Jim Bruene, Author at Finovate

Technology Credit Union’s YouTube Page

By Jim Bruene Posted on June 20, 2007
Categories: Tech CU, YouTube

YouTube is mostly an entertainment site, but it also can be used by businesses in a number of ways. The best example in financial services is Intuit's viral TurboTax Rap which has now attracted more than 1 million YouTube views, if you count the parodies (previous coverage here).

We've noticed a few financial institution postings on YouTube this year. However, San Jose, CA-based Technology Credit Union is the first we've seen to fully embrace the site, creating its own YouTube page <youtube.com/techcublog>.

The credit union posted four television commercials and another homemade video they called a "podcast."* Total views of the five spots is about 500. While that may not drive much new traffic, it's a smart move considering the minimal time and zero cost to post content to YouTube.

And, for first-movers such as Tech CU, the ability to garner press and blog attention is an added bonus.* While Tech CU hasn't done this yet, embedding YouTube videos into your website is a great way to make your website look more modern and get additional mileage out of your television advertising.

So far, Tech CU has only mentioned the YouTube page is a press release about its new television ads (here). But, I'm sure more integration is coming.

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*Tech CU took a little heat at OpenSource CU about the commercial masquerading as a podcast (see discussion here). However, Tech CU ended the criticism by explaining that the podcast was a test.

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Citi Mobile on National Television

By Jim Bruene Posted on June 20, 2007
Categories: Advertising & Promotion, Citibank, mFoundry, Mobile Banking

At the Mobile Commerce Summit, we heard Citibank is running national spots featuring its mFoundry-powered mobile banking service, Citi Mobile <citibank.com/citimobile>. (Hat tip Richard Crone).

Back in the old days, like late 2006, we would have had to request a copy of the ad from the bank. But today, everything is on YouTube, so check out the 30-second spot below (screenshot at right).

While its not as appealing as Apple's iPhone commercials, the Citi spot does a good job demonstrating the utility of mobile banking. It features a close-in shot of a couple driving down the road with the wife making a quick forgotten payment in a few seconds, while still carrying on a conversation with her husband. It is also great branding, furthering Citi's long-term positioning as a technology leader.*

What it Means
National advertising by the big banks, as well as carriers introducing their mobile wallets later this year and next, will create considerable awareness among consumers. Although, usage will be light for the next few years, mobile commerce is NOT a fad. This is one area you should address very carefully in your upcoming budgeting process for 2008.

For more information, see our Mobile Banking Report.

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*Citi would look even hipper if it embedded the YouTube ad in its mobile banking landing page.

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Conference Notebook: SourceMedia’s Mobile Commerce Summit

By Jim Bruene Posted on June 20, 2007
Categories: BancorpSouth, Conferences

I just returned from an enjoyable day and a half at the inaugural Mobile Commerce Summit put on by SourceMedia, the publisher of American Banker and numerous other financial publications.

The conference featured speakers from the entire mobile banking and payments food chain including wireless carriers, device manufacturers, mobile platform vendors, text-message service providers, security companies, research companies, and 70 to 80 financial institutions of all sizes. My estimate of total attendance was 250-300.

In a show of hands, the functional disciplines of the financial institution folks split roughly 50/50 between IT and the business/marketing side.

Since I'd heard most of the vendor presentations a few months ago at the Mobile Payment Forum, the most interesting part for me was hearing the results of the BancorpSouth pilot with AT&T, Firethorn, and CheckFree. Michael Lindsey, senior vice president, electronic delivery at BancorpSouth, described the results during one of the few solo performances of the show. I will post an update on BancorpSouth tomorrow.

The major themes of the conference:

Mobile banking has arrived.
Mobile payments, at least in the United States, are some years away; widespread U.S. adoption needs a critical mass of contactless terminals.
Short-term, mobile banking will be delivered through a mix of text messaging, WAP sites, and downloadable applications. Each has its own pros and cons, but ultimately consumers will vote with their wallets. On stage anyway, the vendors of the various and different models were extremely conciliatory, complementing other models and providers.
Security of the mobile channel is generally much better than online (at least in the days before multi-factor authentication).
The U.S. wireless carriers were generally portrayed as hindering developments, although Spencer White of AT&T did an admirable job of defending the carrier's position.

Best analogy from the podium:

When explaining why carriers don't want open access to their phones, Tripp Rackley, CEO of Firethorn, explained how that would be like someone allowing anyone to add untested apps to your ATM machine.

