Jim Bruene, Author at Finovate

Sales & Marketing: Preparing for a Future without Bank Branches

By Jim Bruene Posted on March 18, 2014
Categories: Branch Banking, Sales Techniques, Strategies

It’s been almost a year since my last branch rant (here), so I feel I’m due. As I’ve said before, as founder of a business tied to the success of digital channels, I’m totally biased, so proceed with caution.

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During lunch at the Bank Innovations conference here, I engaged in a spirited debate about the value of branches. And later that week, I enjoyed Optirate’s rebuttal to The Financial Brand’s defense of bank branches. It’s one of the more highly charged, and important, issues of the day.

Here’s what it boils down to:

Branches have value…

…but not enough to pay the rent

Since customers won’t pay directly for branches (see note 1), banks must cover their costs with low deposit rates, penalty fees and other charges. That has worked for a while, but eventually leaner competitors will figure out how to cherry pick the profitable customers/services. We saw ING Direct siphon off a few billion in deposits during the high-rate years and now we are finally starting to see alt-lenders making a small dent on the loan side ($1 billion or more each being originated this year by Lending Club, Sofi, and OnDeck Capital).

The writing is on the wall. The branch, as we know it, is on the way out (note 2).

But most banks have built their franchises by opening new accounts at branches. So what are the alternatives? There is no right answer as it depends on your strategies and customers, but here are some general ideas (note 3):

Provide state-of-the art online/mobile applications and onboarding (note 4)
Go after the kids of your current customers, then take care of them through major life stages so they never leave (note 5)
Increase your branded-ATM presence in your geographic footprint (apartment lobbies, large employers, etc.)
“Power the POS” with free card processing for your cards (if merchants steer customers to your card)
Partner with employers to provide banking as an “employee benefit” including a schedule of bank employee “office hours” for advice, help and limited transaction support
Focus on small and mid-sized businesses (including startups), and take staff directly to the business location
Drive traffic (foot and digital) to your merchant customers with relevant offers
Consider roving “mobile banks” that operate like food trucks, moving about the community and parking in high-profile locations (might as well sell cheese and bacon sandwiches too)
Participate in crowdfunding/P2P loan platforms to gather new assets (note 6)
Provide in-store/dealer financing (real-world and digital)
Co-locate with compatible service businesses (insurance, tax prep, real estate, etc.)
Have a presence at local events, festivals and street markets (portable ATM, water stations, bathrooms, etc.)
Get very involved in local real estate

I am not saying that all branches should be closed. Schwab proved that it pays to have at least one physical location in every major city. But branch costs need to be reduced fast.

It won’t be easy. Change is hard. Layoffs are VERY hard. And unproven digital strategies supplanting longstanding branch-based sales are risky. But I’m not sure there is any realistic alternative for the majority of financial institutions.

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Embedded image used with permission of Getty Images.

Notes:
1. It’s true that the same could be said about online or mobile channels. But, for the most part, the digital alternatives operate at a fraction of the per-user cost of branches.
2. It’s a 40-year process, however (see OBR 128, April 2006, subscription).
3. For 500+ ideas, see our annual planning report (Sep 2013, subscription).
4. See: Online Account Opening, OBR 168/169 (June 2009, subscription).
5. See: Youth Banking, OBR 194/195 (July 2011, subscription).
6. See: Crowdfunding, OBR 216/217 (May 2013, subscription).

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Fintech Four: Banno, Borro, Personetics & Auction.com are on a Roll

By Jim Bruene Posted on March 5, 2014
Categories: Loans & Credit, Mergers & Acquisitions, Personal Financial Management, Real Estate

It’s been a crazy week in fintech, and it’s only Wednesday morning. Because my brain can hold no more than four stories at a time (and that’s a stretch), it’s time to publish a “fintech four” mid-week. I don’t know which of these is more dramatic, so I’ll go in alphabetic order:

1. Auction.com joins the billion-dollar fintech club

I’m not sure everyone considers Auction.com a fintech play, but as an online asset sales platform (which moved $7 billion last year), it’s close enough for me. It just raised a fresh $50 million from Google Ventures at a valuation of $1.2 billion. So I’ll be adding Auction.com to our “Fintech billion-dollar club.”

>>> Metrics and more from Bloomberg here.

