U.S. Bancorp (USB) is really trying its best to make life easy for its customers by integrating mobile solutions into its strategy.
This is something that goes quite a long way toward making the company stand out from the other financial powers that function at a similar level. In this day and age, people are simply more likely to choose the bank that offers mobile solutions for making their lives substantially easier.
Recently, the bank has released no less than three different mobile banking options for its clients. The first is its new banking app for iPad users, the second is a "co-branded credit card application" for the Android platform, and the third is its MobileMerchant payment solution. To me these types of innovations seem like an obvious way forward for banks. At least, they seem obvious in retrospect now that U.S. Bancorp marks itself as one of the banks that have taken the lead on the initiative. This is something that I think banks will have to start competing at in the very near future in order to continue being relevant players in the financial game. Customer convenience and satisfaction is a huge differentiating factor that separated the successful banks form those that are struggling. Wells Fargo (WFC) and JPMorgan Chase (JPM) are among the other banks with similar products on the market. However, I feel that U.S. Bancorp is successfully competing with these other players.
The new mobile offerings from Bancorp include the following: the Ace Rewards Visa Application that can be used by iPhone users, as well as the Augmented Reality application which allows users to find branches and ATMs on their iPhones. Recent developments show that consumers can now also use this application on their iPads. It seems like a logical move to offer the service on the iPad as well as on the iPhone, as the larger iPad screen will optimize the experience and make it substantially more pleasant for consumers to endure. In addition, the general public has demonstrated an increased interest in the tablet market. In order to make a substantial difference as a company and in order to stay ahead of the game, U.S. Bancorp has adopted the correct strategy in making iPads a device through which its apps can be used. Almost all current and prospective tablet owners would like to use their tablets for a variety of purposes which include banking.
The company has also introduced co-branded credit card applications that allow customers to receive a co-branded credit card from a store so quickly that they can use it to pay for purchases within minutes of having applied for the card in the store. Small businesses also benefit from these new innovations. Small businesses can now use the mobile services offered by U.S. Bancorp to make secure credit card payments. This is the MobileMerchant option. Clearly, the point of MobileMerchant is to increase the amount of merchant transactions that go through the bank, which in turn will increase the banks' revenue from payments. All in all, I feel that this is a good strategy. Firstly, the bank is increasing interest from potential clients by offering modern and convenient banking solutions through mobile apps. Secondly, it is directly increasing its revenue as a result of this, making the stock more valuable.
Citigroup (C) recently launched "Renminbi Letters of Credits for Importers and Exporters" making a trade services solution suite available in RMB to facilitate trade between Latin-America and China. HSBC Holdings (HBC) is still the leading presence in China, but Citigroup is most likely going to catch up fairly soon as its Transaction Services' recently developed a new Latin America Trade Desk in Asia. If the company continues with this strategy, it will soon be a meaningful player in the Chinese market. Its presence in Latin-America is even more firmly established with this new push.
Wells Fargo is a competitor that knows how to keep the public in its pocket. This is a company that is well aware that the outcome of the market depends on what the public thinks of you to a large degree. Consequently, it has focused its attentions on philanthropic activities. Most recently, Wells Fargo announced a $15 million relationship with the National Fish and Wildlife Foundation (NFWF) which marks the first step in a $100 million grant program that the company plans to implement over the next five years. This is on top of what the company already does for the environment. Wells Fargo clears has made it a priority to keep its name in good standing.
Bank of America (BAC) is one of the company's that is suffering severely due to the problems caused in the mortgage arena. As a result, it has decided to sell $10.4 billion in residential mortgages to Newcastle Investment (NCT) and Nationstar Mortgage Holdings (NSM). This is a sensible strategy as these represent noncore assets that the company can afford to lose and that are standing in its way of reaching its capitalization goals in any case. The company's competitors, including Wells Fargo, JPMorgan Chase, and Citigroup are also suffering.
JPMorgan also has other issues to deal with in addition to this. Regulators think that the bank's executives should give back the compensation that they received in light of the huge financial losses that JPMorgan has suffered, and that it is likely to continue suffering in the very near future. The company lost $2 billion due to an unsuccessful hedging strategy that it implemented and as a result of this the company, as well as the regulators responsible for keeping track of its activity, are under close scrutiny.
With some competitors sinking, U.S. Bancorp continues to keep itself in good standing. Investors should be pleased with its progress, especially in the realm of online and mobile banking activity. If the company continues down the same path, it should continue to find the same healthy results.