Money Talk: Survey Shows Mobile Banking Gaining On Online Banking

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SURVEY SHOWS MOBILE BANKING GAINING ON ONLINE BANKING
Online banking is still America’s most popular banking method, but mobile banking continues to grow, according to a recent survey by the American Bankers Association. Mobile banking is now preferred by 12% of consumers—up from 3% just five years ago.

The annual survey of 1,000 U.S. adults was conducted for ABA by Ipsos Public Affairs, an independent market research firm, July 8-13, 2015. This is the seventh year in a row that customers have named the Internet as their favorite outlet for conducting their banking business.

Nearly one-third of respondents (32%) said it is the method they use most often to manage their bank accounts, up slightly from 31% in 2014. The number of people who preferred visiting a branch fell 4 points to 17%, but branch banking remained the second most popular way to bank. Mobile banking nearly eclipsed ATMs, which fell slightly to 13%.

Nessa Feddis, ABA’s senior vice president and deputy chief counsel for consumer protection and payments, said she expects mobile banking’s popularity to continue its gradual climb. To read more survey results, click here.

TECHNOLOGY, DRIVERLESS CARS COULD KILL AUTO INSURANCE BUSINESS
Several business and news publications have raised the question of how technology may impact the insurance industry after Meyer Shields, an analyst with consulting group Keefe Bruyette & Woods, was widely quoted as saying that advances in next-generation, safe car tools “are likely to actually eviscerate the personal auto insurance industry.”

In the past two weeks, USA Today, The Chicago Tribune, and Bloomberg News have published articles on how the industry is changing with the advent of connected and driverless cars that may one day eliminate the need for auto insurance altogether.

Industry trade publication Insurance Business America cleverly tackles the subject on Aug. 11 with the lead: “Get ready to say goodbye to Flo.”

Check out Talk Business & Politics’ story in June on some of the emerging technology with the “Connected Car.”

U.S. HOUSEHOLD DEBT FLAT IN 2Q, AUTO LOANS HIT TEN-YEAR HIGH
Household debt balances were largely flat in the second quarter of this year, according to the Federal Reserve Bank of New York’s Household Debt and Credit Report.

Total indebtedness increased just $2 billion from Q1 2015. Foreclosures hit their lowest point in the 16-year history of the New York Fed’s Consumer Credit Panel, a nationally representative sample drawn from anonymous Equifax credit data.

Auto loan originations reached a 10-year high in the second quarter at $119 billion, supporting a $38 billion increase in the aggregate auto loan balance, which has now passed $1 trillion. The increase in auto loans also drove most of the $67 billion increase in non-housing debt balances. Credit card balances increased, by $19 billion, to $703 billion, while student loan balances remained flat. Mortgage balances and HELOC dropped by $55 billion and $11 billion, respectively.

There were $466 billion in new mortgage originations in the second quarter. Two new charts introduced in this quarter’s report show that just under half of the Q2 strength in originations were driven by borrowers with credit scores over 780. By contrast, only 8% ($38 billion) of all new mortgages were originated by borrowers with credit scores below 660.

GOLDMAN SACHS ACQUIRE’S GE CAPITAL’S ONLINE DEPOSIT BUSINESS
Wall Street investment banking giant Goldman Sachs Bank USA announced last week that it has agreed to a deal to acquire GE Capital Bank GECB’s online deposit platform. The deal includes assuming GECB’s approximately $8 billion in online deposit accounts and another $8 billion in brokered certificates of deposit.

Goldman Sachs said it will acquire no other financial assets in the deal other than cash associated with the deposit liabilities, which are expected to total approximately $16 billion of deposits at closing.

As part of the transaction, Goldman Sachs will extend offers of employment to substantially all of GE’s employees dedicated to supporting the online deposit platform. Closing of the transaction is subject to regulatory approval, officials said.

BIERNAT JOINS STEPHENS’ PUBLIC FINANCE DIVISION
Little Rock investment bank Stephens Inc. recently hired Leigh Ann Biernat as senior vice president in the firm’s Public Finance Division. Biernat brings 20 years of experience as a CPA working primarily for state and local government entities, having most recently served as senior V.P. of .of finance and administration for the Little Rock Advertising and Promotion Commission. She also spent 14 years with the Arkansas Development Finance Authority in the same role.

“Leigh Ann brings a wealth of experience in all facets of municipal finance, bond issuance and underwriting, legislation, compliance and regulations. Many of our clients in Central Arkansas and our staff know Leigh Ann, and we are thrilled to welcome her to our team,” said Dennis Hunt, executive vice president and manager of public finance for the Arkansas investment banking giant.