Friday Fun: Alliant Credit Union Raises Savings Rates

In this era of low rates and stingy credit approvals, it’s always nice to get a little good news from your FI. This week, Chicago’s Alliant Credit Union made the most of its 10 basis point increase in its basic saving rate. On its homepage, the drop-down navigation menus for both Bank and Invest, included a cute graphic touted the new 1.11% APY (see above).

And clicking on Learn More takes you to a page proclaiming rates “15.9x times the national average (I feel like they could just say “15x,” the extra 0.9x just makes it harder to read and is meaningless). See screenshot below.

Bottom line: If you got it, flaunt it. Have a great weekend! (and go Venus!)


P.S. Congratulation Alliant on being named “best HSA for spending” by Morningstar.

Author: Jim Bruene is Founder & Senior Advisor to Finovate as well as Principal of BUX Advisors, a financial services user-experience consultancy. 

First Look: Zelle Takes on Venmo, Square and Itself

Seventeen years ago PayPal took on Wells Fargo’s Billpoint (joint venture with eBay) and Citibank’s (C2IT) fledgling P2P payment services. It wasn’t a fair fight. With a $400 million VC war chest and an all-star exec team (Elon Musk, Peter Thiel, Max Levchin, David Sacks, Reid Hoffman and so on), the fight didn’t make it past the first round. Within a year PayPal had a stranglehold on eBay payments due to its superior UX and aggressive business model.

Now the banks are back with Zellea rebranded version of the clearXchange that has been up and running for six years. The service already has great traction. In 2016, Early Warning, the bank-owned operator (see note 1), processed 170 million transfers totaling $55 billion for the 85 million customers of their big-bank owners. That works out to exactly 2 transactions per customer annually with an average of $320 per transfer.

The value transferred is three times the size of Venmo’s $17.6 billion in volume, though the number of Venmo transactions is probably higher, perhaps considerably higher if its average transaction size is in the $15 to $20 range implying 1 billion venmos last year.

Using Zelle
Yesterday and today I used the mobile and desktop Zelle from Capital One for the first time. Other than the glitch with my mobile phone number (see note 3), which would stop many consumers from going further, setup was quick and easy. The desktop version is pretty straightforward, with a Send Money with Zelle link in the middle of the Payments menu (see screenshot below). This assumes you know what Zelle is, or you just ignore it since it comes after the key words, “Send Money.”

But the mobile UI is less intuitive. It wasn’t initially obvious how to use it because there is no Zelle or payments navigation item in the Capital One app…yet (it’s only been out since June 12). However, once you go to your checking account section, it’s one of the main navigation items at the top (see inset below).

 

I was initially surprised at what happened with my test payment. I sent a buck to my son (sorry, Paul I only had $1.12 in my account) and I was pleasantly surprised to find that my payment had been “qualified for expedited deposit” and he’d have the cash right away without the usual ACH delay.

But when my son forwarded the email he received, I was surprised to find that my Capital One payment has morphed into a branded Chase QuickPay with Zelle. There was no mention of Capital One anywhere in the message (see screenshot #1).

That makes sense now. My son has a Chase account and was already registered with Chase QuickPay. If he’d not already been registered, he would have received a Capital One branded email (see screenshot #2 below).

Why the new brand?
Zelle/clearXchange will continue to grow at a good clip if its big-bank owners stick with it. It’s already 3x the size of media darling Venmo (owned by PayPal). But I’m not sure the massive investment in creating a new payments brand is worthwhile (cut to the boardroom discussion of a 2018 Super Bowl ad).

I get that they are trying to create another Visa/Mastercard network that consumers recognize and trust. But unlike credit transactions at the POS in the 1950s and 60s, p2p payments are relatively understood by consumers and have much less need of a third-party organization to achieve the network effects. The big banks are already wired to each other and what’s needed, what clearXchange was already offering, is just a simpler UX inside each bank’s online and mobile application. Adding the Zelle name to the mix seems like a step backwards on that front.

Maybe I’m wrong and we’ll all be Zelling money to Mars in a few decades. But I’m not convinced the new brand will stand the test of time.

Bottom line: Love the service, which I expect to flourish, but confused by the branding.


