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Information services company Lead411 published its list of 80 Hottest San Francisco companies yesterday. The companies were selected from a list of 2600 fast growing, privately held companies in the San Francisco area.
Three out of 80 companies listed are Finovate alumni:
To be selected, companies needed a 100% increase in revenues over the past two years or $5 million+ in funding in the past two years.
Last week, Christophe Langlois @Visible-Banking tweeted a question about the value of in-statement rewards programs:
And my answer:
My response was partly 140-character hyperbole. It’s Twitter after all. But after sleeping on it, I think what I said might actually be true.
What’s the biggest problem facing online/mobile banking?
The cost to the bank. Always has been and always will be. And it’s not going to get less expensive anytime soon (note 1). Every time we write about the next must-have online bell or mobile whistle, it just gives bank CFOs another gray hair.
Up until recently there were only three ways to pay for these extra expenses:
The vast majority of banks, and every one in the United States, took the last approach. Unfortunately, this can lead to unwise pricing decisions such as the one that gave rise to the “$35 cup of coffee.”
But thanks to Cardlytics, who recently took home Best of Show honors at Finovate Europe, and others, we are entering into a new era of advertising-supported banking. And that could finally make direct banking a revenue generator on its own. Not enough to pay all its costs, but enough to alter the game.
Let’s assume banking customers redeem 2 offers per month and the average commission to the bank is $1 each (note 2). That’s $2/mo in new revenues, almost entirely attributable to the online/mobile channel (note 3).
A bank with 25,000 online banking customers would earn about $600,000 annually. That will buy a several bells and a decent whistle.
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Notes:
1. It can be argued that in the long-term support costs per banking customer will fall dramatically as branches and human customer support are downsized.
2. Using Aite’s forecasted $1.7 billion in-statement commissions in 2015 and dividing by 70 million online banking household (link).
3. You have to have the debit or credit card too, so the revenue might need to be shared with the card P&L.
4. We published a report on in-statement rewards in 2011 in our Online Banking Report.
I was doing some research into banks’ Facebook sites and found a couple pretty terrible results when using each bank’s own search feature. Here are three samples.
1. Citibank site-search results for “Facebook” (17 Feb 2012; 3 PM Pacific)
The search results try to convince you to search for “fake book” instead (why?). Ironically, the second search result does lead to the bank’s Facebook page, but you’d never know it from the title, “Citibank Online – IMPORTANT INFORMATION.”
2. Chase Bank site-search results for “Facebook”
Chase has more Facebook fans (3.4 million) than any bank on the planet, in fact almost 4x the nearest competitor. But you wouldn’t know if from their site search, which returns exactly zero useful results.
3. US Bank site-search results for anything
It looks like US Bank’s site search is broken today. Every search comes up with the same error message. Too bad there isn’t a better error message. “We could not process your request” sounds a bit like they are shifting the blame to the user.
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Note: We’ve covered banking site-search in our Online Banking Report industry newsletter (subscription).
In the past week, doxo, an online file organization and bill pay platform, launched new features and added billers to its system.
Features
1) Added a digital drawer feature to help users organize files. The simple drag and drop functionality allows users to easily categorize companies into the file cabinet drawers.
2) Updated its desktop application to enhance session handling, intelligently name backup files, and allow for the creation of duplicate folders.
Billers Added
1) Benton and Franklin Counties in Washington state accept property tax payments
2) Eight healthcare systems across 40 hospitals including:
- Saint Luke’s Health System
- Advocate Health Care and Advocate Medical Group
- Novant Health
- Northwestern Memorial Hospital
- University of Illinois Medical Center
- Rockford Health System
- Rush-Copley Medical Center
To learn more about doxo, watch its FinovateSpring 2011 demo.
Yesterday, online financial communication platform StockTwits launched a new capability called Conversations:
“StockTwits Conversations group new contributions made in response to any piece of content together, creating another way to share and consume messages beyond real-time StockTwits streams.”
The new feature should bring the communication from Twitter to the StockTwits platform and help users find and contribute to conversations.
To learn more about StockTwits, watch its FinovateEurope 2011 demo.
While I don’t use eBay for entertainment much any more, I still pick up the occasional used item now and then. And I love the rewards program which began about two years ago. It works like it should, with no qualification hoops to jump through or byzantine rules to discourage redemption (note 1).
Users accrue a 2% cash-back bonus, called eBay Bucks, for three months. Then they have 30 days to spend it on the site. When paying for a subsequent purchase, the eBay Bucks are automatically used first, with any remainder shunted off to PayPal for authorization.
It’s all well integrated and transparent. eBay even emails you multiple times as the spending deadline approaches.
They company also provides ways to earn extra eBay bucks. Today, for example, they offered an extra fiver if you bought something worth $100 or more.
In addition, outside brands can make offers on the rewards-summary page as well. The current featured offers (for me anyway) are from Intuit’s Mint.com and TurboTax units. Users receive one eBay Buck for signing up for Mint and two for using TurboTax. There are 36 offers altogether, paying up to 15 eBay dollars (People Magazine). All offers are powered by TrialPay. Two others are financial:
Side note: The eBay rewards implementation is a good example to simulate when designing your own in-statement rewards program.
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Mint.com offer displayed in eBay rewards program area (16 Feb 2012)
Close-up of Intuit offers
Landing page powered by TrialPay (link)
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Notes:
1. I did fail to redeem my cash-back horde the first time, because I didn’t realize there was a 30-day redemption deadline. But not before eBay sent multiple messages reminding me of the pending deadline.
2. For more on in-statement rewards programs for banks, check out our Online Banking Report on the subject (published Feb. 2011).
The New York Times Bucks blog recently featured BillFloat, a startup that provides short-term loans to help consumers pay bills.
The metrics cited in the article:
Consumer costs:
To learn more about BillFloat, watch its FinovateSpring 2011 demo.
Kabbage, a startup that provides financing to online merchants, announced yesterday that it has partnered with UPS to use customer shipping data to make better underwriting decisions.
“Effective today, small businesses will be able to direct UPS to share their shipping history with Kabbage via the Kabbage.com website, making it possible for them to potentially obtain more capital at lower rates.”
A video on Kabbage’s blog states that UPS is also providing Kabbage an undisclosed amount of capital to grow its customer base and fund more small businesses.
To learn more about Kabbage, watch its FinovateFall 2011 demo.
In the week after FinovateEurope, I’ve been keeping track of press coverage from the conference. The media has generated a lot of buzz* about ETRONIKA’s use of Microsoft Kinect for online banking.
ETRONIKA, a Lithuanian startup, uses Kinect technology to provide users access to their online bank account via face and voice recognition, followed by a PIN number. After logging in, clients can navigate the system using voice commands and sweeping hand gestures.
Because this was the first time the Finovate team had ever seen this type of unique financial technology, we eagerly awaited seeing the demo. On the rehearsal day before the show, the microphones interfered with the voice recognition feature**. We sweated it out as the audio/visual team adjusted their equipment to minimize the echo caused by the large auditorium.
When ETRONIKA stepped up to the stage on the day of the conference, all fingers were crossed. Fortunately, the technology worked (almost) flawlessly, and the startup was able to share its unique technology with the audience.
ETRONIKA’s demo video will be posted on the Finovate website in a few weeks.
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*Press coverage includes:
**The voice-recognition feature works fine in a normal setting, this issue was solely caused by audio/visual technicalities.
