included enhancements in the form of anti-detection techniques and intelligent communication mechanisms.

Surges in Crypto-malware

Researchers observed a global surge in the occurrence of crypto-malware families such as CryptolockerCryptodefense and Cryptowall. Cryptomalware is a particularly sinister threat that encrypts data on a compromised device and then attempts to extort money from the victim in order to have the data decrypted. Across the world, we watched as crypto-malware targeted a wide range of victims, from state governments to small towns, and large corporations to the average consumer. Faced with really no other option, most victims reluctantly paid the demanded ransom, crossing their fingers and blindly trusting their data would be restored. Unfortunately, this wasn’t always the outcome.

Attacks Aimed at the Weakest Link

The threat of attack directed towards the human element of security had been predicted. Frankly, it continues to prove to be the easiest path of resistance and yields a high rate of success. Attackers are no longer “throwing the kitchen sink” in hope the victim bites at the phish. Instead, techniques evolved as social engineering efforts became more specially crafted, targeting the victim in a manner that increased the chance the victim would divulge information or perform actions that would be unlikely in ordinary circumstances. Well-planned attempts targeted the back office at financial institutions, and fraudsters impersonated legitimate customers and coerced victimized employees into approving fraudulent transactions.

2015 and Beyond

So, what does 2015 have in store? Not surprisingly, we should probably be hedging our bets towards more of the same. However, I strongly believe institutions can tip the scale of power in their favor. Security requires vigilance and accountability. The threats we face are too pervasive to allow us to believe we can prevent them all. Financial institutions must leverage the right technology solutions that not only help defend against these threats, but also provide real-time detection. Ideally, these solutions can improve our ability to not only respond, but also remediate all types of attack. Tipping the scale, we greatly improve our chances for winning this ongoing fight.

Words Have Meaning…Names, Power

The Patagonian Toothfish proved to be so popular that several years ago there was concern the species was on the verge of ecological collapse. How is it possible you’ve likely never heard of this fish, yet enough of it is sold and eaten each year to threaten its viability? The ugly creature was remarkably unpopular until it was marketed under the more attractive and exotic name, Chilean Sea Bass, by an enterprising fish wholesaler.


Everything from fish names to product and feature titles is responsible for creating powerful first impressions for consumers. Based on consumer impressions, products and features either experience widespread adoption or massive failure. Specific to financial services, here is a more concrete example: Mobile Remote Deposit Capture. If you’re a banker or commercial client, this is a great name for taking a picture of a check and depositing it remotely, versus driving to the local branch. However, if you’re a consumer, this is jargon. Taking high-value business-centric features like the remote capture of a check for deposit to consumers is a great way to create a high-value, self-service workflow. However, the packaging and naming must create logical connections and context associated with the features. Essentially, you have to create a brand around the feature for consumers to connect with and embrace.


The more complex the function, the more important it is to create an intuitive message about the what and why of a new feature. Without establishing a relatable name, value proposition and brand, consumer adoption and satisfaction of valuable workflows and features are likely to lag. Naming, branding, and complexity are key elements to consider when delivering business services to consumers in ways that delight, rather than frustrate them.


Products and services are named with the same goal in mind: to say something about the product that a lengthy explanation cannot. Easy Deposit is a tremendously popular name for Retail Mobile Remote Deposit Capture because it communicates the benefits of the feature. The emphasis is on the function (deposit) and the benefit (ease). The value proposition is built into a simple name that provides the context for use and a promise of why consumers should care.


The second key component of bringing a business-oriented service to the consumer space is to think about the complexity of the task required to achieve the result. Transfers from a locally held account to an account at another financial institution via online or mobile banking are typically fulfilled via the ACH network, but not presented this way to retail customers. Given the lack of familiarity with ACH processing, a feature called ACH payment would be confusing. Therefore, further exploration for a name that creates context for consumers is vital for success.


Beyond the naming, this feature’s adoption benefits by reducing the choices of how the transfer is made, as well as the complexity required to set it up. Rather than a model in which end users create a recipient and bind an account triplet (ABA, account number, type) for the external account, the workflow for identifying the target account is simplified and broken into multiple steps, each step with an explanation of the required data and how to obtain it. Addressing the how in this case will prove as valuable to consumer adoption as addressing the what,demonstrating the power of fusing naming conventions and technology.


