Author: Jim Bruene

U.S. Bank Integrates Self-Service Collection Module into Online Banking

By Jim Bruene Posted on
Categories: Loans & Credit, US Bank

image One benefit of running a financial services publication is that my own financial mistakes can be used for editorial material. My latest faux pas resulted in learning first-hand about U.S. Bank’s self-service collection module integrated into online banking.  

The details: Apparently, last month I hit negative $300 in my business checking account during some intra-day moment. The daily closing balances never fell below a healthy balance, so I didn’t realize an automatic “overdraft” transfer from our credit line had occurred (note 1). 

Since I assumed it was unused, I never looked at the credit line statement, and therefore neglected to pay it off or make the minimum payment. Then yesterday, when I went online to pay a bill, I noticed a new line item on my account ledger, Payment Assistance Options (see first screenshot below). I know that if my bank is offering to assist me with my payment, I’m in deep trouble.

I followed the link to where a well laid-out module took me through my options to pay back the delinquent loan (see screenshots 2 and 3). I paid off the $300 plus an extra $39 for the late fee, $3 for the overdraft fee, and a $2.79 finance charge. That’s $44.79 in penalty fees, pretty expensive for a 42-day $300 loan (note 1), but low cost for a blog entry.

Bottom line: The self-service collection module is a good addition to online banking and should save the bank costs in routine collection efforts where the user simply forgot to make a payment. Even though I hated the $39 late fee, I’m glad the delinquency didn’t progress further until it landed on my credit report.

1. US Bank main account management page showing collection function (29 July 2009)

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2. Landing page outlining collection options

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3. Promise to pay page
Note: Can pay by Web, mail, express mail,

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Note:
1. Yes, closer monitoring of our checking account transaction register would have identified the transfer. But like many business owners, I prefer to spend time in other areas of the business.

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1,000th iPhone Finance Application Added to Apple App Store Today

By Jim Bruene Posted on
Categories: Apple, iPhone, Mobile Banking

imageToday marked an Apple App Store milestone of sorts, the 1000th application available in the Finance category (USA store). Finance is less than 2% of the total store, which now stands at 63,300, according to AppShopper.com. 

Lucky number 1000 was Easy Mortgage (iTunes link), a $0.99 mortgage calculator from Italian developer Nexus (screenshot below).

image Four other new Finance apps debuted today, just missing the 1000 mark: 

  • #997 MLM: A multi-level marketing guide from PTAJ Marketing for $2.99
  • #998 Renting: A guide to renting a house or apartment from also from PJAT Marketing for $2.99
  • #999 Forex: A guide to foreign exchange trading again from PJAT Marketing
  • #1001 TaxTax: A $1.99 sales tax calculator from Canbuffi Web Development

Bottom line: These thousand apps are just the tip of the iceberg for the Finance category. It will likely grow to well over 10,000 during the next few years as most major banks and credit unions add their own apps to the mix. 

Currently, there are fewer than 50 financial institutions with their own dedicated app, including eight of the top 15 (most popular based on recent download volume): 1st (Bank of America), 2nd (Chase), 3rd (Wells Fargo), 4th (PayPal), 8th (E*Trade), 12th (Citibank), 13th (USAA) and 14th (multiple banks via Firethorn).    

For more info on the features and benefits of a good financial institution iPhone app, see our recent Online Banking Report: Mobile Banking via iPhone (March 2009). 

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Bank of America Implies that Branch Network Could Shrink 10% in Next Three Years

By Jim Bruene Posted on
Categories: ATMs, Bank of America, Branch Banking, Metrics & Market Research, Mobile Banking

imageIn what will surely be the first in a long string of similar headlines, the top of  yesterday’s Wall Street Journal Money & Investing section declared:

BofA Plans to Cut 10% of Branches

The article, which has been picked up by nearly 100 news sites in the past 24 hours, reported that Bank of America was planning on reducing the size of its 6,000-branch network. There were no details on timing or whether the bank was retreating from certain markets or was simply pruning overlapping branches broadly.

