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PCBB Banc Investment Daily January 31, 2013
Banc Investment Daily
January 31, 2013


IBM and others are playing around with something called "phase change memory" (PCM). Unlike flash memory cards that reside in today's phones, laptop computers and other places, PCM takes technology to another level. You see, flash memory writes to a group of cells by erasing nearby cells first. That process takes time and it is one reason why PCM devices are reportedly 100 times faster than flash and last as much as 50,000 times longer. If PCM works as expected, it could be showing up in products as soon as 3Ys from now. If so, device sizes will shrink sharply, but also be able to crunch much larger volumes of data using much less energy. It all sounds pretty interesting and we wonder what the impact specifically will be on the banking industry when that happens.
In case you missed it, Facebook reported 4Q earnings and as part of the press release, the company indicated its monthly active users had reached 1.06 billion and mobile users hit 680mm. That is up 25% and 57%, year over year respectively and is strong growth indeed. This makes sense when you layer in recent research by the Fed that found when people go online; they spend nearly 25% of their time on social media sites.
For banks, this customer engagement channel continues to evolve and mobile payment services are part of that evolution. That too makes sense, when you consider that 97% of the top 250 internet retailers have a presence on at least one social networking site according to the Fed. The good news is that while things are quickly changing, there is still time to get moving in this area. In fact, research by Forrester finds using a mobile phone to pay for something at a store still represents only 4% of mobile payments in the country. The adoption rates are high though, so time is of the essence (mobile payments are growing at a 48% annual compound growth rate).
The key in the area of social and mobile for retailers and for banks is to approach the customer right where they are geographically (mobile proximity) at a specific time with something that will interest them at that moment and get them to take action. Using a combination of geographic location, knowing whether they are male or female, their age range and the language they speak are all ways to boost sales opportunities and deliver clever product placement on a one to one basis. Forget shouting 50% off or pointing to a high APY. Instead, think about getting a tap on the shoulder and a friendly voice says "Hey Bob, let's go about 50 yards up the road, park in the lot to the right, click on the phone to buy a CD and get a 20% off coupon that we can immediately use at a restaurant that banks with the same institution."
If that sounds a bit too futuristic right now, or simply too difficult for a community banker to do, have no fear because vendors are popping up left and right in the payments and social advertising arena, so plug-and-play services are heading your way light a rocket speeding along on rails.
If you were also wondering where to spend your technology dollars in this area, research also finds about 75% of all financial institutions use Facebook; 54% use Twitter and 48% use LinkedIn to share information about the bank, communicate with customers, deliver customer service and seek out new customers where they are spending time during the day.
We can't fathom the full extent of PCM and how operating 100 times faster might end up impacting social or mobile activities of people, but it will be something to watch indeed.