Finally, in this particular example, careful consideration of the entry point for this feature, which is often the transfer menu item, should be considered. The typical distinction between an internal funds transfer and an external ACH-fulfilled transfer is likely hidden or invisible to consumer banking customers. After a self-service linking process (often involving micro deposits), the external accounts should be presented alongside the account holder’s internal accounts as options for transferring funds.


Packaging, including naming and reviewing workflows, will greatly influence how consumer banking customers will perceive the value of business features or services.  Creativity and workflow review will make the difference between success and failure.  Ensure the features and benefits are easy to discover, use, recall and share. Ultimately, a well-packaged feature may require significant effort to repackage and market, but without this effort, business features are likely to live in obscurity – like the nearly forgotten Patagonian Toothfish – rather than embraced and adopted by millions.


This article was originally printed in the September/October 2014 issue of Western Banker magazine.

Our Shared Responsibility: Q2 Honors National Cyber Security Awareness Month

Sponsored by the Department of Homeland Security, National Cyber Security Awareness Month celebrated its 11th year this October. Each year, this month serves as an opportunity for not only Security professionals, but also consumers, small and medium sized businesses, corporations, and financial institutions to spread awareness and share information about Cyber Security.

The theme of National Cyber Security Awareness Month for 2014 was “Our Shared Responsibility.” As we’re constantly connected to the internet, our risk of exposure to theft, fraud, and abuse is significant. Cyber Security attacks can affect our finances, identity, and privacy making it an important national security priority.

Throughout the month, Q2 presented a weekly series of Security presentations with the goal of educating its employees of not only the risks and threats the Security team sees on a daily basis, but also countermeasures they can use to protect themselves and the company. Topics such as how to recognize social engineering attempts, information about security threats such as Heartbleed and POODLE, and a demonstration of common hacking techniques were presented to Q2 employees to increase awareness of Cyber Security protection.

By the end of the month, the Q2 Security team recognized a notable increase in the awareness of Cyber Security amongst coworkers. Employees are actively reporting suspicious emails and seeking out the Security team for advice about personal Cyber Security. By opening a dialogue with our employees about the importance of Cyber Security, Q2 is helping to protect our customers, our employees, and our company.

Cyber Security awareness doesn’t end in October. We encourage you to make security-minded thinking a part of your day-to-day routine. Talk to your account holders and employees about Cyber Security awareness and security basics. Education and information are the first steps in combatting Cyber Security threats. If you have questions about Q2’s Cyber Security recommendations and best practices, please feel free to reach out to the Q2 Security team by contacting Jean Twaddell at

Defining Your Customer Experience Leads to Loyalty

Let’s face it, defining a superior customer experience is a tricky prospect. Everyone knows what “customer” means. The confusion arises from the word “experience.” What does that word mean in the context of providing financial services? Is it 24-hour support? Does it mean products work as advertised and your account holders are happy – or just not complaining? What exactly constitutes an “experience”?

A few years ago, Harley Manning at Forrester created a definition of “Customer Experience.” He noted an experience must come from the perspective of the customer and have three components: 1) be useful (deliver value), 2) be usable (make it easy to find and engage with the value), and 3) be enjoyable (emotionally engaging).

This is a pretty good definition, however, I would summarize superior customer experience this way: Superior customer experience occurs when a company or an institution consistently exceeds customer expectations, leaving them with a feeling of delight.

Most businesses – including financial institutions – aim to provide superior customer service. That being said, the definition of “superior” is often times defined by the company, rather than its customers. The problem is, the essence of “customer experience” is individual and emotional. The key, then, to providing this experience is to create a business that focuses on delighting each end user.

A huge factor in this endeavor is that consumer expectations of their FIs are now driven by their non-financial brand experiences with services such as Netflix and Facebook, who offer applications on any device, anywhere, at any time. Customers now expect a unified experience between their smartphone, tablet, and online banking services. This experience not only has a consistent user interface and navigation, but it is optimized for each specific device. A tablet-first design is also critical because it provides both access to the services your FI offers and enables customers to swipe, touch, and tap intuitively in an engaging way.

