Author: Jim Bruene

Holiday Bill Pay Sweepstakes

By Jim Bruene Posted on
Categories: Advertising & Promotion, Epayments

Digitalinsight_billpaysweeps_logoTo increase electronic bill payment usage, both Digital Insight and Online Resources are sponsoring holiday usage sweepstakes that client banks can offer to end-users. Modeled after similar programs at MasterCard and Visa, the promotions provide an incentive to pay bills online. By pooling the entries from all participating banks and credit unions, the prize pool is bigger than if a single financial institution sponsored it individually.

Some highlights of the two programs:

Digital Insight <www.diproductsite.com/q4_05_pay_anyone/splash/splash.html>

  • One single prize of $30,000 across all participating financial institutions
  • Three-month duration: One entry after paying 10 bills between Dec. 1 and Feb. 28
  • One additional entry for each payment greater than $10 (maximum 10 additional entries)
  • No more than one payment per payee per month counted towards total

Online Resources <www.orcc.com/sweeps/holiday05>

  • One grand prize of $5000, two first prizes of $250 gift cards, plus one second prize of $100 for each participating financial institution
  • Two-month duration: One entry for every bill paid between Nov. 1 and Dec. 31, 2005

AnalysisOrcc_billpay_sweeps
We like the concept behind both programs. Fourth quarter usage sweepstakes and bill pay marry very well. The Online Resources program is easier to understand with virtually no fine print (click on screenshot right for a closeup); however, it featured a stingy $5500 prize pool (not including the $100 for each participating bank/credit union).

Suttonbank_billpay_sweepsIn contrast, Digital Insight offered an eye-catching $30,000 grand prize, but offered no smaller consolation prizes (click on inset left for a closeup of the contest rules). It also required 10 payments before the user was entered into the drawing, a detriment to lower-volume, casual users.

Other Bill Pay Sweeps

  • RBC Centura <centura.com> is offering a total prize pool valued at just under $10,000, with a grand-prize trip to the ACC basketball tournament (valued at $3500) and 100 runners-up earning $50 in ACC merchandise. Users receive one entry each day they pay a bill between Dec. 2, 2005, and Feb. 17, 2006 (click here for screenshot).
  • In another basketball-themed promotion, University Credit Union <ucu.org> in Southern California is giving away tickets to UCLA basketball games, and a grand prize of a John Wooden autographed ball, to members using bill pay in Oct/Nov/Dec. Users receive one entry per bill paid (click here for screenshot).
  • PNC Bank <pncbank.com> has been running a bill payment sweeps for its business customers since mid-year. Each month, one out of every 100 new bill pay customers receives their choice of an iPod, $300 Marriott travel card, or $300 Staples card. In addition, each month the same prize choice is awarded to one existing customer who paid a bill that month. The sweeps ran from July 1 to year-end. (click here for screenshot). 

—JB

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Everbank Goes on the Offensive Against Latest Phishing Scheme

By Jim Bruene Posted on
Categories: Everbank, Phishing, Security & Privacy

Everbank_homepagel_phishwarningIf you are a smaller bank or credit union and are phished for the first time, you might consider the approach Everbank took in response to a phishing incident today.

The bank took the unusual step of sending an email to its customers warning them about the fraudulent email (click on the screenshot below for a closeup). They even included a copy of the phishing message at the bottom of the warning. Everbank_email_phishwarning_1The bank also posted a small red-outlined box on its homepage (see inset) with a link to the same email message.

Analysis
Although it may seem futile to send an email warning about a fake email, we think it’s a good idea if the phishing episodes are infrequent. The big targets such as Citibank or PayPal can’t do this, not with dozens of attacks every month; however, smaller companies should consider proactive email communications, but no more than a few times per year, otherwise customers won’t pay any attention.

Most users will realize the Everbank response is genuine, because it doesn’t ask for any customer information, especially when they compare it to the fake message at the bottom of the screen.

