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Written by: Robb Gaynor, CPO, Malauzai Software

Monkey Memo is an extension of Monkey Insights focusing on more in-depth discussions of a specific topic.  Just like Monkey Insights, Monkey Memo is based on “Little-Data” factoids pulled from a vast array of actual digital-channel usage data, over 10 million monthly logins covering 500,000+ active users and 400 banks and credit unions.  Monkey Memo will explore the data in a qualitative and expressive way, forming opinions and providing useful information on relevant topics in the digital banking space.

What’s really going on with card controls?  Are banks and credit unions embracing this technology and, are people using it?  Should the feature be embedded in the mobile banking app or launched as a stand-alone app, alongside mobile banking?  And, who actually offers the capability?  Does it take long to implement, is it hard, expensive etc.?  Lots of questions.

Let’s Begin with Card Management 1.0
First generation debit card management has been in the market now for more than three years. Not sure how many banks and credit unions are doing this, but alone Malauzai has over 200 financial institutions live with this feature, so other vendors must have made progress as well.  Safely, the number is probably below 500. Turn the debit card on or off, ask for an ATM limit increase or tell your bank you are leaving the country – these capabilities formed the focal point for what is called Card Management 1.0.  It was debit card focused, not credit card.  And, one additional important point:  many of these early solutions were based on direct integration to the core banking software.  Who knew that many cores supported the ability to turn an account on and/or off?  Really, this was account control, not card control.  Subtle difference, but Card Management 1.0 was based on adjusting settings at the account level, not really tied to a card.  This approach avoided the card processors and all those fancy folks like Visa and MasterCard. It was straight-forward. If the core supported account-level controls, “game-on.”  If not, “no-game.”  And usage is good.  When offered, 15% of active mobile banking users access the Card Management feature every month to do something with their card.  A smaller percentage, 3.5% of active mobile banking users, actually turn the card on and/or off.  This makes card controls one of the top 7 features of mobile banking when it is offered.  Not bad for a new, innovative feature.  Many users keep their cards in the off position until they need to use them.  Approximately 5% – 7% of cards are off at any given time.  While this number is small, it is growing.  The implications of managing card fraud are huge if cards can be left off and only turned on when needed.

On to Card Management 2.0.
First big change: Card Management 2.0 is based on integration with the card processors.  Most but not all of them have adopted the same technology to enable card controls.  The second change is expanded functionality.  Additional controls are available to restrict the type of merchant in which the card is used and the type of transaction (online, in-store, etc.)  And, a user’s location and the location of the card can be factored in using the GPS setting on the mobile device.  Lastly, cards can now be controlled by other people, so in Card Management 2.0, cards are “entitle-able.”  This is great for corporate card management programs, as now a company can set spending limits for each employee and limit where they use the card.  Parents can also use it to manage their kid’s cards or even use it to gain visibility and control over their parent’s financial decisions.

So three changes: Card Management 2.0 is based on card processors rather than the core banking system, has more cool features and offers delegated card-controls.

The Visa and MasterCard Angle
There’s one other angle in Card Management 2.0: Visa and MasterCard.  They too are offering services.  But, they do not have a 100% solution.  Their solutions DO NOT see all card activity.  You can launch on these platforms, but some percentage of card activity, albeit small, might not be caught.  So the controls work most of the time, but are not guaranteed 100% of the time.

Malauzai has been doing card controls for well over 3 years.  Our solution catches 100% of the activity.  I am not sure if a solution that delivers less than 100% visibility will work.  Really not sure.  I get it, if the transaction is run as a debit card, no signature etc., the big guys don’t see it run through their networks.  I think there are other influencing factors, like smaller merchant-card processing network providers that might fall outside what Visa and MasterCard can see.  I wish this was not true, as integrating at this higher-level, one level above the card processors, would be much easier.  It works well for credit card controls, so keep that in mind.  Credit-only could be a viable reason to do this.  If you are considering launching a Visa or MasterCard stand-alone app, make sure to track the reaction and efficacy as maybe this is not such as big deal.  We shall see.

The Stand-Alone Card Option
Now my favorite topic, stand-alone card management.  First, a disclaimer.  We can do stand-alone and we can plop the feature into the mobile banking app.  In fact, in 100% of our live banks and credit unions, it is integrated within mobile banking.  No one has asked us to do a stand-alone app for card controls, although we could do it really easily.

Stand-alone is in fact what many are now doing or considering.  The card processors are offering stand-alone apps for card management controls.  They add other things, like alerts, etc.  They are trying to make it more full featured.  I don’t think they are trying to replace mobile banking, but instead, they are building a case for this being a distinct enough feature that it can exist alone, complimenting mobile banking.  And usually, the registration process, sign on etc. are NOT integrated, so stand-alone means stand-alone channel.  Important point: the Visa and MC offerings are also stand-alone.  This idea is gaining momentum.  There are hundreds of financial institutions who have gone this route and many are live today.  Verdict is out on whether consumers will like this feature delivered in a stand-alone app.

The Stand-Alone RDC Phenomenon
But again, full disclosure, stand-alone is being pushed by the vendors and the card processors.  I would speculate that the mobile banking vendors, and there are many of them, have not caught up and built out this feature.  This is exactly what happened with Remote Check Deposit.  The stand-alone phenomenon.  And Malauzai was a “worst offender” in this trend. At its height there were about 125 stand-alone RDC apps in the App Store, we had about 50+ ourselves.  We figured this business would convert to full mobile banking, it DID NOT.  In August of 2016, there were 35% less stand-alone RDC apps standing at approximately 85.  The number decreased.  The only reason stand-alone existed was because the mobile banking vendors were behind.  The only solution is to launch stand-alone IF you can’t integrate. Once you can, you do.  Simple.  This is going to apply to the card management feature too.  I passionately believe it will end up integrated.  Stand-alone is a desperate ploy, one the banks and credit unions are forced to pursue because mobile banking vendors are behind.  Sorry for being so frank, but it’s the truth.

So What’s the Answer?
OK, conclusions.  Launch card controls within mobile banking.  If you can’t and if you can’t also change mobile banking vendors quickly, then go ahead and launch stand-alone.  Be careful with the big guys (Visa/MasterCard) as their solution might not catch all card activity, and the verdict is still out.  Track the usage of the feature and figure out what is working and not working.  Analytics will be  key.

There is  huge potential to put controls in the hands of the consumers and businesses.  But, be careful with certain features like GPS.  Sounds great but early tests are showing it burns the battery as the app must be kept active in the background, and the GPS tracking eats up battery life.  A good idea that may be slightly ahead of its time given the state of current battery technology.

All in all, Card Management. 2.0 represents a real advance in technology and hopefully subsequent usage.  Early results are in and in fact, expanded features are driving about 10% – 15% higher usage than Card Management 1.0.  Active usage of the feature is just over 17% of mobile banking users who use Card Management 2.0.  This might be driven by novelty as consumers explore the new feature, or, it might be there is more they can do, too early to tell.  Overall this is an opportunity, and it’s a good one to build engagement via the digital channel.