Beyond the “any” access strategy, becoming aware of all of the ways that an account holder comes into contact with your organization is necessary. If you are a typical financial institution, customers can walk into a branch, call you on the phone, see your ads, read about you in the newspaper, go to your website, talk about you via social media, access virtual support, open your statements and other snail mailings, talk with the CEO at Kiwanis, and more. Have you planned for a great experience to be the logical outcome of your account holder’s interactions or are you just hoping it will happen?

Make a specific organization-wide focus to change the interactions you have with your account holders at every touch point, with a focus on creating an experience, built over time. Your strongest asset is your people and they are human, so they will make mistakes. However, if you compile a storehouse of superior experiences with your account holders, one bad event will not deter from their overall emotional response. By investing in delivering a positive emotional response from your account holders – consistently delivered from every touch point – you will come closer to acquiring the one trait that you can no longer buy or generationally expect, loyalty.

Heightened FI Accountability Should Fuel Relationship Resurgence among Commercial Clients

The recent TRC Operating Co. Inc. case is only one of several creating a ripple of increased fraud awareness across businesses and their financial institutions (FIs). While it takes the vested interest of both parties to assess risk, build the fortress, and maintain safe-keeping, who’s to blame when security is compromised?

TRC’s claim of  strictly being offered a username and password – and no further security controls – ultimately resulted in a $350K settlement paid by United Security Bank. So where is the line drawn?

Businesses do not receive the same protection against cyber fraud that are afforded to consumer banking customers under Reg E. While commercial customers are typically provided enhanced security solutions, they do not receive the loss protection piece that retail account holders do – limits losses to $50, if reported within two day. As such, it’s on FIs to provide “commercially reasonable security procedures” to their business clients.

Username and password clearly do not cut the mustard as a standalone security control for commercial customers – or for that matter, any customer. Institutions are not just accountable to provide strong security options; when litigation arises, they are now being asked to prove they have attempted to offer these solutions to customers, who can then decide their own fate. This was evidenced in the recent court ruling in St. Louis that found Missouri-based title company Choice Escrow responsible for over $400K in fraud losses, after it declined [in writing] to use the security controls offered by its bank.

That being said, fraud fault does not automatically fall on FIs alone. In reality the term “commercially reasonable” when referencing security procedures is subjective. Therein the shroud of blame should be shared – and preferably prevented or squashed through tightened business/banking partnerships.

In lieu of the recent lawsuits making headlines, business owners must remain vigilant and aware of the clear and present dangers that exist, and FIs must impart themselves as the trusted advisor. To help diminish some ambiguity for business and banking partners, the UCC provides the below guidelines as to the determining factors of the “commercial reasonableness” of a security procedure:

  • What are the wishes of the customer expressed to the FI?
  • What are the circumstances of the customer known to the bank – including size, type, and frequency of payment orders normally issued by the customer to the bank?
  • What are the alternative security procedures offered to the customer?
  • What security procedures in general use by customers and receiving banks can be updated?

While “commercially reasonable” will continue to evolve with the landscape, FIs need to make the leap to a proactive security approach. Not to mention, strengthening the relationships among FIs and their commercial customers will only reinforce the barriers we’re all building against potential fraudsters.

Fighting DDoS Attacks

Addressing DDoS readiness as part of your ongoing information security program

Ever since the onslaught of distributed denial-of-service (DDos) attacks that began in late 2011, the acronym DDoS has become a household term. Once a concern only of the IT or IS departments, these attacks now have the attention of the operational functions at financial institutions. Retail banking, cash management, and back office personnel are now well aware of the damage these attacks can create, and the hysteria that can arise within their respective areas as the result of an attack.

Recently, the Federal Financial Institutions Examination Council (FFIEC) issued a joint statement notifying financial institutions of the risks associated with continued distributed denial-of-service (DDoS) attacks on public websites. The FFIEC expects financial institutions to address DDoS readiness as part of their ongoing information security program, specifically to include:

  • Monitoring of incoming traffic to public web site(s)
  • Activating incident response plans if a DDoS attack is suspected or occurring
  • Ensuring sufficient staffing for the duration of the attack, including the use of previously contracted third-party services


The joint statement issued by Federal Financial Institutions Examination Council (FFIEC) can be viewed at the link below:

Financial institutions have begun bolstering their defenses, in hopes of mitigating the damage of DDoS attacks, or preventing them altogether. However, many are too narrowly focused on increasing bandwidth, engaging third-party traffic scrubbers, and locking down vulnerable systems that could amplify the effects of an attack. Unfortunately, while these actions may be warranted, and provide some benefits, financial institutions are still missing the bigger picture.