2. Banno acquired by Jack Henry

While we don’t know the $$ number, given the traction Finovate alum Banno had in the market (375 bank clients), and the relatively high valuations in the fintech space these days ($1.75 billion for Stripe), this must have been a pretty nice payday for the owners and investors in Iowa-based Banno (formerly T8 Webware). Founder Wade Arnold is staying on at Jack Henry and is super excited about his future with the Kansas City-based technology vendor.

>>> Press release

3. Borro borrows $112 million

In one of the biggest fundraising rounds in fintech history, U.K.-based Borro landed $112 million to further its high-end online pawn brokerage business. I met founder Paul Aitken last fall and was impressed with the product, which allows consumers to borrow against non-liquid assets, say, a Jacob Lawrence in the hall, at pretty high rates (3% to 4% per month). Until then, I had no idea there was a large, underserved (near prime?) market holding high-end assets (outside Downton Abbey anyway). Even so, I was shocked to see a $112 million round. While terms of the deal weren’t disclosed, I have to believe all or part of the money is debt, not equity. So I’m not going to add Borro to the billion-dollar club, yet. Apparently online lending is back!

>>> Average loan amount = $12k (against a $20k value)… see Press release
>>> TechCrunch breaks down the Borro loan process and metrics here

4. Personetics is on a roll

At this week’s great Bank Innovation event in Seattle, I finally had a chance to meet face-to-face with Personetics, the Sequoia-backed “predictive financial services engine.” I’ve been impressed with what I’ve read about the company, and loved the Fiserv demo at FinovateEurope last month (demo here) featuring a forward-looking PFM piece powered by Personetics. But I had no idea how much traction the company was gaining in less than three years since its A-round. While I can’t name names, if even one of these deals moves into production, it has the potential to change the face of online banking.

>>> Fiserv demo at FinovateEurope featuring insights powered by Personetics here (12 Feb 2014)

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Launching: Credible Will Refi Your Student Loans Through Cooperating Lenders

By Jim Bruene Posted on February 28, 2014
Categories: Launches, Student Loans

On Monday, Credible debuted its student loan refi platform at Jason Calacanis’s Launch Festival (see demo below). The demo was a judge favorite, with three of the five judges naming it their favorite among the eight demos in that session. And the company ended up taking home the trophy (and optional investment) as the best established company demo. The overall winner was Connect, an address book that maps your contacts from social networks.

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How it works
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The business model is similar to Lending Tree. Users answer eight questions, all from memory:

1. Do you have a PRIVATE student loan? (Yes/No)
2. What year did you graduate? (choose 2001 to 2012)
3. What was the last school you graduated from?
4. Do you have graduate or postgraduate degree? (Yes/No)
5. What is your approximate income? (slider $0 to $200,000+)
6. What is your approximate student loan balance? (slider $0 to $200,000+)
7. What is the approximate interest rate on your student loan? (slider 2% to 15%+)
8. What is your approximate credit score? (slider very poor/300 to excellent/850)

Close = Enter your email address to get results

At the end of that 60-second quiz, as soon as the email is entered, Credible displays the potential savings from a student loan refi.

Interested borrowers select the Switch Lenders Now button, download their actual loan info through account aggregation technology (the demo showed Intuit powering an account scrape of Sallie Mae), complete a short loan, and upload a scan of their drivers license and last pay stub.

That info is sent off to student lenders who make actual credit offers to the user within two to three days (see screenshot #2).

In the 24 Feb 2014 demo, using an actual student from their beta launch, the three competing lenders shown were (may not be real quotes however):

Wells Fargo at 3.75%
SoFI at 5.88%
CU Student Loans at 4.90%

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About Credible
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San Francisco-based startup launched in Feb 2014
Raised $500,000
30,000 borrowers registered during its beta test (carried out under previous incarnation, JoinStampede.com)
Founder Stephen Dash worked at JP Morgan Chase
Its goal is to move beyond student loans into “every bank and insurance service.”

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Bottom line
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As proven by the success of Sofi ($400 million funded) and the buzz around Finovate alum Tuition.io, the student loan market is ripe for new thinking (I won’t say disruption, because debt consolidation is hardly a new concept). That said, existing financial institutions can play in this game, and win if they want to. We believe customers would be more likely to refi if it was delivered by their primary financial institution within the secure online (or mobile) environment.

