Author: Jim Bruene

Intersections Identity Guard Offering Six Months of Free Credit Report Monitoring

By Jim Bruene Posted on
Categories: Identity Theft, Intersections, Security & Privacy

Link to Identity Guard website Intersections, with 4.7 million subscribers (as of March 30, 2007), is a leader in the U.S. credit monitoring business. Its private-label programs are offered by Bank of America, Capital One, Discover, Citibank and many more leading financial institutions. I have personally used the Intersections service for nearly a decade through its distribution agreement with American Express, a partnership which ended last year.

Last year, Intersections redesigned its core consumer-direct website, Identity Guard, to feature four levels of protection (see screenshot below):

  1. Good Start (single-bureau monitoring only): Free for six months, then $4.99/mo
  2. Watchful Eye (above plus Internet fraud database scanning and quarterly credit report and score): $7.99/mo or $69/yr
  3. Extra Caution (same as above, but expanded to all three credit bureaus plus $20,000 id theft insurance): $12.99/mo or $119/yr
  4. Total Protection (above plus constant scanning of public record databases): $17.99/mo or $159/yr

Analysis
The free six-months of service is a great way to get customers accustomed to using a daily monitoring service. However, the company does themselves a disservice by completely ignoring the obvious customer question: What happens after six months? As far as I could tell there is no way to get an answer to that question without calling or emailing prior to starting the application (see note 1). That's unacceptable for any eCommerce application, but especially in credit monitoring, which has had its share of questionable marketing practices.

We'll look at the Identity Guard application process and products in detail in our upcoming new report, Online Banking Report: The Market for Fraud Protection, Identity Theft, and Credit Monitoring Services (available at the end of July here).

Identity Guard homepage showing four product choices

Note:

1. My first email about the potential fee has not been answered or confirmed 48 hours later. But my call to customer service this morning was answered promptly, I was speaking with someone in about 50 seconds from dialing. He was a little unsure of the fee, saying "I believe it's $5.95/mo" and he "thought" that yes, you would be charged automatically to a card entered at signup. But overall, he did a decent job answering my question and surprisingly did not try to get me to signup even though I was obviously hesitant.  

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Smart Car: The Next Must-Have Banking Sweeps Prize

By Jim Bruene Posted on
Categories: Advertising & Promotion, Green Marketing, Loans & Credit

Looking for an eye-catching grand prize for your fall sweepstakes? You can't beat the new Smart fortwo car hitting to hit our shores in six months. According to today's Wall Street Journal (here), more than 20,000 (make that 20,001) have already plopped down $99 for a "reservation" for the Smart fortwo (here).

Not only is this a sexy sweeps prize, it has green appeal as a less resource-intensive vehicle compared to larger gas cars. While hybrids will still be more fuel efficient for in-city driving, the $12,000 base price makes it much more affordable that the $20,000+ Prius.

With the perfect storm of higher gas prices, the rebirth of environmental awareness, and America's obsession with cars, the Smart micro is almost guaranteed to be a hit, at least in urban markets. Anyone who's been in Europe in the last 10 years knows how popular these cars already are.

Financial Institution Opportunities
There's hundreds of ways to use a coveted, and potentially rationed, consumer product in your marketing efforts. For example:

  • At $10,000 less than the Mini Cooper, this is the cost-conscious choice for a sweeps grand prize
  • Use the car to reinforce your smart banking choices such as paperless banking, auto bill pay, and so forth
  • Smart loans that include a preapproved auto loan along with a reservation for the car
  • Use the car's "CO 2 champion status" (see inset) to reinforce your green banking efforts
  • Paint the car with your brand and provide smart rides around town…include a form on your website for requesting a ride; for extra credit offer text message reservations
  • Work with Smart USA dealers in your area to offer joint promotions

And you already know we have a weakness for the car; so as an added benefit, any banking promotion involving it has a great chance of making it to the pages of Netbanker. Just give me a heads-up here. 

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PayPal Really Launches on Facebook

By Jim Bruene Posted on
Categories: Epayments, Facebook, PayPal

PayPal application shown within a Facebook profile Two weeks ago I heard from PayPal corp communications who felt that my “PayPal launches on Facebook” title was misleading. They had a point. As I explained in the post, the new Facebook app was PayPal-powered but developed by Australia’s Yellow Media. The title could have been better.   

However, that’s moot now since PayPal has now launched its own app on Facebook (here). It appears to have been posted on July 3 and has 218 users as of this morning. The application provides a simple interface to request and track money requests from Facebook friends (see inset above). Additional functionality is said to be on the way.