#1: Email to a pre-registered Zelle recipient banking at Chase

 

#2 Email to a Zelle recipient not registered with a participating bank


Author: Jim Bruene is Founder & Senior Advisor to Finovate as well as Principal of BUX Advisors, a financial services user-experience consultancy. 


Notes:

  1. Owners of Early Warning (aka Zelle) are: Bank of America, BB&T, Capital One, JPMorgan Chase, PNC, U.S. Bank, and Wells Fargo.
  2. If I were any bank other than BofA and Capital One, I’d be crying foul over how the banks are listed in alphabetic order. On the desktop, it doesn’t matter (yet) since they are all above the fold. But on mobile, you can only see BofA and Capital One, and there is no indicator that you should scroll for more.
  3. I received a fatal error message when I tried to use my mobile number as contact to send Zelle payments (see inset) from Capital One’s mobile app. This could be something particular to my account, but from the cryptic popup message, it sounds like my phone is registered at another bank. And that would be a big concern for most customers who would fear that identity thieves are hard at work draining their accounts.
  4. Image credit

Friday Fun: AI is the Best thing Since Big Data

Note: I wanted to call this post, Frid-AI Fun, but visually, “Frid-AI” (sound it out) doesn’t really work as well as I thought it would. So we’ll just skip the “clever” headline and get right to it.


As a semi-active analyst, full-time fintech advisor, and dormant engineer, I could not be happier with the rise of the term artificial intelligence or AI as it is mostly written these days. And the term is not as new as you might think. Spielberg released a movie with the name 16 years ago (see inset). And the term is at least 62 years old, having been studied at Dartmouth in 1955/1956. But it went mainstream this century, especially the past few years (see search activity below).

It is a clever rebrand of a fairly mainstream process, the creation of computerized algorithms. It’s one of the hottest phrases in fintech history, second only to Big Data. For what it’s worth, the Internet still gives “big data” the nod ahead of “artificial intelligence,” 68 million Google results to 44 million, but I’m guessing AI pulls ahead soon. Banks are creating AI teams, fintech bloggers are using it headlines (Finovate, Financial Brand), and conference organizers are creating keynote sessions around it.

Google trends for the search term AI (16 June 2017)

Bottom line: I predict a long, long run for the phrase AI, so you might as well come to terms with it. Add it to your website, job description, or your team’s mission. You’ll be glad you did when the robot overlords come to evaluate your organizational value.

Author: Jim Bruene is Founder & Senior Advisor to Finovate as well as
Principal of BUX Advisors, a financial services user-experience consultancy. 

Feature Friday: Editing Transactions in Online/Mobile Banking

One basic feature missing from most online and mobile banking services is the ability to edit/annotate transactions. Some banks, BMO Harris for example, support transaction and/or category editing in their PFM modules. But it’s very rare to see it within basic digital banking.

One exception, is BBVA Compass’s Simple banking unit. Simple allows full editing of the transaction name, category, and goal. And users can add a memo and an attachment to individual transactions. Clicking on a transaction brings up the detail section along the right (see screenshot below). The feature is functional on the desktop, but it’s easier to use, and more robust, on a mobile phone where the built-in camera aids photo attachments. And the transaction is visually more appealing after editing on mobile (see After mobile screenshot).

Thoughts: While it’s a little harder to use than I’d like, it feels wrong to complain about UX issues at Simple, when the vast majority of FIs don’t allow any editing whatsoever. But my job is to whine, so I’ll make this suggestion. The best user experience is to edit directly within the transaction record rather than following commands over to the right. And on mobile, voice editing should be supported.

Bottom line: While Simple’s transaction editing may not quite live up to the digital banking pioneer’s name, it’s head and shoulders above the competition. And that’s no simple feat.


Transaction editing on the desktop

Step 1: Select transaction on left; if desired, change category (#1), or funding source (#2), then press “edit”

Step 2: Annotation options (1) Edit name, (2) Add memo, (3) Upload image, (4) Add location


Transaction editing on mobile

Before edits                                                             After edits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Author: Jim Bruene is Founder & Senior Advisor to Finovate as well as
Principal of BUX Advisors, a financial services user-experience consultancy. 