While there is no full-proof defense against a denial of service attack, there are several ways in which community and regional FIs can effectively mitigate the risks. How? My firm belief, based on first-hand experience, is that DDoS attacks would not be as significant a concern, if not for the prevalence of account takeover fraud. Account takeover—what does that have to do with a DDoS attack? This: criminals frequently launch DDoS attacks against financial institutions as a means of covering up transactional fraud they’ve perpetrated, or are in the process of perpetrating. Their hope is that an FI will be so focused on trying to restore online banking services, that they’ll miss a fraudulent, outbound ACH, or wire transaction.

In these scenarios, DDoS attacks represent the second half of the equation when it comes to account take over (ATO) – useful when fraud has been successfully perpetrated. However, by preventing the fraud with stronger controls, financial institutions can significantly mitigate the risk of a DDoS attack being launched against them. In other words: adequately prevent the fraud, and you’ll reduce the likelihood of a DDoS attack. So, the question begs—is your FI focused on perimeter defenses and internal infrastructure, or have you taken the time to consider implementing additional security measures to protect the customer and the institution at the transactional level? Where there’s smoke there’s fire – the fraud is the fire, the DDoS attack is the smoke.

Are You Teaching Your Account Holders Anything?

One of my most profound experiences—professionally, anyway—occurred about ten years ago while visiting with my doctor. Doc was standing with his back to me, entranced in whatever it was he was fiddling with, when I said to him, “I guess it gets pretty irritating with all those pharmaceutical reps running around here all the time, huh?” It was more small-talk than visiting – I certainly didn’t expect to solicit the response I did. Doc stopped what he was doing, turned, and said, “Actually, no, it’s not irritating at all—I don’t know what I’d do without them.”

Say what!? I thought. Did I hear you correctly, Doc?

“I swear I’ve gotten dumber every day since the day I graduated from medical school, Will; if it weren’t for the drug reps, I wouldn’t know what the heck was going on.”  Needless to say, I was surprised at his response. He went on to explain that he’s so busy messing with insurance companies, paperwork, billing, seeing as many patients as possible and, oh yeah, being the CEO of his medical practice, that he doesn’t have time to keep up with the latest techniques, procedures and clinical trials—he relies on the pharmaceutical reps to keep him informed.

Not coincidentally, the reps who kept him most informed, were the reps for whom he wrote the most scripts. And that’s when it all came together for me: teaching is selling, and selling is teaching. If you’d like to get your tellers selling, get ‘em teaching. defines consult as: to give professional or expert advice; to serve as a consultant. Teach, however, is defined as: to impart knowledge or skill; give instruction to. Now, which would you rather receive: knowledge or advice? If you’re like me, the choice is obvious: knowledge! And your account holders undoubtedly feel the same way.

Studies have shown that consumers much prefer to buy things, rather than be soldthings, and they definitely don’t prefer being “advised” of what to do. It’s when your account holders have been taught something—partaken of your knowledge—that they feel empowered to make informed decisions of their own free will.

After more than fifteen years of working with community financial institutions, I’ve heard bankers repeatedly say that selling isn’t easy. Specifically, “We just can’t seem to get our tellers to sell, Will.” The problem, however, isn’t that they can’t sell—it’s that they’re not teaching. I once managed a team of relationship managers and many of them told me they were uncomfortable with “the selling part.” They felt that as relationship managers, they were violating the sacred, unspoken terms of their impartial, objective, client-advocate status. When I told the relationship managers to replace the word selling with teaching, their cross-sell numbers went through the roof.

To remedy the perceived problem with selling, instill a culture of teaching among your tellers. Educate them on the benefits of this new and improved approach—greater trust between you and your account holders; stronger relationships as a result of greater trust; and less attrition as a result of stronger relationships—and they’ll buy into it.

And know that your account holders aren’t the only ones who appreciate knowledge—your employees appreciate it just as much. Assign various folks to become subject matter experts, and then have them teach their peers.

Now is the time to get your tellers teaching. According to a 2013 study by Power Consulting, during which 839 in-person audits were performed by small business owners at 38 financial institutions (FIs) across the country, nearly 40% of FIs audited never even mentioned their FI’s business mobile offerings.