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ChipIn, Another PayPal-powered Application Launches on Facebook

By Jim Bruene Posted on
Categories: ChipIn, Facebook, PayPal

Link to company Watching the explosion of content, and users, at Facebook, may be the most interesting thing we've seen since the rise of the commercial Web in 1995/1996. Marc Andreessen, not know for hyperbole, had this to say in a lengthy blog posting (here) that should be required reading for all content providers, including banks and credit unions:

(Facebook Platform) is an amazing achievement — one of the most significant milestones in the technology industry in this decade.

Every time we head over to the Facebook application directory, there's an interesting new financial app. Friday we found ChipIn, a nifty little widget that allows users to post a badge on their Facebook page or website that allows users to contribute money for a certain event or cause. It can be a charitable event such as Vancity's Bike Share program or a private event such as pooling funds for someone's birthday party. ChipIn is the second developer to launch on Facebook using PayPal's engine. The first was PayMe (see our coverage here).

ChipIn <chipin.com> is a Honolulu-based firm formed in mid-2005 with seed funding from CommerceNet. The company emerged from stealth mode in Feb. 2006 and launched its service on the Web in November 2006. The Facebook app launched June 24 and has 415 downloads as of 9 AM this morning, impressive growth compared to the 134 it had on Friday.  

Initially, ChipIn was a full-service payments company, actually holding and managing the funds for users. However, after a few months of those headaches, it outsourced all payments-related functions to PayPal. Check out the Chipin blog for the full company history.

How it Works
Sample chipin badge ChipIn uses the PayPal engine to do the heavy lifting similar to PayMe that we wrote about two weeks ago (here) (see note 1). To create a ChipIn badge on Facebook, users select a Facebook event (created separately within the social network), set the fundraising goal, then customize the text and colors of the widget.

In our test, we created a ChipIn badge with the goal of raising $100 to donate to Vancity's Bike Share program (see screenshot #1 below). Although, we were able to successfully install the widget on our Netbanker Facebook page (see screenshot #3 below), we had trouble with the customization. Every time we moved from the customization step to installation, our changes were lost (note 2).

To use the widget, visitors click on the "chip in" button to launch a PayPal window. Users choose an amount to pay, then login to PayPal, to complete the transaction. A progress bar on the Chipin widget shows the progress towards the fundraising goal. 

With a single click the badge can be placed within an individual's Facebook page (see screenshot #2 below). ChipIn also provides cut-and-paste code to load the badge on any blog or website. ChipIn badges can also be built directly through its website without the need for a Facebook account.

Financial Institution Opportunities
PayMe and Chipin are cool little apps that can and should be sponsored by banks, credit unions, or card issuers. Although the PayPal brand name makes Chipin relatively trustworthy, a widely recognized financial brand would be even better. At this point, ChipIn is still a tiny, relatively unknown company. If I were at a major bank, I'd write them a $50,000 check and have them rename their Facebook app, "Chipin by YourBank," instantly becoming the first bank with an official Facebook app. The company will also build white label versions you could provide to customers for use outside Facebook.  

For more on how to use social networking in financial services, see our Online Banking Report on Social Personal Finance.

Screenshots

1. Simple ChipIn Widget Creation
Using an existing Facebook account and an existing Facebook event, in this case Vancity's Bike Share (thanks to William Azaroff), a new widget can be created and posted to your Facebook profile in about a minute.

2. Facebook Promotion
Once the badge has been created, the Facebook integration provides simple ways to promote the cause. You can invite up to 10 friends each day, post it on your Facebook profile, or cut and paste the code onto your own website or blog. But the key to viral growth is the Facebook mini-feed which automatically notifies all your friends about any Facebook activities, including the addition of the Chipin badge to your profile.

Posted on the NetBanker Facebook Page
Here's how the ChipIn badge looks on my Facebook profile page (here). Note, you'll need to be logged in to Facebook to view.

Notes:

1. PayPal is not the developer of Chipin, nor do they have any financial interest in the company. Chipin is an independent developer using PayPal APIs.

2. Tests conducted on July 5 using Firefox 2.0.

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Free Checking in the Internet Age

By Jim Bruene Posted on
Categories: Advertising & Promotion, Bank of America, Chase Bank, Deposits, Checking, Savings, CDs

Bank of America and Chase, two of the three largest U.S. banks, are putting an online spin on free checking offers using online banking, security, and other benefits to encourage applications. On the surface, Bank of America's approach appears much more effective. And with no direct-deposit requirement, it surely generates more new accounts. However, without knowing how the free accounts convert to profitable relationships, it's impossible for an outsider to recommend one approach over another.    