But in later interviews with bank execs, it sounded like Bank of America was merely predicting a gradual shrinkage in its branch network over the next three years, and had no firm plans for specific closures. Here’s a followup quote from president Liam McGee as reported by Charlotte NPR station WFAE:

“I think <CEO Lewis> was asked a question, ‘Boy, could there be x-percentage less branches in the next few years?’ And he was just saying, ‘Yeah, could be, and if there was it would be in magnitude of this as opposed to a much higher number.'”

McGee says the bank is going through a 3-year evaluation process that could result in fewer branches, but that no particular number is targeted. He says customers’ changing habits are driving the process.

What I found more interesting in the debate were some of the numbers the bank tossed out showing the growth of it’s non-branch delivery:

  • Nearly 50% of deposits are made in ATMs…up amazingly from 33% six months ago. The bank didn’t say whether this was NUMBER of deposits or VALUE of deposits, but it’s likely the former. Also, it’s unclear if remote deposits made via scanner are included in the total. That new technology is making a significant dent in branch-based deposits at many financial institutions.
  • 2.8 million customers are now using the mobile channel which was introduced in mid-2007. That’s an average of about 120,000 new customer per month. However, growth appears to have accelerated slightly this year. In early Feb, the bank said it had 2 million mobile banking customers; so in the past 5.5 month, growth has been just under 150,000 new users per month.   
  • The bank has a 60% market share in online bill payment; an amazing penetration for a bank with 12% of the country’s deposits. 

Note:
1. See our Online Banking Report: The Demise of the Branch (April 2006), for more on the long-term trends in the mix of branch and alternative delivery.

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ING Direct’s Electric Orange Checking Gets Bill-Payment Facelift

By Jim Bruene Posted on
Categories: Bill payment, Epayments, ING Direct, Website Usability & Design

image ING Direct’s (USA) paperless-checking account, Electric Orange, will get a new bill-pay user interface over the weekend (see first screenshot). The direct banking giant has also jazzed up the logo (inset) for its online checking option introduced in early 2007 (previous post).

The new GUI attempts to make bill payment more understandable. With paper and electronic delivery to merchants, person-to-person payments (also paper or electronic), and expedited payments thrown in the mix, it was hard for users to know exactly which option to select (see second screenshot for old user interface). 

ING Direct has reorganized payments into four functions and clearly identified the free (#1-3) vs. fee (#4):

1. Bill pay (paying merchants)
2. Person2Person (sending to an individual’s bank account)
3. Send a paper check
4. Overnight a check (for $20)

The company is also adding the following features (see third screenshot):

  • Electronic bill statements (ebills)
  • Email due-date reminders
  • New sorting options
  • Expanded recurring payment options
  • Simplified navigation
  • Clearly shows estimated payment arrival date

Customers have been notified through two emails that various aspects of bill pay will not be functioning beginning over the three-day weekend as the system is converted. 

Analysis: Overall, it’s a significant improvement, but there are still confusing aspects for novice users. For example, how do I decide between Person2Person and Send a Check? (see note 1) Why should I pay $20 for overnight, when the same delivery terms seem to be available in free bill pay? I’ll withhold final judgment until I have a chance to use it next week.  

1. New bill-pay interface (link, begins 25 July 2009)

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2. Previous user interface (22 July 2009)

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3. Landing page describing the changes (link, 23 July 2009)

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Notes:
1. Answer: You have to have the person’s bank account info to use the P2P option.
2. For more on bill payment, see our Online Banking Report on Epayments (also part 1) (published in 2005) and the Online Banking Report 2009 through 2018 Forecast (published Jan 2009). 

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Pitney Bowes Goes After Remote Deposit Capture Market with Email to Postage-Meter Clients

By Jim Bruene Posted on
Categories: Email Marketing, Email Samples, Jack Henry, Remote Deposit Capture, Small Business

image Pitney Bowes (PB) hit me with a cross-sale message this morning, and surprisingly it was for a banking service, remote deposit capture (see email below). Because we already do ACH transactions through PB to load our postage meter, it’s something I would consider buying from them, especially since our business bank does not offer RDC.  