Best answer to a question from the audience:

When asked what the future mobile device might look like, Spencer White, director of mobile financial services from AT&T said, "We are looking at phones that print money." (OK, maybe you had to be there.)

Funnest presentation:

Richard Crone, of Crone Consulting, was entertaining as always, tossing out Obopay T-shirts to members of the audience while delivering a presentation chock full of good advice for financial institutions and other mobile players.

Most discouraging stat:

Among the dozen or so clients of Digital Insight that have launched the mShift-powered WAP site, only 0.5% of Internet banking users are using it, and even the best of the bunch is 1.5% (caveat, most of the mobile installations happened during the past month).

Most encouraging stat:

Among BancorpSouth's pilot users that were already using online bill payment, bill payment volume INCREASED by 25%, indicating the mobile option created more engagement with transaction capabilities.

Weirdest thing we learned:

One speaker's 14-year old daughter's non-negotiable mobile phone purchase-criteria was that the phone have a charm holder (this created a new conference metaphor with "the charm holder" being used to describe any consumer-driven feature).

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Wells Fargo Confirms Tests of ClairMail’s SMS Banking System

By Jim Bruene Posted on June 14, 2007
Categories: ClairMail, SMS, Wells Fargo

CIO Insight recently published a long article called, Will Mobile Banking Take Off? Reporter Dan Briody discusses Wells Fargo's mobile efforts and how their implementation parallels the early days of online banking. Wells EVP Steve Smith is quoted at length.

There's not much new for anyone closely following the space; however, about two-thirds into the article, we discover Wells Fargo is testing SMS banking, using ClairMail as its service provider. Not a huge surprise, but it lays to rest the rumors.

With Bank of America, Citi, and Wachovia grabbing the headlines this year with mobile initiatives, Wells Fargo could create a buzz with an SMS offering by being the first major U.S. bank to go that route. Several weeks ago, Bank of Stockton became the first U.S. bank to align with ClairMail (link here).

On a personal note, I can't wait. The ever-diligent Wells Fargo fraud department, which must have my home phone number on speed dial, will hopefully start texting me when I use their card outside of Seattle, saving us both a lot of time and expense.

For more info see our Mobile Money and Payments report here.

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Update on iPhone Banking

By Jim Bruene Posted on June 14, 2007
Categories: Mobile Banking, Website Usability & Design

Last week, we published an article about how a bank could leverage all the hoopla surrounding Apple's iPhone (here). Surprisingly, Steve Jobs made that job much easier this week, when he told the Apple Worldwide Developers Conference that standard website coding that works on its Safari browser will work on the iPhone out of the box. No special development tools are necessary.

However, at this time Apple is NOT allowing programmers to develop applications that run directly on the iPhone without launching the browser. Every application must run through Safari.* Here's a post from Salon discusses the pros and cons. All-in-all, good news for financial institutions wanting iPhone compatible offerings.

So go ahead and start building your Safari-optimized 336 x 168 by webpage. Make sure you drop a few nifty icons on the page so Mac users feel at home (see inset). Extra credit if you launch the page on 5:59 PM EDT June 29, 1 minute before the iPhone goes on sale on the East Coast.

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*And to make life a bit easier, Apple will produce a Windows version of Safari.

P.S. For those of you who want to understand the broader mobile banking trend and how the iPhone fits into it, check out the new mobile banking report from Online Banking Report.

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MySpace Meets Quicken: What’s Happening in Social Personal Finance

By Jim Bruene Posted on June 12, 2007
Categories: Best of the Web, Buxfer, Online Banking Report, Wesabe

Last week, I promised to provide more details on the conclusions in our latest Online Banking Report, Social Personal Finance: Will social networking revolutionize personal finance? It was mailed to subscribers last Friday, so it should be making its way through inter-office mail as we speak (or download here).

Here are the major themes/conclusions from the report:

Social networks are the new main street; so banks that want to be where their customers are should NOT ignore social networks.
There are many ways to bring social networking concepts into mainstream banking sites, for instance blogs and forums allow conversations to take place with both customers and employees participating.
The leaders in the space now are startups such as Wesabe and Lending Club. But what they gain in social networking savvy, they more than give back in lack of trust. So financial institutions are still incredibly relevant in social personal finance.
In the future, social networks may become so trusted that they can function as a virtual credit union, bringing together members to provide each other with financial services (e.g., P2P lending) or using their clout to negotiate deep discounts with financial providers (e.g., affinity credit cards).