And the great thing about saving your up-and-coming customers a few grand each year is that they are hardly going to jump ship to save $5 per month on a checking account.

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Exhibits

1. Credible wizard results

2. Competing offers

Credible demo (will launch in separate window set to begin demo at the 1 hour, 56 min mark; 25 Feb 2014)

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Why the BBVA Simple Bank Deal is Extraordinary

By Jim Bruene Posted on February 24, 2014
Categories: Mergers & Acquisitions, Simple

I was on vacation when the Simple deal went down last week. So, today I read the 25 or so unique articles published Thursday and Friday on BBVA’s $117 million acquisition of Simple. Of the bunch, only Ron Shevlin dove under the covers as to why a global financial powerhouse plunked down nine figures for a relatively small prepaid debit card portfolio. His take: the brand.

I’ve been a huge Simple junkie, publishing 22 posts on the startup in the past four years. And I was delighted it chose to make its first industry appearance at Finovate in Fall 2011 (video here). But I’m even more excited about this deal, which was remarkable for several reasons:

Other than ING’s regulator-mandated divestiture of its U.S. unit to Capital One, this is the first major retail digital bank acquisition in the United States EVER. Yes, EVER. Since the dawn of what we called “Internet-only” banks in Oct 1995 (note 1), not a single one has been acquired at other than a fire sale (e.g., ING Direct purchase of Netbank after it was closed by the FDIC), (see note 2).
The revenue multiple was off the charts. Simple says it processed $1.7 billion last year. Assuming this was all debit card volume and they split the revenues relatively equally with their processor, The Bancorp Bank (which is Durbin-exempt, note 3), the startup generated somewhat less than $10 million in revenues last year. That’s not at all bad for a bank in its first full year of business. Founder Josh Reich says they were on a path to profitability, not a small feat for a tech company with nearly 100 employees.
Banks are usually acquired for some premium of their assets and deposits. Simple had zero financial assets since it only collected deposits. We don’t know their deposit totals, but with an average of 65,000 customers (note 4) making $1.7 billion in purchases, that means each spent about $2,000 per month. Let’s say that each of its 100,000 accounts held double that on average ($4,000), the bank had around $400 mil in deposits at year-end 2013. I’m not sure what banks are paying for demand deposits these days, but it’s not 25%.
Simple raised $18 mil since inception, but we don’t know at what valuation. But with the $117 million cash deal, it appears that investors were rewarded adequately. It was no 10x exit, but it could have been 2x to 3x, or more.
BBVA paid almost $1,200 per customer. Given that Simple’s entire funding amount of $18 mil had already generated 100,000 customers ($180 per customer), clearly acquiring this customer base was not the main driver of the valuation.

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What it means:

Moven, Holvi, Tink, Numbrs, and other digital-only banks will see a bump in their valuations.
Y-Combinator and other accelerators will see a surge in retail banking startups (which leads to more great Finovate presenters)
Simple under BBVA will be a fantastic case study with plenty of material for fintech bloggers and analysts (and especially blogging analysts)
There will be more legacy financial institutions following this strategy (clearly, there were other bidders to push the valuation above $100 million); however, don’t expect a stampede. Two or three acquisitions in 18 years is hardly a trend.
BBVA could very well make Simple its ING Direct-like brand (“BBVA Simple”?) across multiple new international markets (hat-tip to Venture Beat for being the only tech blog to focus on the international opportunity).
At least for a few years, before the founding team scatters to new ventures, it will be useful to have a semi-autonomous unit in Portland building out the services.

Finally, I’ll need a new VC-backed retail banking startup to obsess over. Time to get my Moven card activated.

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Notes:

1. The first pure digital bank was Security First Network Bank (SFNB) which was dumped for $13 mil in 1998 after attracting $50 mil in deposits and $14 million in credit card receivables).

2. One could argue that E*Trade’s ill-fated purchase of Telebanc for $1.8 bil in 1998 qualifies, but Telebanc was primarily a direct bank built through the phone channel.
3. Interestingly, as part of BBVA, which is not exempt from Durbin price controls (as far as I can figure), Simple’s interchange rate will likely fall dramatically, making the revenue multiple much higher going forward.

4. The bank started the year with 30,000 accounts and now has 100,000. So, assuming growth was even over the year, the average annual number of accounts = 65,000.
5. For more on pure-play digital banks, see our full Online Banking Report here (published in late 2011, subscription).

