Paper checks seem to be following fax machines into obscurity. As more and more personal finance applications migrate to mobile phones, will plastic payment cards be far behind?
That is one prediction from James Van Dyke, the founder of Javelin Strategy & Research, a leading provider of quantitative research focused exclusively on financial services topics.
"The mobile phone is rapidly becoming like the remote control for bank accounts and payment cards," Van Dyke observes. "Consumers can use their phones to get electronic alerts on their finances or send money to others' bank accounts. In the future this could mean leaving your purse or wallet at home and just bringing your phone. The debit card could become an artifact of the past." To underline his point, he adds, "Just think of the last time you wrote a check."
A cell phone might take more pocket space than a plastic card, but Van Dyke brings up another appealing feature that is also a hot topic in the financial services industry. "A mobile device deployed correctly has security advantages over a debit card." With the annual toll of identity fraud in the United States now up to $54 billion, security is getting a lot of attention. "The good news is consumers are getting more aggressive in monitoring, detecting, and preventing fraud with the help of technology and partnerships with financial institutions, government agencies, and resolution services," he says. Other ways to protect against risk that Van Dyke mentions include changing online account passwords frequently and discontinuing the receipt of paper bank statements through the U.S. mail.
Still, the issues of electronic financial management are very complex, especially as social media seek involvement in the process. "It's very difficult for banks, payment companies, and mobile phone providers to accurately predict how the consumer will adopt these new technologies," Van Dyke notes. "They also need to figure out how to maintain and improve profitability with consumers managing their money on mobile devices."
Javelin's role is to provide its clients, primarily banks and banking industry technology providers, with the hard facts they need, and then work with them to interpret the data. "This is a huge topic of study. We don't have all the answers-no one does-but when we have a position on something, we speak not from opinion but from quantitative data gathered over many years," says Van Dyke, emphasizing, "We think we have the best quantitative database available. Where others have opinions, we provide rigorous data."
Javelin's continued growth attests to how well it is fulfilling its mission. The firm is outgrowing the 4,500 square feet it occupies at 4301 Hacienda Drive, even though many recently hired team members work off-site, both in the U.S. and abroad in Paris, Singapore, Latin America, and India.
"Our rigorous market research means we draw from a fairly specialized labor pool," he remarks. "It is very challenging to find people who know electronic consumer financial services, mobile trends, and statistically based research and analysis methods, so we have to go far and wide to add to our team."
He does see the international dimension taking on additional importance. "Financial services are much more global than they used to be," comments Van Dyke. "Our remote staff reflects our increased capabilities in the area of advanced quantitative market research using rigorous methodologies." For more information, visit www.javelinstrategy.com .
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