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. 

Mobile Paths

mobile banking clipMobile has been an important part of banking for six or seven years, but have you recently thought through the longer-term strategic implications?

For younger customers, the relationship with their bank, like with most large tech companies, is through their phone. Young customers don’t even think about the people behind the service. As long as it’s working.

Given this reality you have two choices.

  1. Embrace the anonymous service provider model of Google, Microsoft, Facebook and most big tech companies. Go for scale, low costs, and state-of-the-art digital services. Offer robo-savings, automated chat bots, and self-service. Hire great programmers.
  2. Go in the other direction. Humanize your service by inviting customers to connect with people at your financial institution, either in person (traditional banking model, also used by Apple with its hardware) or through chat services (Amazon). Optimize around people and connections with the customer. Have new customers in for a chat, invest in social networking and custom interfaces. Hire great account reps.

It’s easier to stay anonymous. You avoid all those messy interactions with customers. But it may be harder to gain loyalty, cross sales and referrals as a no-name service provider. Another concern on the credit side, is whether that anonymity comes at a price in terms of higher loan defaults?

Building a human connection can cement customers possibly for generations, but has higher costs in terms of staffing, customer service, and brick and mortar investment.

Either way is a legitimate strategy. But you need to choose.


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


Notes:

1. Picture by 123rf.com (licensed)
2. Inspiration by Seth Godin

Mobile Monday: Starbucks Adds Floating Balance to Mobile App

starbucks mobile balanceIn a major update last week (v4.3.2, 30 Jan 2017), Starbucks added a floating balance to its mobile app main page. So instead of navigating to the pay tab within the app, users always see their card balance as soon as they launch the app. And the balance stays floating in the lower right corner no matter how far down the page you scroll.

Furthermore, clicking the green button grays out the page and brings up two options tethered to the green button (see screenshot below):

  • Order
  • Reload

It’s a small thing, but it helps users know before they get to the front of the line whether they have enough funds in their prepaid account. It is also a good shortcut to the card reload function, though I’m not sure how many users will know/remember it’s there.

Bottom line: Banks should make sure that the balance is visible on all areas of their debit card interfaces. It’s an even worse user experience to find out you don’t have the funds after you’ve ordered your meal or rung up your grocery store purchases.

starbucks mobile reload order


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

Startup Watch: Clarity Money Makes a New Run at PFM

clarity money in ios app storeWhile the term PFM is dead, the concept, employing software to watch over your finances, is more widespread than ever. It’s just called AI, spending management, or nothing at all since it’s now baked into many digital banking offerings.

However, automated spending management is still not widely used by customers because the big players don’t make it available by default, except Wells Fargo’s My Spending Report. So there is still room for new companies in this arena, especially if they invoke AI in their value proposition. And it doesn’t hurt to have celebrity business connections either.

Enter Clarity Money into the crowded field. But with Michael Dell’s brother Adam as founder, and $3.5 million in funding from VC heavyweights Soros Fund, Maveron Partners and Bessemer Venture Capital, the mobile PFM startup has attracted a slew of press mentions (NY Times, TechCrunch, Business Insider, Bank Innovations, and a dozen more). But the biggest help to the fledgling business came a few weeks ago when Apple namclaritymoney_mint aded it a “new app we love” that pushed the app from nowhere to #16 (USA app store, free Finance apps). Today it is number 56 (see above).

The mobile-only free service reminds us of BillGuard (acquired by Prosper) married to Moven, with a sprig of Mint on the side (see image posted to Clarity’s Instagram left). The value proposition is around monitoring transactions to save money on unneeded recurring services and/or bloated bills (in which the company takes a one-time commission on savings) while building a small nest egg in an integrated FDIC-insured savings account.