 

 

The Great Rewiring of Financial Services: Consumer Debt Collection

Perusing the hot financial services startups on AngelList today, I noticed Finovate alum TrueAccord (FS2015 link) in second place across more than 8,600 companies. TrueAccord’s core service, a digital-first approach to consumer debt collection, is a great example of the profound changes occurring all around us. Every transaction, every process, every customer interaction (and every job), is being rewired for the digital world.

Think about the typical non-digital collection process at large lenders and other merchants. A series of annoying calls that were both stressful for the recipient, who is often in the middle of some life crisis, and awkward for the financial institution, especially if they had an ongoing relationship with the customer outside the delinquent credit account. Both sides were easily riled, leading to combative communications that were the opposite of transparent, honest and collaborative. And really, it’s almost impossible to rationally assess repayment options on a phone call you are desperate to not have.

Compare that with the 3-step digital debt collection process (outlined below). Consumers receive a well-crafted email message inviting them to begin a dialogue to work together to solve the problem. While many recipients will avoid the emails, just as they avoid phone calls, and snail mail, those that are truly interested in resolution can review their options in the privacy of their own web browser (or phone), and select what works best for them.


Step 1: Email to delinquent customer with giant Resolve Now button

Step 2: Choose a repayment plan. Note the variety of choices with the amount “You Save” at the bottom for faster repayment.

Step 3: Make first payment via credit card or bank transfer


My take: Obviously, not everyone will respond to the kindler and gentler digital approach. Deadbeats and fraudsters are still deadbeats and fraudsters. And non-responders will continue to receive harshly worded voice messages from hardened collectors. But for the forgetful and/or the well-intended, laying out their options visually in a safe and neutral manner is a great improvement for the customer relationship, which will pay dividends over time.

Author: Jim Bruene is Founder & Senior Advisor to Finovate as well as
Principal of BUX Advisors, a financial services user-experience consultancy. 

Feature Friday: Discover’s Interactive Checking Account Comparison

discover checking comparison

Discover’s responsive page dedicated to selling its Cashback Checking is a thing of beauty from top to bottom (though we have some suggestions on a few of the finer points of the UX). We especially like the interactive comparison to the competition. Discovers starts by comparing its fees to Chase, Citi, and BofA. But the card giant makes it easy to compare against four other major brands (US Bank, Wells, Capital One and Fifth Third). Simply click on the + sign in the empty fifth column on the right and choose one of the brands from the popup (see below).

The table works on smaller screens including smartphones. But you can only compare to one other bank at a time. Users select the competitor with from a drop-down box.

Bottom line: If you clearly offer better price/value, then by all means flaunt it. While Discover makes a great case here for its Cashback Checking, it could be even better with more benefits listed (e.g., mobile deposit for one) and a tool to calculate financial savings and rewards. But overall, excellent work!


Author: Jim Bruene is Founder & Senior Advisor to Finovate as well as
Principal of BUX Advisors, a financial services UX consultancy. 

Marketing: STAR Bank Scores with March Madness Debit Card Promo

star bank home

I’m not sure whether I like current-events-themed promotions because they are effective or because they make for timely blog posts (probably the latter, but I’ll continue to believe in the former).

While it seems that banks have been dropping the ball on the year-end holidays, I was pleasantly surprised to find a bank doing a full-court press around March Madness. It’s an annual tradition of binge sports watching as the top 68 U.S. colleges play a single elimination tournament during the last 3 weeks of March.

STAR Bank ($1.6 billion in deposits) has a homepage-dominating ad for Game Time, a debit-card sweeps during march (see above). Cardholders that conduct at least 17 transactions are automatically entered to win one of five $100 statement credits. Customers can also enter the contest online, a user-friendly way to comply with U.S. sweepstakes rules (see bottom of landing page below).

Bottom line: The graphics are eye catching, the timing is perfect, and it’s easy for customers to participate. My only concern would be the size of the prize pool, which is only $500. For a month-long sweeps, there should be a bigger grand prize. How about this? A sweet sixteen earning $100 each, a final four winning $500 each and a champion taking home $1,500.


Promotion landing page (link, 16 March 2007)

star bank march madness landing

 

Author: Jim Bruene is Founder & Senior Advisor to Finovate as well as
Principal of BUX Advisors, a financial services UX consultancy. 