Social personal finance innovators profiled in the report include:

Buxfer — Named OBR Best of the Web in the report for several pioneering features, including login via third-party APIs, transaction input via email, file appending, Google gadget, and budget alerts
Wesabe — Also named OBR Best of the Web for its integration of personal spending records with the wider community

We also looked at Mint, Geezeo, Lending Club, Wells Fargo, and Intuit's new Personal FinanceWorks and Small Business FinanceWorks.

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For more information on the report see the landing page here or download the abstract here. And for Colin Henderson's take at The Bankwatch, go here.

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Internet Banking Pioneer Chip Mahan Takes the Helm of Banking Startup Targeting the Pet Care Industry

By Jim Bruene Posted on June 12, 2007
Categories: Small Business, Strategies

I first met Chip Mahan in 1995 when he was at the helm of Cardinal Bancshares and about to launch the first Internet-only bank in the world, Security First Network Bank. That effort eventually spawned S1 Corporation, now a leading banking tech company, with a half-billion market cap.

Unfortunately, the Internet bank was sold off and eventually shuttered by Royal Bank, in a move I've never quite understood. Why would you take the pioneering brand name in one of the hottest sectors of the last 25 years and just close it down? Royal didn't even bother spending the $9/yr to keep the domain name <sfnb.com>, now a generic link site.

After his stint at the helm of S1 ended in October, Chip is back in the banking business taking the reins of startup Live Oak Banking Company. The Wilmington, NC-based company is still in formation. But it recently passed a regulatory milestone, raising $8 million in capital from fewer than 10 investors (see note 1, 2). David Lucht, who worked with Mahan as a credit officer for Cardinal Bancshares, is the Live Oak's President.

Live Oak was recently profiled in the local business press (here), and will apparently specialize in lending to veterinarian practices and kennels.

While a number of banks target health care practices including veterinarians, none appear to be aggressive online marketers with the possible exception of Bank of America, which is the only mainstream financial institutions using Google to market vet practice loans (note 3). Also, BB&T's Vine Street Financial lists vet practices on its menu of commercial health care lending services (see inset).

With Mahan at the helm, its almost certain their will be a web-based component to the bank's strategy. This is the long-tail of lending at work, targeting a highly specific area that needs a national focus in order to create enough volume to survive. Eventually, we expect to see national lenders targeting hundreds, if not thousands, of business niches online.

For more information on small business strategies, refer to Online Banking Report #107/108 (here).

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Notes:

1. It looks like the company may have registered the URL <liveoakbanking.com> as their URL, but its not currently live and the registration info is unlisted.

2. Here's what the North Carolina banking commission has listed for the company:

Required capitalization: $8 million
Prospective employees: 15
Address: 2605 Iron Gate Dr., Wilmington
Principals: James "Chip" Mahan, CEO; David Lucht, president
Focus: Business lending to vets, kennels and children's day care operations

3. Source: Google search, 14 June 2007, from Seattle IP address, 2 PM PDT

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Amplify FCU’s MoneyTracker Features Personal RSS Feeds

By Jim Bruene Posted on June 11, 2007
Categories: Best of the Web, Credit Unions, Jwaala, Personal Financial Management, RSS

When researching new mobile banking launches (see our earlier post here), we ran across one of the more innovative financial institutions in the country: Austin, TX-based Amplify Federal Credit Union <goamplify.com>, a $400 million asset institution with 40,000 members. The CU's tagline, Bank less. Live more. is right on target for the majority of financial consumers.

It's possible that Amplify uses more of the ideas we've featured in Online Banking Report and NetBanker than any financial institution we've come across. For example, cafe branches with free WiFi, mobile banking (WAP), Web 2.0 look and feel, high-yield checking (up to 5.1% APY), online chat, fee-based ($5.95/mo) value-add checking account (Amplified checking) loaded with online and mainstream features, and a host of other services from college planning to eBay bidding (see menu here). One surprising omission: no blog.

OBR Best of the Web
But our favorite feature, and winner of our fourth OBR Best of the Web 2007,* is Amplify's new personal finance management program, MoneyTracker. MoneyTracker uses natural language search so members used to Googling there way through the day will feel right at home. Instead of using slower drop-down search, a customer wanting to review recent Costco purchases simply enters "costco this year" in the search box.

