It’s Holiday Loan Time

MembersPlus Credit Union Holiday Loan Promotion (#2 of 3 in rotation)
MembersPlus Credit Union Holiday Loan Promotion (#2 of 3 in rotation)


I’ve been slightly obsessed with holiday-themed marketing, actually the lack of it, over the years. It’s not that I think putting a bow on your website will magically improve your return on equity (ROE). It’s that by not doing anything, it seems like you are just not trying. You put holiday decorations up in branches, why wouldn’t you extend that same thinking to your digital look and feel?

And it doesn’t have to be an extra cost (like those in-branch decorations). You can push holiday-themed promotions to cover the costs of the website changes and then some. One example, primarily offered by U.S. credit unions, is the so-called Holiday Loan (see other examples in our past coverage). These are small (usually under $5,000, sometimes just $1,000) unsecured installment loans to help families with surging holiday expenses. These loans typically must be repaid within 12 months so they are not outstanding next Christmas.

In poking around the web this afternoon, we saw a number of examples at credit unions (and the lone bank). My favorite was this promotion from MembersPlus Credit Union, a 10,000-member CU in the Boston area. Its Holiday Loan is currently featured on the homepage with a good supporting holiday graphic. The 7.99% APR is fair and undercuts most bank revolving credit and the 1-year payback schedule is good for helping members repay the debt before it becomes a burden a year from now. The maximum loan amount is $5,000.

Have a great weekend and don’t forget the hot chocolate!

The MemberPlus homepage currently display an eye-catching promo for its upcoming Member Appreciation Days (promo #1 of 3 in rotation).
The MembersPlus homepage currently displays an eye-catching promo for its upcoming Member Appreciation Days (promo #1 of 3 in rotation).

Marketing: Bank of America Reinforces Digital Banking Features, Benefits spokesperson "Captain Obvious" spokesperson “Captain Obvious”


Sometimes, the most obvious things are easiest to overlook. For example, despite the importance of mobile (and desktop) functionality for website visitors, some banks, even major ones (Chase I’m looking at you), don’t bother to reinforce their features and benefits. That is probably less of an issue for big brands where most customers assume state-of-the-art digital features are readily available. But community banks and credit unions should have mobile and/or online banking listed in primary or secondary navigation. US Bank has always been good at doing just that.

Recently, BofA has been promoting its online/mobile features with a homepage promotion (see screenshot #1 below). I first noticed it while paying my BofA card Friday, but I don’t know how long it’s been running. Clicking the See popular features link delivers you to a page touting features across three categories: Manage Accounts, Payments and Transfers, and Security. The first five are visible on screenshot #2 below:

  • Set up a travel notice (currently the featured feature across top-half of screen)
  • Check your FICO score
  • Redeem credit card rewards
  • Update your contact info
  • Set up custom alerts

The other 11 (not shown in screenshot):

  • Replace card
  • Go paperless
  • Direct Deposit
  • Reorder Checks
  • Bill pay
  • Transfer and send money
  • Pay with a digital wallet
  • Mobile Check Deposit
  • Lock or unlock your debit card
  • Fingerprint sign-in
  • Security Center

Note: I’m surprised Bank of America’s “deals” aren’t one of the 16 features highlighted. Even though you can’t really make it out, the mobile phone at the top of the landing page (screenshot 2) has the BankAmeriDeals section open along the bottom (note the Starbucks logo).

Bottom line: A good explanation of digital features and benefits should be easy to find on your website and mobile app. Even though the features seem straightforward to power users like yourself, it’s all a big mystery to 95+% of your customers who just want to spend as little time as possible banking.


Bank of America invites customers to check out its digital features.
Bank of America invites customers to check out its digital features


Bank of America's extensive digital features explainer.
Bank of America’s extensive digital features explainer (link)

Friday Favorites: Financial Institutions Honor Veterans

If there’s one thing Americans can agree on, it’s honoring and celebrating the service of our veterans both past and present. Given the contentious election week in the United States, you’d think U.S. financial institutions would be rolling out the red, white and blue on their websites on Veterans Day today. But there was surprisingly little activity at the major banks. Most had the same old-same old on their homepages. Even Navy Federal Credit Union passed on adding anything extra for the day.

The only top-50 banks with Veterans Day graphics were Bank of America, Zions and of course USAA, all displaying page-dominating graphics on their homepages (see below). We also looked at a few credit unions (at random) and found BMI Federal Credit Union and PenFed honoring vets (see below).

Zions bank homepage featuring Veterans Day homage
Zions bank homepage featuring Veterans Day homage (11 Nov 2016)


USAA homepage on Veterans Day (11 Nov 2016)
USAA homepage on Veterans Day (11 Nov 2016)


Bank of America Veterans Day image on homepage (11 Nov 2016)
Bank of America Veterans Day image on homepage (11 Nov 2016)


PenFed Credit Union homepage on Veterans Day (11 Nov 2016)


BMI Federal Credit Union leads with a Veterans Day announcement (11 Nov 2016)

Mobile UX: A First Look at “Second Look” Transaction Alerts from Capital One


A paradox of the early digital banking era (1995 to 2007) was: Why is Capital One a laggard? The new company (spun out from Signet Bank in 1994) was widely revered as a data-analytics and marketing master. But it was practically a digital no-show for more than a decade, offering just a minimum level of functionality online. As recently as 2010, Capital One was the last major bank to launch a native mobile banking app.