Bank of America
Bank of America's free checking offer (see note 1) is difficult to overlook (screenshot below).  The top-of-the-page banner has animations that showcase the major benefits:

  • online banking
  • bill payment
  • "Keep the Change" debit card savings program
  • SiteKey security

The teaser "We're redefining Free Checking" creates interest while the bright blue "open an account" and "special online-only offer" further entice prospect to click through the banner.

BofA home page with free checking offer

The landing page (screenshot below) reiterates the online benefits and features a large laptop to reinforce the high-tech nature of the account. Two additional benefits are added to the list:

  • Free debit card with security protections
  • Free ATM access at 17,000 BofA machines 

BofA free checking landing page

Notes:

1. The free checking banner appeared in a visit to the homepage from a Seattle IP address at 10 AM Pacific time today. It did not appear on afternoon searches from several computers.

2. The bank uses a live chat popup after lingering on the application for a short time (click on image right for closeup).


Chase Bank
Chase's homepage banner uses the "kitchen sink" approach with an image of an ATM machine, debit card, paper checkbook, laptop, and PDA along the top. The mobile phone is a good addition, but the ATM machine and laptop are so small, they aren't easily recognizable in a quick scan (see screenshot below).

Another problem: the paper checkbook, which is centered and slightly larger than the others, seems to get an inordinate amount of attention. I'm not sure that the checkbook or the debit card add much value. U.S. consumers pretty much realize those are included in a checking account.

Chase's landing page leaves a lot to be desired. The benefits are listed in small, gray type that is relatively hard to read. And the only call to action, if you can describe it as one, is the last line in small blue type, with an underlined "apply online." No buttons + no color + no large font + no offer = no interest.  

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New Direct Bank: Element Financial from Irwin Union Bank

By Jim Bruene Posted on
Categories: Deposits, Checking, Savings, CDs, Direct Banking

It's been a few months since a direct bank launched. The last one we've been tracking is FNBO Direct that launched in February (coverage here). FNBO has been in the news lately, with a video interview with Business Week (here).

Element Financial rate tableThe latest is Element Financial <element-direct.com>, a unit of Irwin Union Bank. The simple homepage layout includes an icons across the top that gives it a modern look (see below). 

Unlike most direct banks pitching high-yield savings, Element features certificates of deposit. The lead product is a 5.44% APY CD. Rates are displayed on a unique rate table with tabs across the top listing typical deposit sizes, $5,000, $25,000, $50,000, or $100,000 (see inset).  

For more on direct banking, see our previous coverage here or refer to our Online Banking Report, Lessons from the High-Rate Deposit Marketers (here).  

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Bank of America Integrates Small Business Financial Services into Microsoft’s Startup Center

By Jim Bruene Posted on
Categories: Bank of America, MasterCard, Microsoft, Small Business

It's extremely difficult to win the transaction accounts of small businesses. By the time you know of their existence, they already have their bank accounts in place. And most small businesses are too busy to bother switching accounts to save a few bucks a month, or even to get better products or services.  

One way to grab market share is to find businesses when they are in the pre-startup phase, before they've set up banking accounts. In pre-startup, the prospective business owner is in pure research mode, spending little or no cash. To find these businesses, you need to offer online information that startups value and can find at your site, such as new-business planning advice. Then entice the owner to establish bank accounts with a package of services that appeal to a new business owner.

Bank of America is on the right track with its sponsorship of Microsoft's new Startup Center <startupcenter.com>. It's more like a product placement than a "banner ad" sponsorship. The BofA logo is never even seen in the main content area.

However, the bank's content is tightly integrated throughout, especially in the Finances area. For instance, if a business owner wants to "set up a checking account," the links to detailed information such as "compare now," "get a recommendation," and "get a business check card" all link directly to content housed on Bank of America's website (see screenshot below).

MasterCard is also a primary sponsor, but its content is less integrated. The third core sponsor is Startup Nation.

Microsoft Startup Center Finance section

Analysis
It makes sense for Bank of America to be involved in Microsoft's Startup Center, a  beautifully designed tool all decked out in "Web 2.0" colors and graphics. The content seems appropriate and useful for a startup. However, it will be a challenge for the area to gain traction with actual startups, who are unlikely to be looking to Microsoft for assistance, unless they are software developers.

But you don't have to be a mega-bank or mega-software company to provide valuable services to startups. Financial institutions can partner with local professional service firms such as accountants, consultants, and attorneys, to create content for startups such as Webinars, and in-person seminars. A well-priced package of banking services, positioned and priced for startups, will help you grab new business in the startup sector.