The program was developed by Austin startup, Jwaala, which announced it in November. Amplify, which went live March 5 (press release here), is Jwaala's first installation.

MoneyTracker also includes an account aggregation engine so accounts at any financial institution can be tracked. And like eBay, it allows users to turn any search into an automatic alert with the option of receiving the information via email, SMS, or an RSS feed (see inset). As far as we know, Amplify is the first financial institution in the U.S., if not the world, to institute personal RSS feeds for its customers, and it is the basis for the Best of the Web designation.

Amplify posted a series of six videos (here) that do a great job explaining Money Tracker, an important part of gaining trial. The style, copywriting, on-screen talent, and staging, are among the best we've seen online.

Amplify's Main MoneyTracker page (link here):

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*OBR Best of the Web awards are given out occasionally for features that raise the bar in online financial services. It is NOT necessarily and endorsement of the company or its full product.

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Industry Participants See Capital One’s "Portable Debit" as Potential Disruptive Technology

By Jim Bruene Posted on June 11, 2007
Categories: Capital One, Debit Cards

The current reader poll on American Banker's homepage (here) is seeking opinions on Capital One's new "decoupled" debit card. It's a new MasterCard debit card that can be attached to any checking account by processing transactions through the open ACH system. Cards can be used in PIN or signature mode. Capital One began issuing the new product to credit card customers in March and has signed a co-brand deal with an unknown grocery chain.

Interestingly, of the 70% of respondents with an opinion (excluding the "too early to judge" category), more than half chose "Holds potential to disrupt status quo" (see chart above). The poll was first posted Friday morning (June 8) and runs for a week. Check here Friday for the final results.

While it's certainly not a scientific sampling, and it's in the free zone so anyone can respond, the results tell me that the product has the attention of the banking community. Whether it catches on with consumers is another matter.

For more information on Capital One's new product:

Aite Group 13-page report
Javelin's blog entries part 1, 2, and 3
Colin Henderson's Bankwatch post
American Banker's June 5 article

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Prosper Borrower Seeks "iMoney for iPhone"

By Jim Bruene Posted on June 7, 2007
Categories: P2P Lending, Prosper, Search Engine Marketing

When researching my earlier post, 10 Ways for Banks to Leverage Apple iPhone Hysteria, I happened to search for "iphone loans" at Google (see results below). Not really expecting to find anything, I was shocked to see the first result pointing me to a recent loan listing at Prosper (see inset, full listing here).

Unless this is a stealth PR ploy from Apple (doubtful), the enterprising NY waitress who posted this Prosper loan request, is riding the iPhone wave to nail down decent terms on a $1,000 loan, which she says will be used to buy the phone.

Julestar01, who by the way has a great future in marketing ahead of her, used the eye-catching graphic above along with the killer title, iMoney for the iPhone. After being highly recommended by the leader of her Prosper Apple User Group, including his/her first bid for the full grand at 13.20%, the loan is now fully funded at 12.55% with more than seven days remaining. It has already attracting 20 bidders causing the rate to fall 20 basis points even as I wrote this post. I'm sure there will be many copy-cat requests after the success of this one.

It does provide another way for a bank to leverage the iPhone hype: jump in and fund this loan, then you can say you are the first bank to make an iPhone loan.

Another fascinating observation, and the real reason for this post: Prosper, not Apple, or AT&T, or even Citibank, has the number one organic link on Google for "iPhone loans" at absolutely zero cost. That's the first-mover advantage at work.

Page 1 Google search results for "iphone loans"
(10:00 AM PDT, 7 June, 2007, from Seattle IP)

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10 Ways for Banks to Leverage Apple iPhone Hysteria

By Jim Bruene Posted on June 7, 2007
Categories: Advertising & Promotion, Cingular, Mobile Banking, Service

Apple's iPhone has garnered the kind of media hype we haven't seen since Windows 95 launched Aug. 24, 1995. I don't know if people are lined up at AT&T Wireless/Cingular stores yet, but I'm sure we'll see huge crowds mugging for the cameras at midnight, June 28.

But unlike 1995, when only Wells Fargo could brag about "Windows 95 compatibility," most banks offer services that will work on the iPhone, at least to some extent. While the phone has not been made widely available to third-party testers, the built-in Safari browser provides website designers with much of what they need to make website functions "iPhone compatible." One issue: The phone is not expected to support Java (see Design Issues below).

