Author: Jim Bruene

The Year of the 10-Year Anniversary

By Jim Bruene Posted on
Categories: Advertising & Promotion

Ebay_10_logoDuring the next few years, expect to see tenth anniversary logos plastered all over the web, as major ecommerce players celebrate their 10th birthdays. This year we have eBay, Yahoo, Amazon, and of course Online Banking Report. And who could have imagined 10 years ago that those three retailers would book 30 million purchase transactions in the month of March alone (see table below).

Curious as to how many websites were marking their tenth, we did a little Googling and found the following:

  • 10 years online — 75 times
  • 10th anniversary online — 74 times
  • Tenth anniversary online — 18 time

Analysis
Even though it may be a bit overused, we recommend that banks use their upcoming tenth anniversaries as the basis of an offline and/or online promotion. It’s a significant milestone, especially for ecommerce and online banking, which is still viewed by the mass market as new and unstable.

This year, more than 400 banks worldwide have the opportunity to celebrate 10 years online (the Jan. 1996 issue of Online Banking Report listed 425 banking websites at year-end 1995). However, only a handful (Wells Fargo, Stanford Federal Credit Union, Canada Trust for example) can boast of having hosted web banking for 10 years. 

To mark the occasion, you might consider a virtual open house, press release, or special price promotion (10-year CD, 10-year home equity loan, 10% money market account for the first month, etc.). Another idea would be to identify customers who’ve banked online for 10 years and provide them with recognition and some ever-popular logowear.

—JB

Top 5 Online Retailers, Ranked by Purchases for March 2005 (U.S.)
eBay = 21.3 million purchases (45% of U.S. total)
Amazon = 5.7 million (12%)
Yahoo! Shopping = 2.5 million (5%)
Symantec = 1.2 million (2%)
QVC = 1.0 million (2%)
———————————-
Source: Nielsen//NetRatings MegaView Online Retail

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Banking Bill Payment Guarantees

By Jim Bruene Posted on
Categories: Bill payment, Citibank, Epayments, Service

Checkfree_logoWe believe a strong bill payment guarantee is crucial, not only to the credibility of your epayments program, but by implication, to your entire online banking offering. CheckFree has offered its logo up for years, but your customers want to know what YOU will do for them; most would prefer to know nothing about CheckFree.

And your guarantee needs to be visible to both online banking users and those just thinking about it. One of the best ways to increase visibility is by creating a "bill-pay guarantee" icon that users can click through to learn more about it.

Citi_billpay_logo_1 One of the better examples is at Citibank (inset) on its logon page. When you click on the logo, a small popup appears (click on the thumbnail below):

Citi_billpay_guarantee_1*

This guarantee has great copy, you can tell the marketing department was heavily involved. Rather than just reiterating the rather droll performance guarantee,* the bank also highlights several benefits:

  • No hidden charges, in other words, unlike "free checking," bill pay really is free
  • 24/7 service with "fast response"

*Citi’s bill-pay guarantee states that payments will be processed within 24-hours and delivered to payees according to the schedule, or the bank will pay for any fees incurred.

—JB

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Premium Banking Examples

By Jim Bruene Posted on
Categories: Premium-level Products, Pricing

1st_source_premium_bankingFor years, whenever we needed to show an example of product line segmentation, we’ve used 1st Source Bank’s Premium Online Banking, a $6/mo upgrade for users if its free online banking service.

Our most recent research uncovered several more examples:

American Savings Bank
Free: Online Banking
Free: Online Banking Plus
$5.85/mo: Online Banking Premium

North Shore Bank
Free: Epay
$5.95/mo: All Pay

We’ll be covering this subject in great detail as numerous premium online banking programs are launched during the next few years. For more information on multi-level pricing, refer to Online Banking Report #109, published in August 2004.

–JB

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Yahoo Pursues Small Businesses

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

Free_yahoo_website Did you see Yahoo’s full-page ad in today’s Wall Street Journal (or was it the New York Times)? Anyway, it was on the back page of one of the interior sections, and it declared:
                —–
A free website for every small business in America.

Now, everyone reading the paper knew it was a come-on; when you go to the Yahoo Local website they try to upsell you on the $9.95/mo premium version (click on the inset for details). Furthermore, the ad probably cost more than the sum total of "free" websites given away. I don’t know if it will pay off, but it certainly got my attention.

Financial Institution Opportunities
I got to thinking, what could a bank give away that wouldn’t sound too hokey or cost too much? The free website isn’t a bad idea, especially if you wrapped some ecommerce services around it, but Yahoo and many others have been doing that for years.

What about bill payment? If you were willing to open up your bill payment system to allow payments to originate from other banks, you could mimic the Yahoo ad in your market with:

A free online bill payment for every business in <yourtown>!
(exclamation point optional)

But a lot of banks already offer free bill payment, so try this on for size:

Free lifetime storage of your checks* for every business in <yourtown> *images of course

The creatives would have a blast with that one.