A Cisco IBSG study found that “financial education” was one of Gen ‘Y’ and Gen ‘X’s’ greatest needs; nearly 40% of both groups surveyed desired “help managing their finances.” If you’re the FI that fills that need, you may just have an account holder for life. Just remember: teaching is selling, and selling is teaching. Are you teaching your account holders anything?

Will Ferrell is Vice President of Product Marketing for Q2.  Will is responsible for shaping the messages and painting the pictures that tell the story behind Q2’s passion for strengthening communities by strengthening their financial institutions. A veteran of the virtual banking and payments industry, Will has spoken at numerous industry conferences and tradeshows, teaching anyone who will listen about the power of the virtual channel to improve lives, all the while dodging “thought leaders”.


The Perils of Information vs. Knowledge, Empowerment, February 14, 2011, Stan Lepeak, Managing Director Global Research)
— Power Consulting
— Celent

There’s Gold In Them Thar Hills…

There’s still gold in them thar hills, and the best part is, today, there’s no shovel required to mine it. What gold, you ask? The opportunity mobile business banking represents for community financial institutions. With net interest margins harder to see than Wonder Woman’s plane – it’s invisible – and regulatory and compliance expenses growing like kudzu – it can grow 7 ft. in a week – mobile business banking is an opportunity that community FIs should jump all over – ASAP! Why? Because the opportunity is huge; it will bring in new business; it will reduce attrition; and it will generate fee income. If all of that’s not a gold mine, then I don’t know what is.


Did you know that Barlow Research estimates the potential revenue from fees and deposits in the SOHO (small office/home office) segment alone at $36.2 billion? These are companies who typically have ten or fewer employees – many of whom are likely already doing their retail banking with community FIs just like you. According to a 2013 study by Power Consulting, during which 839 in-person audits were performed by small business owners at 38 FIs across the country, nearly 40% of FIs audited never even mentioned their FI’s business mobile offerings. Have you told your potential SOHO accounts about your mobile banking solution? With Power Consulting estimating 12% of SOHO accounts could convert to business clients if their FIs mentioned mobile business solutions, now is the time to promote mobile business banking.


The mobile channel – smartphones and tablets – has officially become the channel of choice for consumers, and account holders of your FI are probably no exception. In fact, in 2014 access to the Internet via mobile devices eclipsed that of the desktop. The aforementioned Power study found that of the small businesses already utilizing mobile business solutions today, 32% of them access it two-three times per week. That’s two-three times per week you’re able to engage, cross-sell, upsell, consult and nurture your most lucrative clientele via the virtual channel. The same Power study found that 66% of small business owners would be likely to switch FIs for a superior mobile offering – 66%! When you consider the average small business relationship generates 50% more revenue than an “affluent” retail customer, mobile business banking will become a major focus for strategically minded community FIs.

In a case study by the CEB Tower Group, mobile banking customers were 53% less likely to attrite than non-mobile banking customers. When combined with mobile bill payment, they were 82% less likely to attrite. If mobile means sticky and mobile business means an opportunity to acquire new, highly-profitable accounts, then the case for mobile business banking as a serious – and profitable – attrition reducer is obvious. If further support is required, then consider the PPC Group found small business owners 40% more likely to consolidate their personal and business accounts at the FI currently serving their retail needs. A mobile business solution is the heavy-duty toggle bolt of attrition reducers – the proverbial golden handcuffs.


With the Feds continuing to chip away at interchange income and overdraft protection fees – and consumers more aware of FI fees than ever before – mobile business solutions are a beacon of light on the fee income horizon. Charging fees for business banking solutions has been an acceptable practice since the first online cash management solutions arrived, and mobile business solutions are no exception. A 2013 Aite Group study found nearly 30% of businesses currently using mobile business solutions pay their FIs more than $100.00 a month; it drops to 20% for those businesses not currently utilizing mobile offerings. And across all small businesses surveyed currently utilizing mobile business solutions, almost 50% currently pay their FIs more than $50.00 a month. Time equals money, especially for busy small business owners – Who wouldn’t pay for more time?