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Fintech Four: T-Mobile, Stripe, Andera & Balanced Payments

By Jim Bruene Posted on January 27, 2014
Categories: Account opening, Alt Payments, Crowdfunding, Prepaid/gift cards

Wow, it was a whirlwind of fintech news in the past seven days. Here are four stories that spiked on our fin-o-meter:

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1. Stripe’s $80 million funding
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It’s not so much the amount of the funding, though that’s one of the biggest C-rounds we’ve seen in the space, rivaling Square’s $100 million round in June 2011. But the jaw-dropping aspect was the valuation, a reported $1.75 billion, double what PayPal just paid for Braintree, which is far bigger than Stripe.

But as PandoDaily’s Carmel DeAmicis and Michael Carney point out, it was favorable terms (2x liquidation-preference) that substantially boosted the valuation. Regardless of the funny VC math involved, it was a monster round for the small company.

Clear winners: Stripe founders and early investors
Potential winners: Other payment enablers who now have access to more funding
Potential losers: Square, which could have bought Stripe at a much lower valuation; PayPal; and other acquirers who now face an even stronger competitor

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2. T-Mobile teams up with Bancorp Bank & Blackhawk Network for branded prepaid card
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An interesting play by T-Mobile – turning their 7,500 locations into cash-handling mini-branches – is its new Mobile Money prepaid card. I’m not sure that’s the business I would have entered if I were in charge, but it will be closely watched. If it’s wildly profitable (unlikely), it could put pressure on the entire U.S. branch banking system. More likely, its success will be moderate and will fizzle out in a few years when T-Mobile finds more lucrative ways to deploy its real estate and sales staff.

In any event, it will be closely watched by banks and non-bank retailers alike. (Potentially, T-Mobile could make more money reselling the consumer data from the effort, than from the prepaid business itself.)

Clear winners: Bancorp Bank (issuer) and Blackhawk (prepaid network)
Potential winners: T-Mobile (and other telcos that copy the strategy)
Potential losers: Wal-Mart, check cashing stores, and other players in the cash space

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3. Mobile account opening (MAO) used by 1 of every 4 Andera-powered applications
_________________________________________________________

Andera, the online account-opening powerhouse, this week published a useful report (free with registration) analyzing account-opening metrics across its 500 clients. The stat that caught my eye was the number of mobile applications already being received, despite the newness of the channel for financial transactions. One in four Andera-processed financial product applications are received from tablets or smartphones, up from one in 25 three years ago. And three-quarters of the mobile volume is from smartphones.

Clear winners: Mobile leaders
Potential winners: Andera and other account-opening specialists
Potential losers: Bank branches, which will continue to be a major (albeit costly) source of new account applications

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4. Balanced Payments crowdfunds $50,000 to launch new feature
_______________________________________________________

I am a big fan of crowdfunding and expect massive growth (note 1), but I never thought I’d see it used by a fintech company to fund a new feature. But Balanced Payments, a Y Combinator-backed payment-startup serving online marketplaces, successfully raised more than $50,000 last week in about a day (Crowdhoster campaign). That surpassed its goal for adding a “push to debit card” (Techcrunch post).

It sounds too good to be true. But the startup used a clever incentive system for backers: prepaid fees. In other words, Balance customers could pledge a few thousand dollars for the feature, and then that money paid upfront would cover a given amount of transaction fees in the future. And the more that was pledged, the cheaper the transaction fees became. And there was a large incentive to pledge at the $10,000 level (see below).

Here’s the earnings table:

>> $1,000 pledge receives 1,000 prepaid transaction at $1 each
>> $2,500 pledge receives 3,333 transactions for $0.75 each
>> $10,000 pledge receives 40,000 transactions for $0.25 each

You could also toss in $25 for a T-shirt.

So far, there are 26 backers (25 if you don’t count my T-shirt pledge).

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Note: For much more on crowdfunding (debt and equity), see our May 2013 report (subscription).

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The Billion-Dollar Fintech Club (private companies)

By Jim Bruene Posted on January 23, 2014
Categories: Metrics & Market Research

With Stripe raising $80 million at a $1.75 billion valuation yesterday, I was wondering how many other private fintech companies have reached that milestone recently. It’s not as many as I had hoped, but perhaps I’m missing a few. If so, please tweet @netbanker or email me since blog comments are broken (new system coming in Q1, really).