Examples of startup products and services at financial institutions:

For more information, see our Online Banking Report on Small and Microbusiness Online Banking (here). Thanks to Payments News for the link.

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My Fave Five Banking Industry Blogs (B2B)

By Jim Bruene Posted on
Categories: Blogs

I've  been meaning to write this post for a while. Since I'm about to go on vacation and the posting here will be light, I encourage you to follow these blogs if you are not already. In the order that I first began subscribing to them:

Best Financial Service Industry Blogs

  • Payments News blog Best financial services news blog: Payments News from Scott Loftesness at Glenbrook Partners is far and away the best source for tracking financial industry news, especially on the payments side. Scott has an uncanny ability to find every pertinent article published anywhere around the globe. And I swear he must never sleep. For sheer scope, it absolutely blows away American Banker, the pre-blogosphere "publication of record" for the banking industry.  
  • Bankwatch blog Best strategic thinking in financial services, especially online banking: The Bankwatch from ex-Bank of Montreal exec Colin Henderson. Colin covers an enormous amount of ground in his writings, from organizational development to direct marketing. And his involvement with peer-to-peer startup Community Lend provides an important real-world perspective.   
  • OpenSourceCU blog Best behind-the-scenes look at social media, especially as it relates to financial services and the credit union space: OpenSource CU is another wide-ranging and pointed commentary from the brilliant crew at Trabian (Brent, Trey and Matt). Full disclosure: I won a $5 Starbucks card from them in a comment contest earlier this year.
  • Bank Deals blog Best way to track bank and credit union offers: Bank Deals, written by an anonymous engineer who is a prolific poster in his spare time. It's like BankRate.com without the advertising and forced pageviews. Unlike the others listed here, Bank Deals is a pure B2C blog, so you only get the facts, no strategic insights.  
  • Marketing ROI blog Best antidote to all the b.s. circulating online: Marketing ROI by ex-Forrester analyst Ron Shevlin. Today's post is great example, as he dismantles a recently published article that attempted to convince readers that online banking leads to more online shopping.

Off-Topic

  • TechCrunch: The inspiration for hundreds, if not thousands of blogs, including ours. It's been diluted a bit with more posts and more authors now, but when Silicon Valley insider and founder Michael Arrington digs into a subject, it's still a fascinating read. And with 400,000 readers, the comment stream can be even more interesting than the post.
  • Freakonomics: From the authors of the best selling book of the same name. While they rarely touch on financial subjects, the blog is always thought- provoking and entertaining. 

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PayPal Launches on Facebook: Who Wants to be the First Bank?

By Jim Bruene Posted on
Categories: Facebook, Lending Club, MySpace, PayPal, Personal Financial Management, Social Networks

The social networking phenomena has entered a new phase: eCommerce. It has always been a bit hard to visualize mainstream businesses, like banks, book sellers, or phone companies making a profit on MySpace. It's been a great place for musicians and online dating companies to grab market share, but a MySpace Checking Account didn't seem just around the corner (see MySpace coverage here).  

All that changed May 24, when Facebook opened its network to outside developers, making its service more like Windows than MySpace. Already the service has grown by 3 million users, more than 10%, in the past 4 week, to 27 million (see Facebook profile in today's Wall Street Journal).

More interesting are the 893 new services have opened their doors on the platform. The most popular, Top Friends by Slide, already has 6.4 million users. Yes, that is no typo, in one month a Facebook service grew to more than 6 million users. With traditional marketing, it would have cost a bank or card company as much as $1 billion to attract that many customers assuming acquisition costs of $100 to $150 per new account. 

And it's not just the one app. A new Seattle-based music preference service, iLike, has added 3.8 million. There's not a whole lot happening in commerce apps YET, the first financial company with a service offering, Lending Club (see previous coverage here), is the most popular business app, with just under 10,000 users. That's about what iLike attracts in a busy hour, but for a financial services company, and especially a startup, that's huge, a grand slam using tired baseball metaphors.

For many reasons, it takes longer for traditional companies to pounce on new opportunities. But over the summer we'll start seeing hundreds of businesses launch on Facebook. By next year at this time, the Facebook apps directory will probably look like the New York City Yellow Pages (or at least San Jose).  