Product & Marketing Ideas

Here are 10 ways to jump on the iPhone bandwagon:

1. iPhone loans: It costs $500 or $600, not including the monthly AT&T fee. As a promotion, you could offer term loans, specifically designed for purchases of the iPhone (see note 1). (See our next post for more info on the Prosper loan listing to the right.)

2. iPhone rebates: Offer a $50 rebate for customers who buy an iPhone with your credit or debit card, then sign up for online banking/bill pay/estatements or whatever online service you are promoting.

3. Announce iPhone compatibility: You might want to hold off on this until you can run tests on an actual phone. But if you are compatible with Safari, you will most likely function fairly well on the iPhone.

4. Create an iPhone landing page designed specifically for the 336 x 168 screen, complete with its own URL <iphone.yourbank.com> or <yourbank.com/iphone>.

5. Advertise under "iPhone" or "iphone banking" on Google: There will be zillions of searches on this term this summer. If you had some type of iPhone-related promo this could provide significant (albeit expensive) traffic.

6. iPhone giveaways: You wont' be able to give them away for new accounts, but a sweeps with an iPhone prize would be a good attention grabber.

7. iPhone compatibility FAQs: As soon as you've tested the phone with your banking services, document it all with screen captures and post to your website. You can run a link of your homepage with an eye-catching, "see how to bank at mybank with your iphone."

8. Designate one or more customer service reps as "iPhone banking" support complete with their own Web page, email address, IM address, and mobile phone number of course.

9. Use the iPhone as an attention getter in general promotions for online banking or mobile banking: You can use the name recognition to further your mainstream marketing efforts, for example, "You don't have to have an iPhone to bank with us. Any web-enabled phone will connect with our mobile site, <m.yourbank.com>.

10. Create an iPhone banking users group, club, forum, or blog: To promote banking with you via iPhone, entice iPhone owners to register their phone with you and join the club. Club participants could get a special t-shirt and special attention from the bank such as a dedicated "iPhone banking" tech support rep (see #8) and iPhone tips and tools delivered via email/RSS.

Design Issues
From a design standpoint, the main concern is how your website, and online banking area, appear on a 168 x 336 pixel screen size (3.5 inch screen). The screen is designed to display the entire webpage with users using the touchscreen to zoom in on specific areas for better readability (see below). Apple has a good demo of how it works here.

If you have a standard 800 x 600 layout, it will be shrunk to about 50% of its normal size when viewed on an iPhone. Another design complication: user's can rotate the phone 90 degrees and instantly go to portrait mode (336 x 168) (see example screenshots an Marketing Pilgrim here).

Here's how Fandango looks in full-screen mode and then zoomed in on the box-office list:

Financial Institution Action Items
Of course, step one is convincing your boss you need an iPhone right away for research purposes. Then, at a minimum, address iPhone compatibility in your FAQs as well as briefing your service reps that deal with website access questions.

Whether you go decide to ride the wave further depends is up to you. And looking back at this list, I realize I probably should have stopped at five. But the point is, banks and credit unions can use current events to drive traffic, generate buzz in your community, and let your customers/employees know that you are "with it." And please send us picture of you with your iPhone on June 29th and we'll post it here.

P.S. For those of you who want to understand the broader mobile banking trend and how the iPhone fits into it, check out the new mobile banking report from Online Banking Report.

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Note:

1. Alternatively, you could offer an iPhone banking package with "free" iPhone. For example, bundle an iPhone with a checking account, credit card, credit line, etc. and sell for $20/mo with 3-year commitment (and early termination fee), with the customer paying the AT&T monthly charges separately.

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Finovate Blog

Author: Jim Bruene

Technology Credit Union’s YouTube Page

Citi Mobile on National Television

Conference Notebook: SourceMedia’s Mobile Commerce Summit

Wells Fargo Confirms Tests of ClairMail’s SMS Banking System

Update on iPhone Banking

MySpace Meets Quicken: What’s Happening in Social Personal Finance

Internet Banking Pioneer Chip Mahan Takes the Helm of Banking Startup Targeting the Pet Care Industry

Amplify FCU’s MoneyTracker Features Personal RSS Feeds

Industry Participants See Capital One’s "Portable Debit" as Potential Disruptive Technology

Prosper Borrower Seeks "iMoney for iPhone"

10 Ways for Banks to Leverage Apple iPhone Hysteria