Mobile business banking could just be the most lucrative opportunity at hand for community FIs. Besides bringing in new business, retaining current business and generating fee income, executing on a mobile business solution will dramatically alter the way your FI is perceived in the markets you serve – it will position you as a leader and strengthen your brand. The best news of all: the market is virtually untapped. As of Q4, 2013, only about 30% of FIs with less than $10 billion in assets offered a mobile business solution. With your FI focused on growth through differentiation and your account holders focused on the freedom to bank anytime, anywhere, and on any device, the time is now to develop, deploy and advertise your mobile business solutions. After all, there’s gold in them thar hills.


Enjoy the blog? Visit our site again soon to read more from our industry experts—and to continue learning about trends in small business banking, read the ath Power Consulting report, “Small Business Mobile Banking.”

Are you a good banking solution or a great one?

“Sometimes you have to leave today’s good for something great,” an account holder recently summarized about the interactions with her long-time, hometown bank. This got me thinking—from a consumer’s perspective, all the work we do can often be summed up in a single word. So, what differentiates a good banking solution from a great one? And when and how is that determination made?

This account holder’s perspective was that, while her good bank adequately delivered on the features they offered and had provided an acceptable level of service, she had no expectation for innovation—even if she never realized she wanted any. Overall, she had no complaints as she didn’t know what she didn’t know and the institution had provided a sufficiently good experience with classic banking products and delivery.

In contrast, her new, ‘great’ bank was simply more innovative than she expected. She was attracted by the bank’s technology reputation and ability to open an account online, and once she was enrolled there was no slowing down. She learned she could utilize the bank’s technology to do everything important to her, including mortgage and lending via apps and e-signatures. Though not groundbreaking in the financial services industry, this convenience and self-service experience was entirely new for her. The ability to e-sign loan documents from her phone while in a meeting or deposit a check from her kitchen table was exactly what she needed at this time in her life.

When asked what makes her relationship with her new financial institution better than the first, she remarked, “This great bank constantly innovates and releases new features that I not only adopt and use regularly, but—in some cases—have become very dependent upon, especially through my mobile devices.” “The feature just appears. It looks and feels organic, and there is no bumpy enrollment or adoption process. I love this bank and their attention to me as a technology user.” Couple that very positive emotional response with great call center service and this institution has created a self-described loyal customer who, without a branch interaction, evangelizes their great banking experience as though it were a hot new mobility app—which, in reality, it has also become.

In the business of banking, it is easy to forget about the significance of emotional connection to a brand or experience. Traditional banking functions such as checking a balance or withdrawing money from an ATM are not emotional experiences. Or are they? If someone is heading out for an evening and cannot find an ATM or must pay a fee through a non-affiliated ATM, there is negative emotion associated with the irritation of not having easy access to their cash. If banking requires an appointment or lengthy wait at a branch, away from an individual’s life, the experience can be emotionally negative before it even begins. Conversely the examples noted above transformed an individual who was simply an account holder into an excited, vested and emotionally connected cheerleader for the brand. Emotional connection is a very real part of whether your business is characterized as good, great or any of many other single word descriptors. And fortunately today, reinforcing that emotional connection through technology makes that much easier than a generation or two ago where branch location and new account opening gifts were among the only tools available to keep customer experience positive.

We’ve touched on ‘good’ versus ‘great’ from a consumer’s perspective, but how does that work from the service side of the counter? Is simply investing in new technology enough? The answer is both yes and no. Yes, a technology investment that is properly marketed and deployed can increase customer happiness with your brand and increase feature adoption in the near term, but the pendulum can swing in the other direction by investing in the wrong technology and/or deployment method. Here are some key questions to ask:

  • Does a new feature fit naturally into the digital channel or is it a third- party offering that looks “bolted on?”
  • Does the offering’s workflow feel the same through all your electronic channels?
  • Does it match the workflow the user would experience in the branch? (an easy miss as many institutions stop thinking about the downstream affect at feature rollout.)

“Future-proofing” requires investing in a strategy that allows new features to feel organic on the digital platform and to the account holders’ interactions with your brand. In a world of rising consumer expectations, spending the time up front to map an experience that feels the same wherever an account holder touches your brand is important. This can oftentimes be as simple as using the digital channels with the account holder in the branch, so workflows don’t just feel the same, butare the same. For example, using a tablet equipped with your electronic offerings to help solve an account holder’s problem in the branch keeps your servicing touch points aligned in both form and function. This continuity through every interaction subtly and repeatedly reaffirms your institution’s commitment to innovation and account holder experience.