Financial Institution Opportunities

Searching the site, we only see four financial services that have launched on Facebook:

  • Lending Club's person-to-person loan marketplace
  • Prosper's lending game
  • Wesabe's personal finance groups
  • Pay Me, a payment service developed by Australian Ad Agency, Yellow Media using the PayPal engine (screenshot below, we'll provide more details once we finish testing it)

But so far there is no:

  • Bank
  • Credit union
  • Credit card issuer
  • Mortgage lender
  • Brokerage (although there are several stock monitoring service including Forbes, Yahoo, and Social Picks)
  • Rates tracking service
  • Credit report monitoring service (though Identity Guard is advertising heavily today)
  • Identity theft protection service

Let the race begin. But you better move faster than you've ever moved before, if you want to get the huge first-mover advantage on the Facebook platform. Good luck.

For more information, see our latest Online Banking Report, Social Personal Finance.

Pay Me on Facebook using PayPal

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Special Thanks to the First NetBanker Sponsor

By Jim Bruene Posted on
Categories: Market Rates Insight

We've been blogging here for more than three years. During the first 2.5 years, the site  was password-protected and available only to Online Banking Report subscribers. While that model worked fine, it didn't bring the kind of traffic that grows your business. Since we eliminated password protection, our site traffic has grown more than 100-fold.

But site traffic only increases your website hosting bill unless you have a way of garnering some revenues. And we have elected to use what we call the "value-added sponsor model." That means we seek out and offer space to highly relevant companies with products of great value to our core audience, banking and technology execs working in the financial-services sector. 

HOTS offer from Market Rates InsightOur first sponsor* is San Anselmo, CA-based Market Rates Insight. If you are a large bank, you probably already use their popular deposit- or loan-rate feeds. But the company is also in the product-tracking business, a great service I was unaware of until I had coffee with CEO Rick Barham this spring.

Since then, we've been discussing ways to work together since we are both banking product guys. Our first effort is a special Rate Move Alert offer from Market Rates Insightoffer to NetBanker readers, a one-year free subscription to its Rate Move Alert and/or its Heard on the Streets product-tracking service, a $500 value.

To take advantage of the offer, click on one or both of the banners (right), complete the brief registration form, and you're set. 

—

* Full disclaimer: Market Rates Insight is a sponsor but they had no control over this post. We're excited to have them as a sponsor because of the quality of their products and the special offers they've created just for you. In the future, we may thank other sponsors for their support, but we'll always let you know when we have a sponsorship relationship with them.

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Mobile Identity Theft Protection from Intersections

By Jim Bruene Posted on
Categories: Alerts & Messaging, Credit Reports & ID Theft Protection, Email Marketing, Email Samples, Intersections, Mobile Banking

This week, I took a two-day break from writing the next issue of Online Banking Report, an update to our popular report on Credit Bureau Monitoring and Identity Fraud Protection (2002 report here), to attend the Mobile Commerce Summit. 

Much to my surprise, an email received today nicely integrates those two topics. The offer sent was sent with the subject, "Mobile Identity Theft Protection," and it came from WireFly an online wireless reseller where I'd previously purchased a Blackberry.   

Very interested to see the mobile connection, I looked at the full message (below), a well-crafted offer for Identity Guard services from Intersections. The seemingly to-good-to-be-true offer: a full year of credit monitoring, with SMS alerts, free of charge.

Apparently, Intersections, like PayPal and SunTrust, is using free credit report monitoring as an introduction to its full-service credit report and ID theft protection services. It's an aggressive move that has repercussions for the industry. We'll look at its strategy in detail in the new report to be published in July.

Email offer from Wirefly for mobile identity theft protection

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Venture Funding Flows to Wesabe and Prosper; Wesabe Launches on Facebook

By Jim Bruene Posted on
Categories: Facebook, Prosper, Wesabe

Link to Wesabe on Facebook Two potentially disruptive startups, Prosper, the leader in U.S. P2P lending and Wesabe, the first-mover in social personal finance, both announced new funding rounds today:

  • Prosper took in $20 million, bringing total funding to $40 million (previous coverage here)
  • Wesabe added $4 million to its bank account, bringing its funding to $4.7 million (previous coverage here)

These are sizable bets on on niche markets that haven't thrown out a lot of revenues so far. But whether they succeed or not, the money will certainly fund additional innovations that will be educational for those in the banking industry. 

Case in point: Wesabe launched an app on the Facebook platform, becoming the first personal finance company to do so (screenshot below). So far it's a simple front door to their group discussions, but with more development resources, it could become a full-fledged "bank" running within the Facebook community.

For more information on Wesabe refer to our latest Online Banking Report, Social Personal Finance (here).     

Wesabe's application on the Facebook platform

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