Yes, some customers will be even more confused. But hopefully their calls to customer service will provide you with a chance to put them at ease. There are costs associated with these anti-fraud efforts, but that’s part of the trust involved in being in the banking business.

—JB

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Unique Identity for Business Banking

By Jim Bruene Posted on
Categories: Advertising & Promotion, Small Business

There are several ways to make it easier for business banking customers to find the right area of your website:

  • Complete unique URL such as Abbey National’s <anbusiness.com>
  • Business/biz appended to the URL such as Vancity’s <vancity.com/MyBusiness>
  • Business added within the URL such as Barclay’s <www.business.barclays.co.uk> or LaSalle Bank’s <vip.lasallebank.com> for its private banking area
  • Use cookies to automatically display the business area when users type your normal URL. Wellsfargo_homepage_defaultsetting_2 Wells Fargo uses this technique. When homepage visitors choose the Small Business area, a small text link asks, Make this the first link you see on wellsfargo.com (click on inset for a closeup) which sets a cookie to redirect users to the Small Business area each time they go to the main bank site.

Analysis
All of these techniques are trivial to program and can help differentiate your business offerings from your personal product line. We especially like Abbey National’s unique business URL that can be a memorable device in print ads and direct mail. Also, anyone with a separate business offering should consider the optional user-set cookie approach of Wells Fargo.

—JB

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ING Direct Savings Account Demo

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

Ingdirect_demoING Direct US <ingdirect.com> has added an online demo, perhaps the only pure savings account demo online: a good idea, if you are serious about the high-rate deposit business. Users need reassurances you are trustworthy and competent. A good online demo helps on both counts (click on inset for closeup). To view the demo yourself, click here.

—JB

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Platinum Upgrade from American Express

By Jim Bruene Posted on
Categories: American Express, Credit/Debit Cards, Premium-level Products, Service

Despite intense competition from MasterCard and Visa issuers, American Express has been able to maintain a substantial share of the high-end market for credit/charge cards. For the twenty years we’ve followed the company, its marketing has consistently conveyed an upscale image.

Amex_email_premium_serviceCase in point: The email we received today asking us to upgrade from our existing Gold Card to an American Express Platinum (click on inset for a closeup look).

The subject line said it all:

     Upgrade to a card with premium service

The benefits cited included:
* Complimentary airline ticket on any of the 18 participating airline partners
* Airport club access (Continental, Delta, Northwest Airlines)
* Hotels & resort special privileges
* Free Membership Rewards program
* By Invitation Only (privileged access and tickets to events that, in many cases, can’t be purchased through any other source)

Analysis
The American Express solicitation is heavily oriented towards travel and entertainment benefits which plays to the company’s strengths. A bank could do the same by concentrating more on the "premium service" aspect. For example:

  • Front-of-the-line service: Your service request, whether by email or phone, always goes to the front of the queue
  • Branch manager access: If you ever need to go direct to the top for any reason, just call (212) 555-1212 or email branchmanager@yourbank.com
  • Preferred access to product specialists: If you ever have an unusual problem, whether it be accessing your online banking account from your laptop, or how to fund your Roth IRA, we will connect you with a specialist with state-of-the-art knowledge in that area
  • Ft. Knox security: You need not worry about the safety and security of your bank accounts with our upgraded security and authentication algorithms

For more ideas, see "E-Service 2.0" (OBR 105/106).

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Bank of America’s New Security Toolbar

By Jim Bruene Posted on
Categories: Bank of America, Desktop Presence, Security & Privacy

Bofa_toolbar_closeupBank of America launched a co-branded version of Earthlink’s toolbar designed to prevent users from surfing to fraudulent websites. Of note is its official name, Bank of America Toolbar Powered by Earthlink. It’s highly unusual for a bank, especially the largest consumer bank in the country, to give a partner such high billing. Our guess, although unconfirmed, is that Earthlink is paying the bank for the product placement.