Pretty sure:

Square valued at $5 billion this month (Techcrunch)
Lending Club valued at $2.3 bil in late 2013 (Bloomberg)
Wonga has been discussed as a billion-plus company for several years and has annual profit in excess of $100 million (in Sep 2013 Wonga reportedly turned down a $1.6+ billion bid Sky.com post)
Stripe valued at $1.75 billion as of yesterday (Reuters)

Likely:

Klarna the Swedish ecommerce giant has raised $250 mil and has a $200 million annual revenue run rate; it recently made a 9-figure acquisition of Sofort (Techcrunch, 18 Dec 2013)

On their way (based on recent fundings):

Cardlytics has raised more $100 million and reported a $200 million annual run rate in Q4 2013
Credit Karma raised a $30-million series B in April to further its ad-driven free credit report business, which is one of the busiest financial websites and most popular iPhone app (other than the big retail banks) (Finovate post)
On Deck Capital raised $42 million in early 2013, bringing the total to $102 million, and projected $80 to $100 million in revenues for 2013 (Venturewire)
Paydiant has raised more than $30 million and is powering payments via Subway’s mobile app; looking at Stripe’s $1.7 bil valuation, it seems plausible that Paydiant is closing in on the billion mark
Ping Identity — it can be hard to evaluate security plays because there often isn’t much transparency into their traction, but based on Ping’s $78 mil raised, including $44 mil in July ($15 mil of that was debt), they must be doing something very right (Finovate post)
Prosper had one-quarter of Lending Club’s loan-origination volume in December, making them potentially worth more than $500 million based on the Lending Club $2+ bil valuation
Sofi, with $300 million lent to prestige college grads, it could be the Lending Club of high-income 20- and 30-somethings

Made it (recently went public/acquired):

Xero, the New Zealand-based cloud accounting company, is valued at US$4 bil on NZ market
Qiwi PLC, the Russian payment giant, went public in May 2013 and is currently valued at $2 bil (Nasdaq)
Lifelock went public in Oct 2012 and is currently worth $1.8 billion, it recently acquired Lemon to bolster its mobile identity-protection services
Trusteer, the online security company, sold to IBM for $1 billion in 2013
Climate Corp (formerly Weatherbill), a weather insurance play, sold to Monsanto for $930 mil in Oct 2013 after raising $107 mil (Forbes)
Braintree sold to PayPal for $800 million, $200 mil shy of the “club,” but not too shabby

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Picture credit: Fakemillion.com

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BillGuard Brings Email-Like UI to Mobile Banking Transaction Flow

By Jim Bruene Posted on January 22, 2014
Categories: Credit/Debit Cards, Mobile Banking, Personal Financial Management, UX

The ink wasn’t dry on my 2014 wishlist, when I got a message from BillGuard founder Yaron Samid, informing me that its new mobile UI was already doing what I’d most hoped for:

Wish #1: A Gmail-like priority inbox/feed for my financial transactions.

It’s as yet not quite Gmail-level functionality — for example, I’d like more tagging options than just “flag for later” — but compared to the state-of-the-mobile-art today, it’s pretty awesome. Thanks to BillGuard for getting the year off to a great start (note 1).

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How it works
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BillGuard aggregates credit and debit card transactions and flags suspicious items for review (see previous posts). So in that way, it has always acted like the Priority Inbox function within Gmail. However, its desktop UI looks more like a traditional PFM than an email inbox.

But for the smartphone, BillGuard has dramatically changed the interface. As you can see in the inset, they use “Inbox” as the name of the transaction register. There is even a red bubble showing how many new charges are available for review (see inset right).

The five primary items on the main screen:

Large green “card” >> Summarizes current month’s spending across all aggregated cards (you can also swipe through the individual cards)
Inbox >> New transactions and any that you’ve flagged for followup
All >> All transactions in a single infinitely scrolling list (I have 1,000+ transaction going back three years, and I can scroll through all of them in less than a minute). You can look at all transactions or just the recurring ones.
Analytics >> Month-over-month spending graphs
Savings >> Merchant-funded offers

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More on the UI
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1. Inbox view (click screenshot for a larger graphic):