Today’s account holders are choosing their financial institutions for their commitment to thoughtful, relevant innovation. So in the year 2014, it’s important to ask yourself: what’s your innovation reputation?

Star Parker and FI Advocacy

I attended a meeting recently where syndicated columnist Star Parker was the speaker. Star is also the founder of CURE, the Coalition of Urban Renewal and Education. Regardless of what you might think of her politics, writing and activism, Star has an amazing life story and she tells it in a captivating manner. What I found most interesting is how passionate, energetic, and plainly honest she was about her ideas. At times animated, at times forceful, and always with great conviction, Star enthralled the crowd for an hour, then stayed for another 2 hours shaking hands, taking pictures, and talking with attendees. The conclusion I drew was that we should stop searching for alternative energy sources; instead, we simply need to figure out what is powering Star Parker and tap into that to power our cities.

What’s my point in talking about Star’s performance at this event? It’s this: who is the equivalent advocate for financial services that is writing and speaking on behalf of banks and credit unions? Who is passionately sticking up for the valuable role that financial institutions play in our economy and our communities? Who is exposing the truth about online banking and payment services that are nice to look at but don’t provide fundamental protection and safeguards (such as FDIC insurance)?  When a columnist like Leonard Pitts of the Miami Herald writes a column that excoriates banks for having the temerity to charge for basic services (Valdosta Daily Times column, Tuesday Oct 11, 2011), there was no outrage. No one wrote a column challenging the basic assumption of the article—that you shouldn’t have to pay to use your own money. What Mr. Pitts and so many others get wrong is that banks DON’T charge customers to use their own money. If you have money in your pocket, you can use it as you will. What banks and credits unions do is give you access to your money, at a time and place of your choosing, so you DON’T HAVE TO CARRY IT ALL WITH YOU! It’s access to money, not the actual use of money, that incurs a charge. It’s no different than when I take a suit to the dry cleaners; it’s my suit, but I pay for the service they are providing to it. When you consider ATMs, retail point-of-sale, and online merchants, there are literally millions of places where your money is available to you on demand. There is a cost to the financial institution to provide this access, a cost that used to be offset by other fees. Most of those other fees have now been eliminated or dramatically reduced by laws and regulation.

The fact that banks and credit unions are expected to provide the accessibility to money that they do and then be criticized for charging a fair fee for their services is unlike any other good or service we purchase. Financial institutions should not be embarrassed about their fees—they should proudly advocate for the valuable services they provide.  Now, if we could only find a Star Parker-like advocate to speak on their behalf…

So How Do You Thrill a Customer? Solve Their Vexing Problem!

Today, I conducted a webinar, part two of a three part series on branch transformation. Today’s webinar was focused on how financial institutions need to change the focus of what actually occurs in the physical branch. I am advocating for a dramatic move away from the traditional transaction/new account opening focus to an engagement center. Activities that will actually draw in existing and potential customers in three distinct categories: consultative selling, education, and problem solving. Based on the feedback from the webinar, this message resonated with the FIs that signed up for the series.

Not an hour after the webinar ended, I was clearing out some emails and found this article from Bank Innovation. The story was about a new study released by Ernst and Young that revealed the results of why people make the choices they do regarding primary banking decisions. Interestingly, the three areas that EY highlighted from the study are simplicity, advice, and problem solving. I found the fact that their three key areas were so similar to what I had advocated in the webinar both validating and challenging. Validating in the sense that what I was providing in education for the attendees was in alignment with a new study right on topic. Challenging in that I still don’t see much movement in community bank and credit union C-level executives’ attitude regarding how rapidly the virtual branch is advancing and the associated impact on the branch.

I firmly believe that we live in an age where people of all ages and companies of all sizes know how powerful and liberating mobility has become. People are shopping, receiving entertainment, transacting, and interacting via mobile devices. Smartphones and tablets have enabled anyone to be able to access their financial institution at any time and place they choose with whatever device they have in their hand. How powerful! The resulting decline in branch traffic and any measurable statistic on transactions has been precipitous. Yet many bankers cling to the traditional structure and say that it is in the branch where true customer service is manufactured. And to them I say: customer service is what any one customer says it is and nothing more. Once someone has deposited a check from their mobile phone at 11:00pm on Sunday evening, can you really say that requiring them to make a trip to a branch Monday morning is better customer service?

