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Digital Banking & Payments Grow To Address The Family

By Robb Gaynor, Founder and Chief Product Officer, Malauzai

Robb Gaynor, Founder and Chief Product Officer, Malauzai

How cool would it be to set up a mobile banking app for your daughter so you could monitor the use of her debit card and control how she makes payments? What about making sure mom is sticking to her budget by getting duplicate alerts on all her account activity every time she makes a payment? Or possibly you need to give access to your accountant to pay bills via Digital Bill Pay, but you want to limit the accountant to paying bills under $1000.

Family Banking has taken the digital landscape by storm. All of these real-life payment scenarios happen every day, and now, finally, internet and mobile banking have caught up to satisfy this very unique way of using digital media to manage financial lives. The banking industry is learning from the giants of social media in terms of how to leverage community and digital interconnectivity to build long lasting relationships with consumers and businesses and help them make payments easier.

Family Banking and Family Manager

Why is this approach to payments coming to fruition now? Simple; consolidation of the digital platforms. Banks are increasingly bringing in a single solution to solve all of their digital needs—consumer and business, mobile and Internet, all delivered from a single infrastructure. Consumers and businesses all use the same solution. A business may be “entitled” to use certain features, such as ACH or wires, whereas a consumer would not. Fundamentally, it all sits on the same infrastructure; the consumers and businesses use the same app and behind the scenes, a powerful entitlements engine drives the show. And entitlements are the key here. We have always had entitlements, i.e. on/off switches, for all sorts of features in the business digital world. Entitlements are a lynch-pin of digital business . One employee of a business can only see certain accounts and can only make ACH credit payments up to $10,000 whereas another employee only has access to the wires module and can only pay certain partners. Entitlements. Not a new concept at all. What happened is interesting. Once entitlements were present on a single platform a simple question was asked: Can we apply this capability to consumers? Yes, you can, and the family is the perfect real-world scenario that makes this a reality. You may want to put limits on your daughter’s card or get notified when your mom uses her checking account or engage your accountant to help pay bills, and now it can all happen!

"The more people “hooked-in” to your digital world and monitoring what happens, the quicker we find fraud"

Family manager refers to a new solution allowing a consumer to set up and manage their family and how they access digital channels and make payments. In today’s interconnected society, two real situations have emerged making digital family banking and payments important: helping your children, and helping your parents. We are living through a huge transition and shift in wealth. The baby boomers spent years accumulating wealth, and now they are spending it. People are living longer and can benefit from help received from their family. As an interesting anecdote, a majority of digital banking support calls received on Thanksgiving are referred to as “dual-party” calls; calls in which the account holder is assisted in solving his or her technical challenges by a second person who is put on the phone to “interpret” for the original caller. We have all been there: Mom can’t get the computer to print, calls Tech Support and you get stuck on the phone with the rep figuring it out. This is a proof point for family banking. Family members form a very unique and important community, and digital banking needs to take advantage of these relationships. An elder consumer can set up access for his or her family members, keeping them in the loop, or, in circumstances in which the elder has delegated authority to his or her kids, the child can come into digital banking and help manage the elder’s financial life. And, it is all done in self-service mode, meaning you don’t have to call the bank to set this up. You simply log in to digital banking, access family manager (an entitlements engine by any other name) and set up profiles for family members and assign rights. Daughter can’t use the debit card at Starbucks (sorry Starbucks) and Mom generates an email sent to family members each time she uses her card to make a payment. All possible today.

How does this impact payments in general? First, and this is a requirement for all banks, you must extend entitlements to consumers to let them manage their financial and payment lives as well as help manage the financial lives of those closest to them. Payments are at the heart of this. Setting limits on payment amounts or controlling a debit card and how it can be used, these are all functions available today in best-of-breed digital solutions, and now they can be used for consumers. Second, payment volumes and fraud should be impacted. By setting up more family members, in essence you increase the overall use of digital banking and thus you have more people making payments. Volumes just might increase. But more critically, fraud should decrease. The more people “hooked-in” to your digital world and monitoring what happens, the quicker we find fraud. And in some situations, such as those in which elders might be in abusive situations, family manager ensures that the right controls are put in place and that all family members stay informed, thus increasing transparency and lowering the chances of an elder customer experiencing financial abuse.

Payments are the lifeblood of financial services with cash moving around quickly. Extending these payment services makes it easier for everyone while solving real world problems. Family banking and family payments, enabled by hooking your entitlements engine to the consumer offering, are an easy way to enter this market and start learning and experiencing the future of payments.

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