Transactions are sorted with suspicious and unknown merchants listed on top and new, unviewed transactions below
Users can choose the right “Follow Up” tab to view only those transactions they have flagged for followup (see #x below)
User can swipe the transaction right to move it out of the new transaction inbox, as shown in the green “Metropolitan Market” transaction at right

2. Transaction detail

The transaction “card” contains expanded info on known merchants such as full name, location, and URL
There are three key buttons:
A. Green checkbox to okay the transaction, removing it from the inbox
B. Orange “followup” button to keep the transaction in the pending list for later review
C. Small gray box in upper right with a number that indicates how many transactions you’ve had with this merchant; clicking it brings up the list of all (10 in this case)

3. Merchant offer

Based on my transaction history, a discount offer from Target is displayed; clicking the green button brings up redemption options, in this case:
– Email offer
– Shop now

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Notes:
1. The mobile UI was actually released in the latter part of 2013.
2. Screenshot at top of post is an iPhone notification.

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New OBR Published: Digital Banking Forecast Through 2023

By Jim Bruene Posted on January 15, 2014
Categories: Metrics & Market Research, Online Banking Report

Alright digital banking fans (note 1), it’s that time of year again for our annual look-back at the previous year, along with a fearless forecast for the rest of the decade and beyond.

The report, Digital Banking Forecast: 2014 to 2023, includes our take on future U.S. household penetration levels of online banking, mobile banking and billpay. While online banking has been relatively flat, with low-single-digit growth, mobile has exploded, expanding ten-fold in the past 5 years and now reaching about one-third of U.S. households. We are four or five years away from the tipping point where more households bank via smartphone than by desktop.

It also includes a revised 10-year forecast for U.S. peer-to-peer lending. After growing almost eight-fold in the past two years, we expect continued strong growth of 30% compounded annual through 2023. And with the expected blockbuster IPO of Lending Club (note 2), the area will receive a LOT of attention in the press this year.

Finally, we update our list of top-10 project priorities for 2014.

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Top developments of 2013
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The report includes a summary of the top-10 developments during the year (in alphabetic order):

Bitcoin proves there is demand for a global virtual liquid asset
Coin’s programmable credit card is a viral hit
Crowdfund investing, both debt and equity, gains serious traction globally
Mobile-first banks such as GoBank, Moven and Numbrs arrive on the scene
Mobile login gets simplified at Bank of the West, Capital One, GoBank and others
P2P lending moves beyond a niche as Lending Club originates $2 billion
Photo billpay launches at US Bank and First Financial
Regions Bank adds time-based fees to remote mobile deposit
Square and Google enable true email-based peer-to-peer payments
Yodlee shows the power of mobile in financial collaboration with Tandem

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New entrants into the OBR Hall of Fame
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Each year we rank the top online/mobile innovations of all time (North America). A total of 50 achievements are listed from 51 companies:

18 banks
5 credit unions
11 non-bank financial services companies
17 fintech companies

Two new entrants were added this year:

Capital One’s non-alphanumeric mobile login, SureSwipe
Yodlee’s mobile financial collaboration tool, Tandem

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About the report
__________________________________________________________________

Digital Banking (Online/Mobile) Forecast (link)
The next 10 years: 2014 through 2023

Author: Jim Bruene, Editor & Founder

Published: 9 Jan 2014

Length: 36 pages, 29 tables, 13,500 words

Cost: No extra charge to OBR subscribers, US$495 for others here

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Report excerpts:

Left: GoBank and Moven set the mobile bar high
Right: 10-year P2P lending forecast

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Notes:
1. Can we agree that “digital banking” equals online and/or mobile banking?
2. Lending Club could be the biggest fintech startup IPO of all time.

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Moven Offers Free Ride, but Only to New Uber Customers

By Jim Bruene Posted on January 13, 2014
Categories: Email Marketing, Email Samples

Despite more holiday hate over surge pricing, Uber is one of the more high-profile up-and-coming digital brands in the world. As the new year dawned (3 Jan 2014), Moven ran an eye-catching promo offering a free Uber ride (up to $30).

I flagged the email because I thought it was a great activation move. Moven appeared to be offering me $30 to get moving and complete my new account authentication (note 1). And more importantly, to get my Moven card in play in an app that offers a future stream of interchange revenues.

But unfortunately, the offer is limited to new Uber customers only (disclosed in small type at the bottom, that’s my red arrow in the inset). And surprisingly, it appears that you can enter any credit/debit card number into the signup form as it’s not Moven-specific.