The service called Click Deposit (note 1) works with any bank or credit union checking account and is powered by Jack Henry ProfitStars. The cost runs $39.95 to $149.95 per month, depending on volume. You get up to 150 monthly scans at the lower level and 1,000 at the high end. Buyers must sign a nine-page contract (PitneyBowes_RDC_app.pdf), committing to the service, and leased scanner, for 36 months.

Because I don’t want to lock us in at $500/yr for three years, I think we’ll pass on this deal. Hopefully, we’ll be able to tap a lower-cost iPhone-based service in the near future, such as that offered by WV United FCU (see previous post).  

Email from Pitney Bowes (22 July 2009, 9:36 AM Pacific)

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Landing page (link)

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Note:
1. Although, Jack Henry announced the relationship in May (press release), I found no mention at the main Pitney Bowes site (pb.com) or the services site (pitneyworks.com), so this may be a marketing test.  

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Addison Avenue Credit Union Provides Secure VIP Access Powered by VeriSign

By Jim Bruene Posted on
Categories: Mobile Banking, Remote Deposit Capture, Security & Privacy, VeriSign

image A few weeks ago, I was lucky enough to tour the British Museum’s exhibit on the history of money. And one thing that remains the same throughout the millennia, a concern about the security and authenticity of the various objects used to convey wealth.

It’s no surprise that security is the number-one online banking concern of today’s consumer. Had there been market research three thousand years ago, I’m sure security would have been at the top of the list of fears of the Chinese rich enough to hold a cache of cowrie shells (inset).  

imageSo, until we figure out a way to eradicate crime, financial institutions need to address security concerns head-on and provide tools for consumers to take more control (note 1).

That’s what I love about Addison Avenue FCU’s launch of VeriSign’s Identity Protection (VIP) security tokens. Addison Avenue members now have the tools to make their online banking extremely secure, should they desire to. And with set-up charges of $30 to $48 (waived for mobile) and an annual fee of $10 (waived the first year), the program is relatively self-funding (screenshots below).

As an added bonus, the “VIP Access” theme, even though it’s powered by a security vendor, provides a nice boost to member relations. It also gives the CU an iPhone (link to app) and Blackberry presence it wouldn’t otherwise have. 

Addison Avenue e2: The VeriSign program is one leg of a three-part effort dubbed E2, that the credit union launched today (press release; see third and fourth screenshots below).

The three core features:

  • VIP security: as outlined above (link)
  • E-deposit: remote check deposit via basic in-home scanner (link)
  • Mobile banking: mobile web-based (link)

Addison Avenue security key landing page (link, 21 July 2009)
A short informational video brings the service to life.

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VIP token options shown on VeriSign’s website

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Addison’s three-part “e2” effort is highlighted on its homepage

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E2 landing page (from homepage)

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Notes:
1. Granted, most customers are not willing to spend the extra effort to bulletproof their accounts.  So extreme security measures such as this should be optional and carry a nominal extra fee. 
2. For more info on addressing security concerns, see our Online Banking Report on Security Marketing (published in 2005) and our more recent Online Banking Report on New Security Techniques published nine months ago.

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Email Unsubscribe Best Practices for Banks, Credit Unions and Other Financial Services Companies

By Jim Bruene Posted on
Categories: Email Marketing, Marketing

image It’s been three years since I last went through my inbox to unsubscribe from the marketing and information lists I no longer read. At that time, I still used email to keep up on ecommerce and banking news. Now, that task has moved almost entirely to RSS, and I rarely read any broadcast email these days. 