In a similar manner to eBay’s toolbar released in 2002, the BofA/Earthlink version uses red, green, and yellow lights to indicate whether a website is known to be safe (green), known to be fraudulent (red), or unknown Bofa_homepage(yellow). A popup blocker is also included. The toolbar is free and can be downloaded by any Internet Explorer for Windows user, you do not have to be a customer of the bank or Earthlink. According to Earthlink, a Mac version will be available soon. The toolbar does not work in other browsers.

The toolbar was announced in a press release today, and is accessible from a small link on the right of the homepage (click on inset for a closeup).

Analysis
Bank of America’s toolbar is the first of what we expect to be a major source of differentiation during the next five years: the branded desktop presence (see OBR 85, for more information). The Scamblocker toolbar is a relatively low-tech entry into the space. More sophisticated offerings, such as Southwest Airlines Ding (NetBanker, 5 Dec), are on the way later this year, if not at BofA, then at its U.S. competitors.

—JB

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Online Balance Poaching: E*Trade’s Mileage Maximizer

By Jim Bruene Posted on
Categories: Best of the Web, Credit/Debit Cards, E*Trade, Loans & Credit

Credit card companies have been poaching revolving balances from each other for years primarily through direct mail. It helped boost the share of early movers, such as Capital One. But once the tactic was widely copied, it dragged margins down for all.

The same technique has been used online with dedicated balance-transfer microsites posted by Bank of America and others beginning in 2003. The online balance transfer is better than paper because it can be interactive, prompting the user to make additional transfers, or to correct errors in the information input. However, it still requires the user to make a trip to the website to make the transfer.

Etrade_mileagemaximizerEnter E*Trade’s new Mileage Maximizer program, launched with a page-dominating color ad in Tuesday’s Wall Street Journal. With the Mileage Maximizer, the bank encourages users to make purchases on their existing non-E*Trade rewards card, then have the balances AUTOMATICALLY swept to an E*Trade 8.9% APR line of credit each month. The bank’s website is used to initiate and maintain the transfer process. But like recurring bill payments, once the sweep is established, it will occur each month with no interaction by the user.

E*Trade may well be the most innovative online financial services company. Here are some of the industry firsts they’ve logged over the years:

  • 2001: MyLoanTeam from E*Trade Mortgage (OBR 73)
  • 2003: Real-time funds transfers (OBR 96/97)
  • 2005: 7-year online transacation archives (OBR 118)
  • 2005 (March): First U.S. bank offering security tokens for online access (NetBanker 2 March 2005)
  • 2005 (December): First virtual rewards card, Mileage Maximizer

—JB

Editor’s Note: Mileage Mazimizer was awarded an "OBR Best of the Web" in our report on online lending published Jan. 31, 2006 (OBR 126).

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Southwest’s DING Widget Marketing Growth

By Jim Bruene Posted on
Categories: Desktop Presence

Southwest_ding_downloadsOnline marketing consultancy Compete <compete.com> released interesting results today about the popularity and effectiveness of the DING!, the innovative desktop application that Southwest Airlines released earlier this year (see NetBanker 4 March 2005).

According to the Boston-based firm, the Southwest application has been downloaded almost 1 million times this year (click on inset for closer view). More importantly, DING! users are 45% more likely to book through Southwest than non-DING users leading to more than $60 million in incremental bookings this year. Southwest_ding_icon_1

These 1 million DING users join the nearly 20 million using similar toolbar-based programs from Google, Ebay, and many others.

In related research, Compete’s recent study of online banking users found widespread interest among consumers in receiving MORE information from their financial services providers:

  • 73% indicated a desire for more information on new offerings and services
  • 69% would download a desktop app (such as DING!) to receive useful info on a regular basis; 78% would do so if the application helped protect against fraud
  • Only 5% indicated an unwillingness to use the online channel for information

Analysis
The next two years are an ideal window to launch a direct-to-the-desktop application like DING or a toolbar-based interface such as Google Toolbar or Billeo. A significant number of users have grown accustomed to the technology, while at the same time, due to widespread phishing and spam, email has become less effective for online marketing.