Finally, since those both have system implications, here’s something anyone could offer:

Free local online directory listing for every business in <yourtown>

To pull this off, you’d need to create a database (ideally) or an even an HTML page that lists the web and business addresses for every business in your market. Bank clients could be given premium listings/linkages. And you’d need to give the directory exposure with visible links off your website.

—JB

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Financial Data Archive Trends

By Jim Bruene Posted on
Categories: Deposits, Checking, Savings, CDs, Images & Online Archives

Now that Google has doubled the free online storage for its Gmail users* to 2GB, you’d think banks would get with the program. There’s value in storing them bits. However, you are still lucky to get a year’s worth of data, and many places provide just 3 or 6 months (probably about 50k of data, if that).

In May, Online Banking Report will publish a report on the state-of-the art in online archives at financial institutions. You can get a sneak peek at the notes we’ve compiled so far by downloading this file (23-page Word doc):

Download statement_archive_study_for_obr_119.doc

Of the 100 or so banks and credit unions we’ve looked at, most hold data for less than one year. Here are the storage champs according to a quick look at the data:

  • Transaction data: 2 years — tie between Charter One Bank and Commerce Bancshares (Kansas City)
  • Estatements: 3 years — Bank of America
  • Check images: 5 years (according to customer service, 7 years according to its website) — E*Trade

We’ll scrub the data, summarize it, and explain the implications and opportunities next month.

Also I am looking for commentary on the subject. If you’ve got a comment on the pros, cons, or business case for online archives, send me an email.

—JB

*Google Gmail is still in beta, if anyone needs an "invite" to open an account, just drop me a note.

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Synovate Reports Credit Card Direct Marketing Futility

By Jim Bruene Posted on
Categories: Advertising & Promotion, Credit/Debit Cards, Email Marketing, Metrics & Market Research

Card_solicitations_1

Synovate reported the results of their annual tracking study of U.S. credit card solicitations. Like the number of branches, the totals just keep growing, despite the inevitable decline in their effectiveness.

In 2004, the U.S. card issuers sent a record 5.25 billion solicitations, to about 75 million households (71% of all U.S. households). It averaged 5.7 offers per month, or 70 annually. And you don’t need a degree in economics to predict the results: record low response rate of 0.4%, down 2/3 from as recently as 6 years ago (1.2% response in 1998, see chart above).

Analysis
It’s almost surprising that the average household gets less than 6 card offers per month, we’ve gotten that many in a day. And no one here has responded to an offer since the last century. 

But I digress. The point is that financial services marketing departments all over the country are looking for cost-effective alternatives. If you figure traditional DM costs $1 per piece when you load in all costs, the acquisition cost has increased from $80/acct in 1998 to $250/acct in 2004. 

And thanks to the spam overload and phishing hype, it doesn’t seem like email will be the answer anytime soon.

What’s left? It’s that captive audience called online bankers. Here is a group of customers you know extremely well, thanks to tracking their bill pay activity, and that come to you several times a week on average. Grab some of that DM budget this year and show what kind of sales you can deliver. 

—JB

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First Brochure Focused on a Single Online Banking Feature

By Jim Bruene Posted on
Categories: Epayments, Personal Financial Management, Wells Fargo

Wells_fargo_my_spending_reportTen years after becoming the first bank in the world to post customer statement data on a website, Wells Fargo’s in-branch collateral shows just how far the online banking industry has matured.

Instead of putting a generic online banking brochure in the branch, which would hardly get a second look these days, at least in our Seattle neighborhood, the bank has created an entire take-one brochure showcasing its innovate new feature My Spending Report that we looked at Feb. 17.

The My Spending Report brochure is a statement-stuffer sized 4-panel, 4-color creation printed 2/05 and entitled:

Look at your finances in a new way.

Also on the cover:

Introducing My Spending Report, exclusively from Wells Fargo.   

Inside, the left panel explains the spending report and cross sells credit and debit cards with an umbrella program called, The SmartSpender Plan, which includes:

  • My Spending Report
  • WellsProtect fraud protection
  • Wells Fargo Rewards on select card accounts

The right panel shows a screenshot of the report depicting checking, debit card, credit card, and bill payment activity.

Update on Website slacking
In February, we were critical of the bank for announcing a new feature that had no visibility on its website. That has been corrected. Now the first result for a a search for "My Spending Report" links users to this explanatory page.   

— JB

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Wells Fargo’s Remote Deposit Capture

By Jim Bruene Posted on
Categories: Deposits, Checking, Savings, CDs, Remote Deposit Capture, Wells Fargo

Last year, NetBank was one of the first banks to talk about allowing business customers to deposit checks directly via scanner, so called remote image capture or remote deposit capture.   