During a two-hour paring process to delist 40 to 50 subscriptions from email, I paid close attention to how each company handled that bit of negative news and jotted down a few best practices for banks, credit unions, and other financial providers (note 1): 

  1. Put your branding on the unsubscribe page, don’t simply default to your email service provider page.  
  2. Greet the customer by name and/or email address.
  3. Provide customer testimonials on the value of the email subscription.
  4. Empathize with their situation (e.g., Getting too much mail?), but reiterate the benefits of staying in touch with you (e.g., We really want our customers to get the best deals!) and gently see if you can change their minds (e.g., Are you sure? Try us for another month, and we’ll do our best to bring you only pertinent offers.) 
  5. If that fails, offer alternative ways to maintain contact, for instance:
    – Less-frequent email (see first screenshot below)
    – RSS feed(s) (see second screenshot below)
    – Better-targeted email on just certain subjects
    – Use a different email address
    – Change email format (HTML vs. text)
    – Use SMS instead of email
  6. If applicable, explain that customers will still receive account-related email messages.
  7. Provide a feedback form so users can tell you why they are unsubscribing.
  8. Confirm the request online and provide links to other areas of your website.
  9. Send an email confirming that the unsubscribe process is complete.

Step 1: TigerDirect unsubscribe page (20 July 2009)
Email subscribers clicking on “unsubscribe” are first asked if they’d prefer to receive fewer emails.
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Step 2: After unsubscribing, customers can sign up for RSS or catalog delivery image

Update: Staples…another good example of offering choices on the main unsubscribe page (screenshot 22 July 2009; hat tip to Loren McDonald, note 2):

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Notes:
1. U.S. emailers must comply with CAN-SPAM regulations at all times. 
2. Here’s a good presentation from Loren McDonald from Silverpop on the subject. 
3. For more info on email marketing, see our Online Banking Report on Email Marketing in Financial Services (published June 2006).

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Activity Tickers Bring Life to Financial Websites

By Jim Bruene Posted on
Categories: Advertising & Promotion, BillShrink, MoneyAisle, Website Usability & Design

image One problem with most websites, as compared to the offline world, is that they are relatively static experiences. Unless you are already familiar with the brand, you don’t know if you are the first visitor this year or if 10,000 others are banging away on the servers right now. There’s no online equivalent to the “line out the door” that signals you arrived at a popular restaurant or night club.  

That’s why I like online tickers that show user activity. In financial services, the best example, active for many years, is Progressive Insurance’s scrolling window of rate quotes (see inset). Geezeo, Zillow and ING Direct (see note 1) have also used the technique (see previous post).

And just this month, two financial providers added similar tickers to their homepages:

Both newcomers have neglected to “time stamp” the activity to demonstrate how recent it was. That’s an important aspect for credibility.

BillShrink homepage with Live Feed (16 July 2009)

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 MoneyAisle’s Live Ticker was recently added to its homepage
(16 July 2009)

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Progressive’s Rate Ticker (16 July 2009)

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Notes:
1. Behind the login screen, ING Direct used to have a counter showing the total amount of interest paid to depositors. But it was discontinued last year at about the $9 billion mark. 
2. Industry participants can purchase MoneyAisle’s real-time deposit pricing data stream for $1,500/year (here).

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Things I Would Gladly Pay (my bank) For: Payment Services for Travelers

By Jim Bruene Posted on
Categories: Credit/Debit Cards, Fee Income

imageHaving just gone through the exercise of calling four banks to tell them I may be using their card outside the country
(see note 1), I’m convinced it’s high time for banks and card issuers to upgrade their online services for travelers. It would not only be convenient for customers, but also develop into a sizable profit center for banks. 

Newspapers have supported automated vacation stops/holds for many years primarily to reduce customer service costs. But credit and debit-card issuers have a much stronger business case. For example:

  • Fewer fraud losses
  • Lower customer service expenses
  • More interchange, exchange fees, and interest income from authorizing more transactions
  • Cross-sales of travel-related services
  • Advertising/sponsor revenues
  • Potential subscription or per-trip fees

Here’s the features I’d like today:

  1. Web-based form to input travel itinerary
  2. Ability to update the itinerary when changes occur
  3. Ability to establish withdrawal limits while traveling
  4. Ability to order foreign currency
  5. Ability to switch my email alerts to text-message alerts while traveling (see Alaska Airlines screenshot below)
  6. Ability to purchase trip insurance
  7. Ability to order prepaid travel card(s)
  8. Ability to see exchange rates and have them automatically forwarded to me on a periodic basis while abroad
  9. Info on using my debit/credit card abroad, including fees, what to do if it’s lost or stolen, calling customer service, cash advances from international banks, and so on
  10. ATM/bank maps at my destination
  11. A few disposable card numbers I could use if purchasing online while out of town
  12. And finally, something I wouldn’t have thought of until this past trip, a guarantee that the bank won’t cancel and reissue my card while I’m traveling (see Wells Fargo, note 1).