Fast-forward six years. Capital One owns the innovation mantle, at least in the United States. It has Capital One Labs; it runs an innovation center in the Bay Area; and it now offers the most advanced set of mobile apps in the card-issuing business.

Its latest innovation? The first proactive service from a major issuer that alerts cardholders to deviations in spending with recurring charges. It’s called Second Look, and it certainly deserves one.

I was introduced to the new feature this week when I received a notification on my iPhone alerting me to a spending increase on my power bill (screenshot 1 below). After swiping through it and logging in via TouchID, the app displayed a chart showing how much my bill had increased last month (screenshot 2). And I was asked whether I was OK with the charge or not (bottom of screenshot 2). If not, the bank provided instructions on how to dispute the charge (screenshot 3). Customers can also elect to receive the alerts through email.

Another thing I really appreciated: The bank gave me enough info in the notification to make an intelligent decision whether I even needed to log in. The bane of the mobile-user experience is dealing with (ultimately ignoring) all the false positives you get through most notification services. I clicked through the notice out of curiosity. But thanks to the detail, I already knew that the $14 increase wasn’t a major problem.

Bottom line: This is just one example of a more proactive approach to helping customers deal with day-to-day finances. It’s still a relatively manual user experience, especially if you want to dispute a charge. However, as banks layer AI on top of their data hordes, outside APIs, and location-based info, we’ll see much, much more. Kudos to Capital One for leading the way.

(1) Second Look notification from Capital One
Exhibit 1: “Second Look” notification from Capital One


Exhibit 2: Second Look transaction analysis
Exhibit 2: Second Look’s transaction analysis


Exhibit 3: Second Look's taking action screen
Exhibit 3: The manual process to dispute a Second Look-flagged charge







Launching: “The Guarantors” Helps NYC Renters Qualify for an Apartment


As a blogger/analyst/entrepreneur, it’s a mixed blessing when someone delivers on a market need you’ve been ranting about (here and here). You feel vindicated and you have a blog post that writes itself, but it knocks one thing off the top of your businesses-to-start list.

So begrudgingly, I introduce you to The Guarantors, an N.Y.C.-based startup that is stepping up to meet the needs of renters trying to qualify for an apartment in New York City, and eventually other markets such as Boston, Chicago and California. I was directly involved in one such qualification excercise two months ago.

The company essentially acts as your parent (if your parents could fill out reams of paperwork within 12 hours, were extremely well heeled and backed by surety bonds), stepping in to co-sign and guarantee your rental agreement. To make landlords trust the stand-in parent arrangement, the startup backstops its guarantees with insurance from The Hanover Insurance Company. If the renter does not fulfill the terms of the lease, The Guarantors, makes the landlords whole. It is a brilliant idea, and perfect for financial institutions to license or build themselves.

The only problem is cost. Depending on risk profiles, The Guarantor charges U.S. citizens 5% to 7% and international renters 7% to 10% of the annual rent, about 3 to 4 weeks’ rent to backstop a 12-month lease; leases up to 18 months are a higher rate). But by eliminating deposits that can equal that amount or more, it can be cash-flow-positive to the renter. Though, unlike a deposit, that money is gone for good. So it doesn’t help first-time renters without the initial cash surplus of two-month’s rent. However, a financial institution offering the service could loan the renter all or part of that. There is no cost to the landlord.

The company, currently operating in NYC, is open only to renters with a 630 or higher FICO score and annual income at least 27x the rent. Alternatively, the company allows co-signers with at least 45x the monthly income, or liquid assets of 75x the monthly rent, to guarantee the guarantee. Applications are approved with 12 hours.

The company launched in 2014 and spent 18 months nailing down the insurance deal with Hanover. It has taken a seed investment of an undisclosed amount from nine investors (50 Partners, Alven Capital, Arnaud Achour, Fides+Ratio, Kima Ventures, Partech Ventures, Residence Ventures, Silvertech Ventures and White Star Capital).

Bottom line: Renter financing/assistance is a promising new lending/customer service for financial institutions. You not only get new customers, new loans, new checking accounts, a foothold in the millennial market, a unique service to offer employers, satisfied renters (and their parents), but also become a local hero with write-ups in every newspaper, blog, and housing forum in your market. And, with a phone call or two, you will be on the nightly TV news every fall when it’s “apartment hunting” season.

Contact The Guarantors now and offer to be their first distribution partner outside New York City, or their first strategic investor. And if you are Wells Fargo, Capital One, American Express, or Chase, just buy them outright already.

Have a fantastic weekend all!

US Bank’s Way-Too-Long Customer Survey


A few months ago I received an email (above) from US Bank where I’m a long, long-time customer. It was a simple request for my opinion on the bank’s products and services. I was slightly put off by the wordy intro, which concluded with a 31-word sentence telling me how important my opinion was. But that’s just the editor in me. As I was about to press the Begin Survey button, I noticed that I was about to enter a 25-minute questionnaire hell. That was all I needed to know, I left it undone and went on to other things.