Here’s a quick rundown of the pros and cons of the promotion:

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Analysis
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1. Offer
Good: Free Uber ride is cool and valuable and a good company to associate with the Moven brand. The $30 offer beats what Uber served me on a Google search by $10 (see second screenshot below).
Bad: A significant number of those interested in the offer will already be Uber customers and unable to participate (note 2).
Fix: Allow existing Uber customers to participate (perhaps with a lower dollar cap); if that’s not economically feasible, it’s time to showcase a more prominent “new Uber customers only.”

2. Fulfillment
Good: Encourages users to enter their Moven card number into the Uber app.
Bad: The form, and offer, can be used with any credit/debit card.
Fix: Require the ride be charged to the Moven card to qualify for the free credit.

3. Design
Good: The email design was attractive and easy to read in a desktop browser window.
Bad: Headlines were good, but copy and fine print were not readable on a mobile (iPhone 5) without zooming (see inset above).
Fix: Design for mobile window

Bottom line: Despite these drawbacks, it’s still a good promo. And its cost to Moven is likely zero (note 3), a very important factor for a startup. So I’d rate it a B+ overall in terms of execution, but an A for value (to Moven), assuming Uber picked up the tab.

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Email from Moven (3 Jan 2014)
Note: Displayed in iPhone 5

Google offer under “uber” search (2 PM from Seattle IP address, 14 Jan 2014)

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Image source: Placeit

Notes:
1. I signed up as soon as I got a Moven invite, but I got caught in the authentication loop, still needing to find those trial deposit-amounts and feed that to Moven.
2. Also the fine print says “new users only.” Originally, I took this to mean “new Moven users” since the message came from Moven, and I was new to Moven and not new to Uber.
3. It’s highly likely there was no cost to Moven, and it’s possible the startup is earning a commission for each new Uber customer.

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Mobile Monday: Reminding Customers to Make Mobile Number Primary

By Jim Bruene Posted on January 6, 2014
Categories: Capital One, Mobile Banking, Service

Now that mobile is on its way to becoming the dominant banking interaction channel, we are going to obsess on the nitty-gritty details this year, both here and in our Online Banking Report newsletter.

First up: How to get better mobile data into your CRM. By now many (most?) readers do a good job grabbing mobile numbers during new customer onboarding. But are you doing the same with existing customers? And even if you have a mobile number on file, is it the primary phone number on the customer’s account?

Capital One 360 (formerly ING Direct) is reminding customers at login to take a look at their account info on file. And furthermore, the bank has added a small reminder to make your mobile number primary, if desired (see screenshot below).

Bottom line: Having the best primary phone number is a small, but important, part of servicing customers effectively. My only quibble with Capital One’s implementation is that the reminder is easy to overlook as it’s buried mid-page in a small font with a blue “i” graphic. A more dramatic graphical treatment would improve the results.

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Capital One 360 login reminder page (30 Dec 2013)

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Image source: Mobile First webinar by Ken Fang posted on Howto.gov

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My 2014 Wishlist for Digital Financial Services

By Jim Bruene Posted on January 2, 2014
Categories: Strategic Planning

Like most people, I speculate on the future all the time. But unless specifically asked, I gave up making a laundry list of predictions for the new year. While it’s fun for the writer, it’s often a mixed bag for the reader.

It seems most predictions are either obvious and therefore boring (“We’ll see an ever-increasing shift to the mobile channel”) or moon shots that are provocative but totally random (“Square will buy a bank and tweet its call report every quarter”).

That said, I do have a wish list for the new year. But don’t confuse these with predictions. In fact, this list is the complete opposite. I hereby predict none of these will happen in 2014. Banks and regulators, prove me wrong!

1. Gmail-like priority inbox/feed for my financial transactions

2. Hybrid loans that blend bank financing, P2P, and friends & family funds (blog post coming soon).

3. No login option for mobile access to my primary bank accounts (Chase, BofA, US Bank, Capital One, Wells).

4. No more telephone calls (and cryptic voicemails) from the fraud department at my credit card issuers. Instead, in its place will be two-way text messaging (thanks Citibank and Discover for adopting this practice in late 2013).

5. Fraud insurance on my business banking accounts paid for as a percent of assets (e.g., $5+ per month per $50,000 covered with a $5,000 deductible).