And a few more items for the future file:

  1. Automatically track my whereabouts via GPS
  2. Ability to forward travel confirmations (e.g., Tripit.com) so I wouldn’t be bothered to input my itinerary
  3. ATM/bank location on my mobile
  4. Automatic coverage of any bills that come due during the travel period

Pricing
Depending on the package, a one-time travel fee of $5 to $20 would make sense. Or, using the telecom model where every value-added service is sold on a subscription basis, a $4.95/month “frequent traveler” upcharge would be palatable.

Alaska Airlines message service (14 July 2009)
Allows user to choose different messaging options depending on whether they are home or on the road 

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Notes:
1. And despite my advance call, Wells Fargo canceled my credit card mid-trip, without telling me (there was a letter waiting when I got home), despite the fact the fraud the bank was concerned about happened more than two months prior (see previous post). 
2. Image courtesy of http://etc.usf.edu/clipart.

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Prosper Back in Peer-to-Peer Lending Game with Full Approval of SEC

By Jim Bruene Posted on
Categories: Loans & Credit, P2P Lending, Prosper

image At our FinovateStartup conference two months ago, Prosper won a Best of Show award for the re-launch of its peer-to-peer lending platform. But apparently, the SEC didn’t share our audience’s enthusiasm over Prosper’s plan to operate under State of California regulatory authority while its SEC filings were undergoing final scrutiny. So Prosper went offline again, waiting until today at 5:30 PM Pacific to reopen (note 1).

The company can now set aside the last nine months of regulatory servitude and pursue its vision: allowing loans to be originated online in an auction process. Sure, thousands of pages of Prosper documentation are now on file at the SEC, with thousands more on the way, and lenders (aka investors) must now meet various state-mandated “investor suitability” requirements (note 2). But fundamentally, it’s the same peer-to-peer lending service the company introduced in 2006, albeit with hundreds of incremental improvements (note 3).

The latest version launched today includes a number of tweaks that include a higher minimum credit score (640), new risk ratings, and lower minimum bid amount ($25), but the only major changes are:

  1. A secondary market is now available for lenders to sell their previously originated loans
  2. A hard rate floor that establishes a minimum yield for loans. It varies by credit score and is determined by adding the current 3-year national CD rate to the expected loss rate of the loan. For example, a C-rated loan with a 6% loss rate now has a floor of approximately 8.3% (6% + 2.3%). The vast majority of loans would have been originated at rates above the floor anyway, so the impact should be small.
  3. Because each individual state must now approve lending/investing at Prosper, only 14 are currently on board: California, Colorado, Delaware, Georgia, Illinois, Minnesota, Montana, Nevada, New York, South Carolina, South Dakota, Utah, Wisconsin, and Wyoming. More states will be added in the weeks and months ahead. Borrowing is permitted in all states except Iowa, Kansas, Maine and North Dakota.

On hold is the planned option to allow institutional lenders to post already-originated loans directly into the marketplace (Open Market), see previous post.

To support the grand re-opening, CEO Chris Larsen penned a blog post entitled: Prosper is Back! (We mean it this time) which features a humorous YouTube clip of him asking his dad to post a loan listing on Prosper (embedded below). It’s good to see they’ve maintained a sense of humor. 

Prosper homepage minutes after its 5:30 PM Pacific relaunch (13 July 2009)

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Notes:
1. The SEC approved the Prosper filings Friday afternoon, 10 July 2009.
2. Investor suitability requirements may involve one or more of the following: minimum net worth, minimum annual income, maximum investment as a percent of net worth.
3. For more on the P2P loan marketplace, see our Online Banking Report on Peer-to-Peer Lending (published Dec. 2007). 