Twenty-five minutes! That’s just too long for any normal customer. Ideally, keep online surveys to 5 minutes at most or you risk losing the attention and thoughtful answers of your respondents. If you really need a half-hour of your customers’ time, provide some type of thank-you gift, even if it’s just a chance to win $500. Otherwise it’s almost insulting to ask for that much time with no reciprocation.

Bottom line: While you are not going to lose customers with a lengthy survey, you probably won’t get valid results due to so many dropouts. But you most certainly will irritate a good portion of the recipients. Don’t do it.


Is Money the OS for Living?

os-logosSince the day I started writing about financial services 21 years ago (yikes), people have asked me if I’m running out of things to write about. Most people can’t imagine how you’d write four paragraphs on banking innovations, let alone 40,000. But running low on ideas is the least of my concerns. The underlying topic, money, is massive and ever-changing with new technology, regulations, and consumer tastes.

Money impacts us every single day. And for most people, it’s an almost 24/7 pursuit, and defines what they do all day, where they live, who their friends are, how they spend their leisure time, how happy they are (up to $75k annually in the USA anyway), and even how long they live. So if you are in the business of managing money, be it storing it, spending it, maximizing it, or protecting it, you have a vital role.

It’s not a perfect metaphor, but you could call money the operating system (OS) of living. That’s probably overly tech/hipster, but then again that’s what we do for a living. And if money is the OS, then payments, insurance, wealth management, and so on, are all apps running across it. Which kind of makes sense in a Friday afternoon way of thinking.

What does that mean for running your financial services business? YOU ARE SO FREAKING IMPORTANT IN YOUR CUSTOMERS’ LIVES! That’s a blessing and a curse. They can’t live without you, which is great for revenues, but you also can’t afford big mistakes. That means service, security, trust, user experience all have a higher bar than the average tech or service company. And that’s expensive.

But thank goodness for mobile. It’s a miracle device in so many ways. But aside from chatting and photo sharing, its biggest impact could be on financial matters. Mobile is a free, 24/7 connection to money. That could be disconcerting, especially for the majority of consumers with money worries. So it’s the job of the bank, credit union, PFM provider, to use that connection to ease anxiety, rather than exacerbate it.

But that’s no easy task, given that money is the one of the biggest sources of anxiety in the country, accounting for three of the top-10 worries according to a 2015 study conducted by Chapman University (Hi Charlie). Unlike many posts, I don’t claim to have an answer here. But there are strides being made by pioneers who harness spending data to let customers know how much “free cash” they have at the moment (e.g., Simple’s Safe to Spend) or where they stand on their monthly budget (e.g., Moven and Capital One’s new Inform app) as well as chatbots that have your back (e.g., Bank of America’s chatbot Erica demo’d this week).

It’s a great time to be a bank/financial technologist. Enjoy making a difference!!

Video of the Week: Bank of America Demos AI Chatbot “Erica”

Via a chatbot named Erica, Bank of America this week demo’d its upcoming mobile AI capabilities. The feature will be available to the 21 million users of its mobile app via voice or text commands “in late 2017.” While it’s unusual for a major bank to discuss technology a year away from deployment, with all the hype around artificial intelligence and chatbots, BofA must have figured it was a good PR move.

The bank did not disclose whether it was building or buying the technology, but my guess is the latter. We saw a number of Finovate demos last month in this area and expect many more in 2017.

For more info, check out the American Banker story yesterday (free access).

Useful UI: The Dashboard Metaphor


Every now and then a useful term comes into widespread use and it can be hard to decide whether it’s a fad (e.g., home banking) or something that will be around for decades (e.g., ATM). Dashboard is a term we are seeing more and more of. While it’s too soon to say if it will still be around in the next decade, let alone in 50 years, it’s a good word in wide use in consumer and business services today (see definition below).

Redfin’s homeowner dashboard

Redfin, for example, sends new homeowners an email suggesting they log in to the Owner’s Dashboard of their new property. Redfin must be matching home-buying records to its user database to make the connections. It’s a nice touch. Who wouldn’t want to sit in the virtual driver’s seat of their most important asset and get a look around. And with home prices appreciating in most parts of the country, it’s a mighty fine view. In the example, the home value is up almost 15% since February.

Banks should consider using similar language for their advanced digital banking services. Rather than a fancy name to confuse consumers, use Dashboard, which is not only easy to remember, but also has all the right connotations. One major bank already doing so is BB&T (see below), with its unique customizable mobile and desktop service, U. Another is Ohio-based First Financial Bank as well as $88 million Gateway Community Bank (screenshot below).


BB&T's U digital banking is centered around a "Dashboard"
BB&T’s U digital banking is centered around a “Dashboard”


Bottom line: The name of a digital service isn’t going to make or break it. But as we struggle with educating users on the features and benefits, the use of known terms can ease the learning curve.


Gateway Community Bank homepage with news of its new "Dashboard View"
Gateway Community Bank homepage with news of its new “Dashboard View”