USAA Makes Mobile Banking Better than Online Banking

image Here’s a test that tells you when you’ve built a successful mobile app:

  1. Place your laptop next to your iPhone/Android
  2. Choose a task
  3. Reach for the device that’s easiest to use for that task 

If you don’t reach for the mobile phone first, you still have work to do on the user experience. 

I’ve always chosen the laptop for banking, even though I’ve ported more than a dozen other routine tasks to the iPhone (note 1). The hassle of logging in with those tiny iPhone keys pushes me to the laptop. But as of Tuesday, USAA’s latest iPhone app, version 2.2, has changed the equation, and there’s no looking back. 

Mobile vs. online banking
The key to making mobile a profitable channel is to make the user experience BETTER than online. And USAA is the only U.S. financial institution doing that today.

USAA’s biggest mobile “wow” is mobile check deposits (see Deposit@Mobile screenshot below) introduced six months ago for the iPhone. While it may not seem novel to those in the industry familiar with scanner-based remote deposits, the average consumer considers an iPhone check deposit to be almost magical. Other than a few small credit unions, no other major banking competitor offers it, so USAA continues to own mobile magic.  

imageBut with Bank of America rumored to be readying a launch mobile deposits, which will no doubt be featured in Apple TV ads, (see latest one here), USAA needs to keep innovating. 

And this week, USAA delivered with a single-PIN login with authentication powered by VeriSign VIP service. The optional 4-digit sign-on process is available now on the iPhone and will be available in April for Android and “shortly thereafter” for Blackberry (note 2).

In a time when it’s more tedious and less secure to log in online, USAA takes us back in time to a simpler day, when you could log in with just a few digits.

And by using techniques that authenticate the mobile phone during login, the bank says that mobile access is more secure than online.

Think about that for a moment. Mobile is MORE SECURE than online. With tens of millions of customers deathly afraid of logging in via their virus-laden PCs, imagine what that could do for mobile adoption.

It will take time to educate the market. Currently, most consumers believe the mobile channel is far less secure. But if they can be convinced the opposite is true, many will kiss online banking goodbye forever.

Notes:
1. According to yesterday’s release, USAA has 1.3 million mobile users, 17% of its 7.4 million customer base.
2. Previously, USAA users were required to sign on with username, password and PIN. The simple sign-on process is optional for those not trusting the simpler process.
3. For more info on financial services opportunities on the iPhone, see our March 2009 Online Banking Report.

What the Real-Time Web Means for Banking

imageOne of the most important trends in the online/mobile world is the so-called real-time Web. Here’s how Wikipedia defines it:

…technologies and practices which enable users to receive information as soon as it’s published, rather than requiring that they check a source periodically for updates.

Online banking should have gone
real-time long ago, but privacy concerns and a legacy of batch
processing — not to mention the 100-year credit crisis — have kept
info delivery in very non-real-time at most financial institutions (note
1
).

As balance/transaction email alerts appeared on the scene in 1996/1997, the perfect solution to keep consumers informed on a timely basis seemed assured. But for most users, financial alerts have not lived up to their promise. Why?

1. Users must remember to establish alerts while they are banking online

2. Users must establish proper parameters so they are not overwhelmed with alerts, or receive too little info

3. Those parameters must be tweaked as necessary

4. Users must select the proper email inbox(es) for the alerts

5. Users must read the alerts in a timely fashion

6. And of course, act on them if necessary

Frankly, that’s just too much work for most online bankers. Sending alerts to a mobile device may help since it is typically more immediate than email. But that depends on the user and whether they really want banking messages in their text-message stream.

But we think many users, now accustomed to viewing a stream of info all day from Facebook, Twitter, FriendFeed, RSS, and so on, will want similar delivery of financial info. Some will want their financial info to stream into their overall news feed (e.g., via Facebook, Twitter, etc.), others will prefer a separate dedicated channel (e.g., Blippy note 2, Strings). And the old-school folk will still prefer email or text-message feeds.

Once the feed is established, users will want to interact with the data, for example:

  • Tagging entries for budgeting/tax purposes
  • Sharing specific transactions with friends, spouses, accountants
  • Forwarding transactions to bookkeeping or managers for reimbursement
  • Replying to the bank/merchant regarding incorrect transactions  
  • Flagging transactions for later review

The real-time Web turns online banking on its head. Creating a daily dialogue with customers, rather than one-time sessions where users log in every few days, then hope nothing goes wrong before their next login.

There are advantages in both models, but it’s not really your choice which one to offer. The world has gone real-time: You can either join in or have your customers migrate to Mint/Blippy/Wesabe to tap their financial feed.

Notes:
1. This is characterization of the U.S. situation; many other countries are much further ahead, and have been operating under real-time info-flow for years. 
2. We believe there are a number of practical applications for Blippy’s technology; see our previous post.
3. For more info on financial messaging and alerts, Online Banking Report subscribers should review our 2003 report on the subject.