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WV United Federal Credit Union is First with iPhone-based Remote Check Scan & Deposit

By Jim Bruene Posted on
Categories: Best of the Web, Deposits, Checking, Savings, CDs, iPhone, Mobile Banking, Remote Deposit Capture

imageIn June, we reported on USAA’s upcoming iPhone app that will support remote check deposits. But it looks like they were beaten to market by tiny WV United FCU headquartered in Charleston, WV. Haven’t heard of WV United? They have just six employees, $11 million in assets, and 3,000 members.

But somehow they were able to pull off something that no other financial institution has yet to accomplish, accepting paper check deposits via a native iPhone application (iTunes link, see note 1 and 2). The application was added to the iPhone App Store on July 4, and the CU wasted no time in heralding the innovation with a homepage banner (see screenshot below).

imageThe application could not be simpler. Users take a picture by pressing the button on the left (see inset), verifying that the image is readable, then uploading with the button on the right. WV United uses the member’s mobile phone number to apply it to the correct account. The latest iPhone OS 3.0 is required.

The credit union also accepts deposits via in-home scanners using secure file transfers powered by LeapFile (co-branded site here).

It appears both services simply send images to the credit union where an employee manually converts them to ACH items. According to the E-Deposit customer agreement, the first 10 items each month are free; a $1 fee per item for the remainder of the month is charged. This allows for collection of a bit of fee revenue from small business members, while enabling most consumers to use it free of charge.

Certainly, fraud possibilities exist. But the CU’s normal deposit-processing controls should mitigate most of the risk (see E-Deposit funds availability policy here). 

Mitek Systems introduced a mobile remote-deposit system last year (post here), but it’s not yet in production at any financial institutions. 

imageAnalysis: Although not a feature that will see widespread usage, mobile check deposits will prove convenient for certain customers, especially mobile small businesses. More importantly, it helps differentiate between online and mobile services.

So, for raising the bar in mobile banking, we are awarding WV United with our first OBR Best of the Web award for 2009 (note 3). In the 12 years we’ve given the award, WV United is by far the smallest financial institution to win. 

WV United FCU homepage with iPhone banner (11 July 2009)

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iPhone app landing page (link)

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Notes:
1. Sometimes it’s nice to be small. WV United has six employees total, according to NCUA data. Most large banks would have a project team larger than that just to do the feasibility study on mobile remote-deposit capture.
2. For more info on the importance of iPhone applications for financial services, see our recent full report: Online Banking Report: Mobile Banking via the iPhone.
3. OBR Best of the Web awards are given periodically to companies that pioneer new online and mobile banking features. It is not an endorsement of the company or product, just recognition for what we believe is an important development. WV United is the 74th recipient of the designation since we began awarding it in 1997.

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Out of the Inbox: ShareBuilder Email Thanks Customers After Second Month of Automated Investments

By Jim Bruene Posted on
Categories: Alerts & Messaging, Email Marketing, Email Samples, ING Direct, Retirement savings

image This is the first time we’ve seen a financial services company reach out and congratulate users for a job well done. In this case, ING Direct’s U.S. retail investments unit, ShareBuilder, sent a congratulatory email message to me after two months of investing through its Automatic Investment Program, which pulls money from outside checking accounts.  

The message has several purposes:

  • To reinforce the investment decision
  • To encourage customers to use ShareBuilder Research
  • To incent users to move other brokerage accounts to ShareBuilder with the $100 bonus offer (see landing page, second screenshot)

Analysis
What’s not to like here? It’s timely, relevant, to-the-point (only 75 words in the main body copy) and makes users feel good about themselves. The same thing could be done with loan payments, debt reduction, savings account balance growth, and so on.

Email: ShareBuilder automated savings congratulations
(3 July 2009, 6:41 AM Pacific Time)

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Landing page for $100-bonus offer
Note: The offer is co-branded with Wells Fargo, which is where I originally set up the ShareBuilder account eight or nine years ago.

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Side note: Online account opening warning box
When looking at the new account application, we encountered this popup when attempting to leave the unfinished app and navigate to the ShareBuilder homepage (see note 1).  

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Note:
1. For more info on the subject of online apps, see our Online Banking Report: Online Account Opening, published two weeks ago. 

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