6. Let non-accredited investors participate in regulated and transparent crowdfunding sites (just copy the U.K. model please; see our May 2013 Online Banking Report).

7. Open up competition by regulating P2P lenders as lenders (what a concept!), not as securities issuers (an SEC-driven over-correction in the aftermath of the 2007/2008 crash).

8. The Amazon/Kayak/Hipmunk/Expedia of insurance so I can find and purchase everything in one place.

9. Bring Pay As You Go auto insurance to Washington State (my post).

10. Eliminate financial price controls (Durbin, I’m looking at you) and focus regulatory efforts on transparency, open markets and level playing fields.

11. Smartphone-controlled power outlets (wait, that already exists).

Good luck getting back in the groove everyone!

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Holiday Website Promotions at the Top 20 Banks

By Jim Bruene Posted on December 26, 2013
Categories: Advertising & Promotion, Holiday promotions

Banks have ratcheted up the design aspects of their websites substantially during the past 18 months. But in my annual look at holiday website designs, I found little change over past years. Only nine of the 20 largest U.S. banks displayed any holiday graphics or promos this year. That’s one more than last year, but still one less than 2010.

Here’s a rundown of the 2013 holiday UIs:

Once again PNC Bank led the pack with its three-decades-long holiday CPI (Christmas present index). Zions Bank and Comerica (with the same promo as last year) were decked out in full-screen holiday graphics. Union Bank, BB&T, US Bank, TD Bank and Wells Fargo also displayed notable holiday imagery. Chase just hinted at the holidays, earning a single bulb.

Many smaller banks and credit unions post creative holiday imagery. For example, Austin, TX-based Amplify Credit Union ran four holiday elements on its hompage on Christmas Eve (see last screenshot).

The scrooge list: top-20 banks with no holiday promotions or graphics on 24 Dec 2013:
Bank of America, Bank of the West (BNP Paribas), Capital One, Capital One 360 (formerly ING Direct), Citizens (RBS), Fifth Third, Harris Bank (BMO), HSBC, Key Bank, SunTrust, Union Bank (Mitsubishi UFJ)

Following is a quick overview of the promotions, including a 1- to 5-bulb rating.

Previous year-end holiday posts: 2012, 2011 (big banks), 2011 (CUs/community banks), 2009 part 1, 2009 part 2, 2007, 2006, 2006, 2004

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Big banks in the holiday spirit
(rated from 1 to 5 bulbs; screenshots from Tuesday morning, 24 Dec 2013)

PNC Bank

Animated Gift Maker tied to its annual 12 Days of Christmas CPI price index (which it’s published for 30 years)
Visa Gift Card promo (lower left)

Score:

Hompage: PNC is leading with its Gift Maker and 12 days of Christmas price index

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Comerica

Large gift card in main promo area (#3 in 4-promo rotation) with engaging holiday graphics
Gift card promo in bottom center position with green background

Score:

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Zions Bank

Default “Merry Christmas” message with holiday graphics across the page (#1 of 4-promo rotation)

Score:

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Union Bank

Rewards credit card (#2 in 3-promo rotation)

Score:

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BB&T

Checking account promo with holiday graphics
Small Visa gift card promo near the bottom of the page

Score:

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TD Bank

Holiday budgeting tips

Score:

Homepage

Landing page

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US Bank

Customers (1st screenshot) saw some PFM messaging, the “Holiday money manager,” which was touting the bank’s online banking and alert functions (U.S. Bank does not offer advanced PFM functions)
Non-customers (2nd screenshot) saw a “Tis the season” checking-account promo

Score:

Hompage displayed to visitors known to be customers (via cookies)

Homepage displayed to non-customers

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Wells Fargo

Holiday message in lower left (below the fold)
Plush pony for opening new account

Score:

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Chase Bank

Credit card offer: “Save on holiday balances and new purchases”

Score:

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Bonus standout: Amplify Credit Union

Holiday bells integrated with logo
Skip-a-payment promo to free up holiday cash, with humorous holiday graphic
Holiday closures schedule
No payments until 2014 on auto loans

Score:

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Notes:
1. Observations taken between 9 AM and Noon, Pacific Time, on Tue, 24 Dec 2013, from Seattle IP address, Chrome browser with cookies cleared
2. Animation from http://www.millan.net/anims/christmas.html#

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