PHOENIX — Over 700 attendees. Forty-nine summit sessions. Somepacked rooms. High-level revelations by senior financialinstitution executives and high-powered vendors.

The BAI Payments Connect conference spanned two and one-halfdays at the Phoenix Convention Center this week and helped link thedots on what banking will look like, probably sooner than youthink.

Also from BAI Payments Connect:

• Underbanked, Unbanked and Fraud
• Old Fraud Targets Still NewFavorites
• Now Up: Cross-Channel Fraud
• Digital Wallet Update: Try Something,Anything
• On Mobile: Go Big or Go Home

Here are quick-cut highlights:

NFC May Be Dying

A year ago it was anointed the future king of mobile payments.Now at BAI, panelist Jim Marous, a senior vicepresident at marketing company New Control, said: “NFC [near fieldcommunication] may be a non-starter.”

“If the consumer and the merchant don't see value they won'tchange,” he explained.

And presently few phones are NFC equipped and fewer merchantsare ready to take tap-and-go smartphone payments.

“Spread your bets around the table,” urged Marous – meaningnobody knows who will be the mobile payments winners.

But the enthusiasm around NFC is evaporating.

“The whole movement is to the cloud,” said Dan Schatt, an executive at PayPal, a company that has expressedcontinuing ambivalence about NFC.

With cloud-based mobile payments the data resides in the cloud,not in an element on the phone (as with NFC). Some believe cloud tobe safer and more flexible. It definitely imposes fewerinfrastructure demands on consumers and merchants.

But it is difficult to say with real confidence that cloud isthe one. Not on a playing field that is shifting so fast.

Urged Mark Critchett, an NCRexecutive who was on the same panel, “Partner with somebody who hasa roadmap. The future of banking will be mobile.”

Next: Mobile is the Future

Mobile is the Future

Speaker after speaker hit the point home: mobile is banking'sfuture and the plain fact is that mobile is not simply anotherchannel, it's a wholly new approach to banking relationships wherethe consumer carries the bank in his/her pocket and it isaccessible 24/7.

“Sixty-five percent of Americans are open to using a mobilecentric bank account,” said Lewis Goodwin, CEO of Green Dot Bank, asubsidiary of prepaid card company Green Dot. His is amobile-focused entity, without branches. But Goodwin doesn'tbelieve that will deter consumers from signing up.

Increasing numbers of Americans no longer want to write checks.They want to pay digitally and more of them want to do that with asmartphone.

So many financial institutions miss this message. They wantmobile to piggyback off online banking – but a growing cohort ofcustomers sees mobile as the better answer.

“Mobility is growing exponentially,” said Virginia Heyburn,a Fiserv senior executive who said that some 25 million householdsin America now embrace mobile banking.

The numbers keep spiking up, year on year, and by this pointthere is no believing the trend will abate. Mobile is primed towin.

Next: Banking's Innovation Problem

Banking's Innovation Problem

Face it: financial institutions are seen as not innovative,especially around technology, a fact trumpeted by one panelist,Green Dot Bank CEO Lewis Goodwin, whocited research that showed this belief to be widespread amongconsumers.

But it was Arkady Fridman – a longtime PayPal executive who recently took a jobwith researchers Aite Group – who spoke on another panel andoffered an explanation for the sluggishness of financialinstitutions. They have an ROI problem, said Fridman.

He elaborated that FIs often insist on a particular ROI, evenfrom new initiatives that typically are one step forward, twobackwards because they are in fact charting new territory.

Non-banks – untraditional providers (read Google, possiblyApple, PayPal, Green Dot, Facebook) – “see the trend, they believethey know where things are going,” said Fridman.

Because they believe they are willing to invest and “they arenot insisting on a particular ROI,” said Fridman.

“The reality is that you are losing customers to alternativepayments companies,” said Fridman, who urged financial institutionsto carve out partnerships with the innovators. Do that or “somebodywill eat your lunch,” he said.

Next: Fraud Means Openness

Fraud Means Openness

Call this the era of new style transparency about fraud: thatwas a clear take-away from several BAI sessions where panelistsacknowledged that the more fraud is in the news, the more consumerswant to hear about it.

“We never used to talk about fraud but now we do because societywants to talk about it,” said Dianne Shovely, anexecutive with Comerica.

“Honesty is the way to go,” she added.

“We pick and choose which scams we tell our customers about,”Shovely said, mainly because nowadays there are so many. Shedoesn't want to overwhelm her customers with info they really don'tneed to know. But when scams are getting close to home, she doesn'thesitate to tell all she knows.

Added Alex Chavarria, an executive with Silicon Valley Bank, “Customersexpect us to protect their money.”

That, he stressed, is the bottom line responsibility of any FI'sfraud group.

Next: Branch Closings Pick Up Speed

Branch Closings Pick Up Speed

Estimates vary – different experts toss out differentpredictions – but a growing consensus suggests that half ofexisting financial institution branches will close in 10 years asconsumers deploy different tools (such as mobile banking) to handlethe needs they formerly satisfied by visiting a branch.

Probably the branch killer is remote deposit capture because,suddenly, the most cited reason for a branch visit can beconveniently handled with a smartphone or a scanner, per researchpresented by Novantas consultant Steve Ledford in a final day session. When deposits no longer requirea branch visit, it is RIP branches.

Novantas data say that branch traditionalists – who tend to belower income – now amount to just 25% to 40% percent ofconsumers.

The “virtually domiciled” – the e-groups who want never to setfoot in a branch – constitute 25% to 33% of consumers. This group,incidentally, is the lowest cost to serve and thus the mostprofitable for organizations that pursue them in an electronicspirit.

What's more, in branch transactions keep declining. Novantasnumbers show them down 4% to 5% in the past year.

Even sensitive tasks – such as new account openings – are losingin branch traction as more consumers do that online.

But RDC is the nail in the coffin. “Remote deposit isuntethering customers from the branch. This requires a completerethink of the sales and service model,” said Ledford.

Also from BAI Payments Connect:

• Underbanked, Unbanked and Fraud
• Old Fraud Targets Still NewFavorites
• Now Up: Cross-Channel Fraud
• Digital Wallet Update: Try Something,Anything
• On Mobile: Go Big or Go Home