Bony_remote_depositNetBank has yet to go live, but several others have including: First Tennessee (the first to go live in March 2004), Bank of New York (announced 08 Nov 2004, see inset), HSBC (announced 08 Nov 2004), Wachovia (announced 13 Dec 2004), BB&T (announced 10 March 2005, live 01 April 2005).

Also, know to be implementing or testing: PNC, E*Trade Bank, Bank of America, LaSalle Bank, JPMorgan, BB&T, Mellon, Citibank, Key Bank, Zions, and Glenview State Bank (IL).

Now you can add Wells Fargo to that list.

Last week, the online banking pioneer announced its extremely well named remote deposit capture service, Desktop Deposit. The service allows businesses to scan checks into their PCs using a USB device from the bank. No word yet on pricing and availability.

Analysis
Remote deposit capture, either at the customer's PC or at a scanner-equipped ATM, has the potential to negate one of the branches last roles, check cashing. It could be especially appealing to small businesses who benefit from the obvious time savings (no more trip to the bank) and better cash flow (no stashing checks away until the weekly bank run).

But the more important benefit to businesses are the improved record keeping and easier resolution of billing disputes. Images of deposited items are available immediately online and can be easily searched, retrieved, and forwarded, should a question arise later. Finally, the business retains the original paper item for a back-up paper trail.

And given the large value to the business, banks should be able to increase checking account and/or online banking fees for remote-capture clients, thus profiting from a process that wrings paper checks out of the system.   

Resources:

 

— JB

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Billeo’s Business Model is B2B

By Jim Bruene Posted on
Categories: Billeo, Desktop Presence, Epayments

We finally had a chance to talk to Billeo founder and CEO, Raj Lalwani. First last Thursday, then a followup demo today.

I am happy to report the CEO is as impressive as the software.

And it turns out their business model is more B2B than B2C. Billeo will be custom-designing toolbars for banks, credit card issuers, other ecommerce players, such as retailers, travel booking sites, and yes, even billers. They hope to announce a HUGE customer win in the next few weeks. 

We think this application has great promise

We will dissect the company in the next issue of Online Banking Report (available online approximately April 12).

Previous articles can be found here.

— JB

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Everbank’s Foreign Currency Deposits

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

Everbank_logo_1Two-time Online Banking Report Best of Web winner, Everbank landed a flattering two-page spread in the April 2005 issue of Business 2.0.

The author, David Dent, is highly complementary of the bank’s innovative strategy of allowing deposits to be held in a variety of foreign currencies. Not only has it been lucrative for currency investors, it’s been a boon to the bank.

Everbank’s foreign-denominated deposits are closing in on US$1 billion. Specifically, at year-end 2004, foreign currency deposits accounted for $850 million, or 25% of the bank’s $3.5 billion in total deposits.

Analysis
This is a good example of how a small player can mine a niche using the national reach of the Internet. Look for other banks, both Internet-only, and traditional financial institutions to do the same in other areas, such as lending to small businesses, transaction accounts geared to traveling sales reps, impenetrable savings accounts for the security conscious, and so on. 

Resources: OBR Best of Web winners: 1995 to 2004

— JB

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Online Banking Helper Bubbles

By Jim Bruene Posted on
Categories: Ebay, Website Usability & Design

Ebay_bubble_helper_1Here’s a little technique we haven’t seen before, helper bubbles that popup to highlight new and/or underutilized features.

For example, in My eBay, this yellow bubble appeared on the screen pointing to a relatively new feature on the site, a drop-down box that allows the user to take various actions on items they are tracking.

Note: eBay allows you to turn off the bubble with a "Don’t show me this again" link.

Analysis
A great way to highlight important features of online banking.

—JB

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Affinity Banking Online from Blackwell

By Jim Bruene Posted on
Categories: Direct Banking

Bankblackwell_logoBankBlackwell, a new Internet-only bank targeting African-Americans, began it’s roll-out today, with its first press release announcing OTS approval. The bank hope to launch this summer, provided they raise sufficient capital and pass regulatory muster.

CEO James Mundy and CIO Bruce Narison briefed me on the bank last fall, and they have impressive plans. We’ll keep you posted as they lift the veil on their online banking platform.

Analysis
BankBlackwell is the latest of a string of Internet-oriented banks using affinity marketing techniques. The two most prolific are: National Interbank which runs a number of banks for professional membership organizations such as the American Medical Association and The Bancorp Bank which has private-labeled banks for 40 organizations.

Affinity marketing is a proven strategy in the financial services arena, enjoying great success during the past 15 in the credit card market. We think there’s a great future in affinity-based online banking. As consumers grow more confident of web-based financial entities, they will be more than happy to take a few moments to set up an account and transfer a few grand into a higher-yield situation.

— JB

If you’d like to learn more about the future of online banking, check out the Online Banking & Bill Pay Forecast: Current, future and historical usage: 1994 to 2016 from our sister publication, The Online Banking Report.

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