Where is Banking’s Prime Account?

amazon prime cardOf the 227 reports I authored at the helm of Online Banking Report, I am proudest of Building the Amazon.com of Financial Services written in mid-1998 (see notes 1, 2). The gist of it was that in the Internet era banks should broaden their offerings beyond checking, savings and loans. And importantly, that many of these opportunities did not require a banking charter. In fact, in many cases it would be better to not have one.

While many of those Amazon-like opportunities are still available today, there is also a massive new one. Amazon Prime which accounts for about $6 billion in annual revenue across 70 million subscribers. And that’s just the subscription revenue. It doesn’t include the sales lift across the Amazon marketplace. Considering that Amazon reported $2.4 billion in net income last year, just 40% of estimated Prime revenue, you can see how important it is.

So banks, where is your Prime program? Not free shipping, of course, but the ever-improving bundle of value-add services available for an annual/monthly fee. The price that your most engaged customers will pay to get the very best services you offer.

It’s a classic marketing strategy, right of Mktg 101 or maybe 201. And one that banks used themselves in the 1980s and 1990s when they created Gold, and then Platinum, credit cards chock full of so-called benefits even their product managers didn’t fully understand.

Retail banking, which has left more than $10 billion on the table by offering digital banking services free of charge, can employ this strategy with a bundle of digital services such as:

  • Extra security
  • Credit report alerts
  • Plain language security guarantees & insurance against account theft/fraud
  • Enhanced debit/credit cards
  • Free overdraft protection
  • Ultra-fast server
  • Same-hour customer service response via text/email/voice
  • VIP look-and-feel across all channels

It’s high time to turn digital banking into its own profit center. It will help you properly allocate capital to the growth channels, while investing less in those that are tanking a bit less robust.


Author: Jim Bruene is Founder & Senior Advisor to Finovate as well as
Principal of BUX Advisors, a financial services UX consultancy. 

Notes:

  1. It was that report that prompted Elon Musk to call me out of the blue one day and ask that I help him with his banking startup, X.com, which eventually morphed into PayPal. Although, stupidly I didn’t pursue the job opportunity, I did consult for him during X.com’s first year when they were still trying to buy or build a commercial bank (against all my advice).
  2. The report was updated in late 2000.

Banking Opportunity: Synced Joint Accounts

simple shared account

One thing we are looking forward to this year is the launch of Simple’s (part of BBVA) Simple Shared checking account. When the beta was announced last September (2016) and the company said it would be launching “some time in 2017.” See screenshots above.

The account promises to help users track their individual purchases, while also maintaining a shared transaction area and goal(s) that includes an Our Safe-to-Spend number across both users. Users would be able to simply transfer money to each other as well. And interestingly, it appears that any two people (and maybe more?) will be able to sync their Simple accounts together, it won’t have to be an actual legal joint account. That’s exactly how it should be.

Innovating in the Deposit Business
The deposit business is relatively straightforward. There are checking accounts, debit cards, and savings accounts (most paying a negligible amount of interest). So how does a bank differentiate itself in this absurdly low interest-rate environment? Branding, trust and location have been the traditional drivers and are still vital. And every decade or so a new technology comes along and there is some jostling along the way until everyone offers it (ATMs, VRUs, debit cards, online banking, mobile banking, etc.).

But even in a world where every FI offers the same basic product lineup, there are still ways to add value and increase market share and/or margins. Synced joint accounts, like Simple’s Shared Account. Married couples are the biggest opportunity, but there are other segments as well: Parents that need to sync with their kids. adults that need to sync with their aging parents, employers with employees, advisors with their clients, and so on.

There has been progress on this front. Many (most?) business accounts offer ways to enable third-party accountant/advisor access. Person-to-person transfers make it easy to send money to kids at college. And PFM solutions such as Mint, allow money-tracker couples to keep an eye on their spending across multiple accounts.

Bottom line: Existing solutions are often difficult to use, missing key features, and not fully integrated within big-name financial brands. Simple, which already offers a state-of-the-art checking account with Safe to Spend balance forecasting, natural-language search, and overall great UI, is expected to raise the bar considerably when Shared Accounts launches. I look forward to using it.


Author: Jim Bruene is Founder & Senior Advisor to Finovate as well as
Principal of BUX Advisors, a financial services UX consultancy.