Going direct to the desktop provides a secure, trusted pipe directly to the user where you can deliver account-related info, triggered messaging, service announcements, and the occasional sales message.

For more information, see Online Banking Report #85, Grabbing Desktop Mindshare, published in 2002.

—JB

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Zopa Wins OBR Best of the Web

By Jim Bruene Posted on
Categories: Loans & Credit, Zopa

Obr_bestofweb_3UK-based person-to-person lender Zopa <zopa.com> is the fourth and final company to win an OBR Best of the Web designation from Online Banking Report in 2005. Also winning this year were:

Zopa_peopleThe company’s innovative lending model is highlighted in Online Banking Report’s annual, Top 10 Achievements in Online Financial Services. The report will be published next week (OBR #125).

—JB

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Four Banks with 4% for Homepage Special Savings Rate

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

Online competition continues to heat up as the major banks begin offering 4% APY specials just in time for the holidays, and those year-end bonuses. Today, four of the top 20 U.S. consumer banks are offering specials of 4% or higher on their homepages:

Citi_4cd_homepageCitibank (2nd largest U.S. deposit base) is the biggest player to crack the 4% mark with a nine-month certificate aggressively promoted on its homepage with a page-dominating animated banner and hawked in one of the bank’s four postage-stamp ads running along the bottom (click on inset for a screenshot).

Note also the large Red Cross donation banner (bottom) supporting fund-raising for South Asia earthquake relief.Citi_4cd_email_10_21

An email advertising the 4% CD was sent to customers 21 Oct. 2005. It was identical to one sent 1 July 2005, except the rate was 3.45% at that time (click on screenshot right).

Other Top-20 Bank Specials
Three other top-20 banks also offer 4% or higher deposit specials on their homepages:

  • HSBC (10th largest), which has marketed a high-rate savings account for much of the Hsbc_4savings_homepageyear (NetBanker, Aug. 26), increased the emphasis with a huge front-and-center ad on its homepage, a red piggy-bank with 4% in it (click on screenshot right).
    –
  • National City (11th largest) has raised the bar even higher with a 4.75% Thanksgiving SpeciNat_city_4cd_thanksgivingal, a 14-month CD that requires a National City checking account ($1500 minimum opening deposit) and at least $10,000 (click on screenshot right). Here’s the fine print:

    To qualify for this offer, depositor must have an existing National City personal checking account or open a Preferred Interest Checking account with $1500. Annual Percentage Yield is available from 11/21/05 through 11/30/05. Maximum deposit limit $250,000. Offer only available for consumer deposits.

  • World Savings (#17) has a lower-key link to a 4.16% 4-month Internet Special CWorld_4cd_homepageD (click on screenshot right). The rate is good for $10,000 to $250,000 and must be opened with "new money" (from outside the bank).

—JB

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UK Loan Marketplace Zopa Offers 2% Bonus

By Jim Bruene Posted on
Categories: Loans & Credit, Zopa

Zopa_2bonus_homeThe new UK-based person-to-person loan marketplace Zopa <zopa.com>, first discussed here Aug. 3, is offering a 2% bonus to lenders who make money available prior to 30 November 2005 (click on screenshot left). In order to earn the bonus, would-be lenders must offer competitive rates.

The website cites an example of the potential return of a 4.9% rate on a 36-month installment loan:

  4.9% interest paid by borrower
+2.0% Zopa bonus
(1.3)% expected loss rate
———————————-
5.6% return to investor

Analysis
Zopa claims to have attracted 32,000 users, including 16,000 lenders in the eight months it’s been online. So far, it has not lost any money to loan defaults, but that would not be unusual for a lender in its first few months.

The 2% bonus to lenders is not sustainable since the company only books a 1% loan fee, plus commissions, if any, when borrowers elect to take credit insurance. Evidently the company has more buyers (borrowers) than sellers (lenders). With such a novel concept, it’s no surprise that the number of people willing to take money is higher than those willing to give it out.  As the concept becomes better known, and assuming that interest rates are allowed to float, the supply of money should reach equilibrium with demand.

—JB

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