Bottom line: There’s much to learn from Clarity’s marketing messages, value proposition, and mobile-first build. If you don’t offer these benefits for customers, someone else will.


claritymoney value prop 1Consumer value prop

  • Save money on bills
  • Build a savings account
  • Don’t get ripped off by unauthorized or unneeded recurring charges
  • Keep your spending organizes

Business model

  • Consumer loan lead gen (e.g., a Chase credit card is shown on a screenshot)
  • Deposit spread
  • Commission on bill savings
  • Offers

Team (co-f0unders)

  • Adam Dell, CEO, brother of Michael Dell (yes, THAT Michael Dell)
  • Hossein Azari, Chief Data Scientist and formerly of Google Research
  • Matt Jacob, VP of Engineering, formerly of CommonBond

Service providers:

  • BillShark for bill savings
  • Experian for credit and transaction monitoring
  • Wells Fargo for savings accounts

Advisors:

Product roadmap

  • Investing
  • 401(k)s

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

Startup Watch: Qonto Launching European Direct Business Bank out of Paris

qonto home

When it comes to startups, it seems that consumer services get all the attention, while the enterprise plays get the revenue. Or so Qonto hopes as they target business customers for their new direct bank opening in second quarter. The Paris-based startup (with an .eu web address) is targeting business with their more intensive expense-tracking needs and promises “easy business banking,” a compelling slogan.

The startup is not technically a bank, chartered under the French payments company regulations, but it offers debit cards, current accounts, and international transfers. The only big thing missing are commercial loans, and no doubt those are on the product roadmap, once they get some traction on the expense management side.

Qonto is currently concentrating on the front-end customer experience, off loading the nuts and bolts of payments to Treezor, a French white-label payments provider. Treezor is able to provide instant MasterCard numbers to Qonto customers, with the plastic arriving within 5 days. That helps get the new business customer onboarded immediately, a great first impression.

A few Finovate alums are pursuing this market, but none in France.

The company was in the news last week with their first fundraising, snagging $1.7 million from Alven Capital and Peter Thiel’s Valar Ventures, which also invested in N26 and TransferWise.

Bottom line: Supplying businesses, even smaller ones, is a lucrative proposition. They are not as price sensitive as they appear, because few owners have the time or patience to shop for banking services. Once they settle on a provider, you have a good chance of keeping them for the life of their business, IF you can meet their needs as they grow, especially credit. And startups are uniquely positioned to appeal to small business customers, because as a small biz themselves, they understand the customer like no large bank can.

Holiday Spirit Missing at Big Banks (redux)

tex-tech-cu-xmas-2016

Happy holidays everyone! The holiday spirit is everywhere, except it seems, at the big U.S. banks. I get that budgets are busted, employees on vacation, and you don’t want to offend anyone by mentioning (or NOT mentioning) Christmas. Still, how hard would it be to throw a couple non-denominational snowflakes on top of your logo and wish everyone a happy holiday? Or better yet, how about a little bonus, like the holiday skip-payment offer similar to that featured on Texas Tech Federal Credit Union’s homepage (see above).

In our annual holiday survey of the 25 largest banks, we found only two, PNC Bank and Key, that acknowledged the year-end holidays on their homepages. And while they are just barely outside the 25 largest, Navy Federal FCU was in the holiday spirit as well.

That’s a pretty poor showing, dramatically down from the 8 to 10 participants in years past (see links below). Caveat: The historical comparison is not perfect due to timing. I was tardy this year and didn’t take my holiday tour until 27 Dec, so I may have missed some decorations that had already been stored in the banks’ virtual attics.

Previous year-end holiday posts: 2015, 2014, 2013, 2012, 2011 (big banks); 2011(credit unions/community banks); 2009 part 1, 2009 part 2, 2007, 2006, 2006, 2004.

———-

Holiday 2016 messages

PNC Bank: PNC continues to go all-in with its long-running and clever cost analysis of the items from the 12 Days of Christmas song.

pnc-12-days-2016

Key Bank: Key has also consistently added holiday bling to its website. This year, running two holiday-themed items, one for checking and the other a broad security warning.

key-xmas-2016-2

 

key-xmas-2016

Honorable mention: While just outside the top-25 in size, Navy Federal FCU showed its holiday spirit with a classy page-dominating graphic along with a nice message about lack of fees on international purchases.

navy-fcu-xmas-2016