One of the most telling statistics from the EY study had to do with satisfaction with their institution across four categories: products, channels, benefits, and problem solving. Not surprising (at least to me) was that satisfaction with problem solving ranked the highest, with 56% saying that when their FI solves vexing problems, that brings the highest level of satisfaction to account holders. See chart below:


In light of this fact, it is interesting to that so few FIs make any actual real effort to be in the problem-solving business. The model I advocate for banks to consider and possibly emulate is the Apple Store and the world-renowned Genius Bar. How hard would it be for a bank to have one? You already have a really good bar structure– you call it the teller line–just cut all that wood off the top and you’re left with a great looking long piece of marble or Corian. Put some geniuses behind there and you are in business. Once your customers and members knew that such a resource existed from your institution, they would be calling making appointments the next day. And perhaps, just as an Apple store in the mall is slammed at 11:00 on Wednesday, so your branch would experience the type of activity that befits an engagement center, drawing in virtual branch customers and prospects alike.

To get the full story, sign up for the webinars. (If you missed them, you can always ask for a replay.) But even if you don’t, I strongly urge you to revisit your strategy on branch transformation. These physical locations can become powerful engagement centers. But it won’t happen organically; you are going to have to push a new paradigm, a different attitude towards what constitutes customer service.

For more information on Q2’s Webinar Series, contact q2webinars@

Bouncing Transactions

Fraud resulting from account-takeover attacks continues to increase. And the mechanisms by which the fraud is being perpetrated continue to vary as fraudsters use creative ways to ex-filtrate stolen funds from financial institutions. While ACH and wire transfer fraud aimed at commercial account holders continues to be the most damaging and prevalent, an interesting trend has been seen emerging targeting retail customers. Fraudsters have begun to leverage external funds transfer as a new way to defraud customers—only they‘re using account linking to other FIs to “bounce” the transactions around before withdrawing.


Recently, we’ve noticed an uptick in the number of fraud cases (approximately 6 cases involving just over $170k in 2013) reported by our FIs involving fraudulent transactions created via incoming external transfers soon after new accounts have been opened. The general scenario works like this. A new account holder [fraudster] opens an account and enrolls in online banking. Shortly after enrollment, generally less than a month, the fraudster links the new account to an external account, or sometimes multiple external accounts, held at other FIs. The fraudster initiates an ACH-debit transaction, transferring funds into the newly created account. The funds are quickly withdrawn from the account in a number of ways, including ATM withdrawals, checks, or outgoing external transfers. Be on the watch for these types of activities. Examine your existing controls around funds transfer entitlements, and consider implementing additional mitigating controls, including:

  • Limit the ability of net new customers to link accounts or initiate external transfers through online banking. Consider using a minimum of at least 30 days after the initial opening of a new account with your financial institution.
  • Monitor ACH-debit activity (inbound transfers). Although it doesn’t represent the same risk as an outgoing transaction, it is still important to watch for anomalous activity.
  • Review existing entitlements and abilities current account holders have based on historical usage.

A Shift in Banking

Financial services is often considered a mature, slow-moving industry, so it’s not surprising that in 2007, very few in the financial services industry embraced a mobile banking solution. Fast forward to the past few years where small glowing squares with the words “Netflix,” “Facebook” (F for short), and Flipboard stamped on them sitting on a smartphone screen drive the mobile expectations of banking customers. I think this is great.


Initial Industry-wide skepticism about mobile banking functionality has quickly been replaced with institutional scrambling to find a solution for the growing customer demand for mobile banking. The mobile solution has quickly ceded to a mobile revolution, one that has completely changed the interaction between customers and where they put their money. It’s no longer simply about checking your account balance online; it’s about using an app on your tablet or smartphone to open your account in the first place without, if you choose, ever setting foot into your FI. Wearable computing will undoubtedly be the next big thing to impact customer expectations, and the financial services industry must grow beyond any lingering skepticism about mobile banking. Instead of the traditional ebanking structure that is siloed between voice, online, and smartphone – which is extremely difficult to both administer and maintain – it would be wise to team with a technology partner that can grow with your FI as new technologies emerge, one with an architecture that is flexible and secure.

Commentary to an article posted on Bank Innovation.