At first glance, LifeLock’s $42.6 million acquisition of Lemon may not seem to fit quite right.  To some it may appear that LifeLock is buying access to Lemon Wallet’s user base, but an app with 3.6 million downloads does not justify that kind of investment on its own.  As for LifeLock getting into the mobile payments game, the last thing the market needs is another also-ran.   

Fortunately, all is not as it seems because LifeLock may have actually found a way to avoid the rampant customer turnover which has been plaguing the identity protection industry. Obviously, LifeLock gets a mobile app through which they can deliver their identity protection services.  This is a present-day necessity given consumer expectations for always on, instant access, but there is a second, more substantial benefit which LifeLock obtains from the wallet’s key financial feature.  Users can upload payment card details into the wallet, so that they (and LifeLock) can subsequently monitor these accounts directly through the app. So how do these features create the kind of value that keeps customers coming back month after month?

When it comes to identity fraud, the name of the game is money, pure and simple.  Criminals commit fraud to get paid, and in order to do so they often misuse the financial accounts of unknowing victims.  Unfortunately, the identity protection industry’s foray into monitoring for financial fraud has taken a number of years and has suffered its share of setback. 

LifeLock’s settlement with Experian over fraud alerts on credit reports took the collective wind out of the industry’s sails.  Slowly but surely LifeLock has been working its way back, though the purchase of ID Analytics and a partnership with Early Warning. They have since managed to create a respectable financial account monitoring capability spanning everything from DDA accounts to payday loans, but comprehensive payment card monitoring was the missing piece of the puzzle. That piece of the puzzle was the big one.  The keystone piece you notice when you open the box and can figure out exactly where it goes. By being able to quickly detect and alert their customers of the majority of financial fraud types, LifeLock should be able to better protect their customers than they could in the past while also strengthening the relationship with their customers.  A significant portion of consumers who cancel identity protection subscriptions do so because they don’t see the value in it.  Providing conspicuous and robust financial fraud protection is exactly what is needed to create that perceived value and keep customers around for the long term. LifeLock and Lemon Wallet? 

They fit.


About Mark Schwanhausser

Mark Schwanhausser is JAVELIN’s Director of Omnichannel Financial Services. Mark strategizes how financial institutions (FIs) can track and serve customers across whatever channels they use, and provide a consistent, integrated brand and user experience. Mark helps banks and credit unions profitably enable customers to monitor and manage their money more intelligently through technology such as online banking, mobile banking, personal finance management, financial alerts, and technologies on the horizon like wearables.

Mark led the development of JAVELIN’s Financial Journey Model, which builds digital banking on a foundation of 10 time-tested personal finance principles, and JAVELIN’s holistic segmentation, which enables FIs to prioritize their investments to serve the critical needs of the profitable Moneyhawks™, high-value Traditionalists, and up-and-coming Emergents. His other work in 2015 has focused on how banks and billers can turn off paper statements by closing the “digital commitment gap,” why digital account opening has reached a tipping point, and how FIs can use alerts and notifications to initiate daily “conversations” with customers.

Before joining JAVELIN in April 2008, Mark worked for nearly 26 years at the San Jose Mercury News, mostly as a personal finance reporter writing about money and emerging trends in financial services and payments technology.

Mark has a bachelor’s degree in journalism from the University of Missouri at Columbia and attended Antioch College.

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