Twittering Vantage Credit Union Taps Geezeo for Online PFM

imageLast October, Vantage Credit Union launched one of the most novel banking services of 2009 (or ever for that matter), transactional banking through Twitter direct messaging (see note 1). The CU earned our OBR Best of the Web designation for its creativity.

Unfortunately, it doesn’t appear the service has gained much traction yet. The 103,000-member St. Louis, MO-based CU has 322 Twitter followers on its public feed and about 200 on its protected TweetMyMoney feed where the t-banking takes place (Note: Updated per comment). The majority of public feed followers are analysts, bloggers, and other credit unions.

But Vantage’s Twitter move isn’t about number of users. It’s about keeping its brand relevant with its social networking members. And splashing Twitter across your homepage is a great way to do that (see screenshot below).

Now Vantage is back at it, partnering with Finovate-alum, Geezeo to offer state-of-the-art online personal financial management (press release). It will be fun to see what VCU EVP Eric Acree, a Filene i3 member, does with the Geezeo platform. I think it’s safe to say that they will put a novel spin on PFM.   

VCU is Geezeo’s fourth white-label credit union client; the other three are Stanford Federal Credit Union (previous post, note 1), Alliant Credit Union, and 1st Advantage FCU. The company is also working with 1st Mariner Bank (updated March 1 per comments).

Vantage CU continues to promote its Twitter features on its homepage
(26 Feb. 2010)

image

Notes:
1. Stanford FCU’s website still says Geezeo-powered MyMo is “coming soon” (link to the Oct. 31, 2009, dated announcement), but the link to the new service has been pulled from the SFCU homepage. 
2. For more info, see our Online Banking Report: Leveraging Twitter (May 2009)

FinovateSpring 2010 Very Early-Bird Prices Expire in Only 4 Days!

This is an exciting time of year for us because we’re finalizing the companies that will demo their newest fintech innovations at FinovateSpring (May 11, 2010 in San Francisco). A great bunch of companies have applied for a chance to demo and we’re incredibly excited to showcase their latest and greatest onstage.

FinovateSpring 2010 Logo

Just a quick reminder that the very early-bird ticket prices will expire at the end of February (only 4 days from now). If you register this week, you’ll save $200 on your ticket and lock in your spot to see debuts and demos of dozens of new financial and banking technological innovations.

Tickets are selling well with attendees from great organizations like: 

  • AARP
  • BNP Paribas
  • Discover
  • Filene
  • GRP Partners
  • Intuit
  • Mechanics Bank
  • PayPal
  • USAA
  • Visa
  • Aite
  • Capital One
  • Experian
  • Forrester Research
  • H&R Block
  • Jack Henry
  • Motley Fool
  • Tower Group
  • US Bank
  • Wells Fargo
  • Alliant Credit Union
  • Celent
  • Fidelity
  • Google
  • Highland Capital
  • Javelin
  • NY Times
  • TransUnion
  • Venrock
  • Wired Magazine

FinovateSpring is one of our twice-yearly showcases of the best new ideas in banking and financial technology. The show is built around a unique blend of fast-paced demos of actual technology (no slides!) and high-quality networking with an audience of senior FI executives, fintech entrepreneurs, VCs, press, industry analysts and bloggers. It’s an awesome environment to find your next competitive edge.

Don’t miss out on the best prices on tickets to this great show. Register now!

Great Recoveries: Major Banks Respond to Negative Blog Items Immediately

image Twice in the past few weeks, I’ve written blog posts that had one or more criticisms about specific experiences with a bank’s product. My complaints weren’t Huff Post calls to arms or anything particularly serious, just small things that had gone wrong (previous posts here and here). And our blog, while well-read in the banking industry, is just a rounding error in terms of mainstream readership.  

But in both these examples, the bank reached out to me almost immediately, offering to help solve the problem. In one case, I received a phone call (several actually) from the bank’s PR department and the other bank left a message on our home phone (note 1) from the “executive office.” 

My take: I am shocked to have heard not once, but twice in the same month from mega-banks looking to solve small, albeit public, customer-service issues. In 15 years of covering the industry, including three with a public blog, I have never had a single “official” call from a bank about a problem I’ve written about (note 2).

Businesses have long debated how to handle negative conversations in social media (see note 3). Do you stay on the sidelines, anonymously participate in the conversation, or reach out with offers to help?

Clearly, offering to help is the way to go. However, you must choose your words carefully because everything you say can and will be used against you by a blogger bent on revenge or ridicule.

But I can tell you now from experience that it’s powerful to be contacted by the business you’ve written about. My reaction goes something like this:

  • “Uh oh, now I’ve offended a reader; I’d better think twice about posting negative comments again.” At the very least, I’ll certainly make sure my coverage is extremely balanced in the future. No potshots, that’s for sure.
  • “Wow, this bank really cares about its customers and reputation.” That makes me feel much better about them.
  • “Seriously, a big bank that calls its customers when it hears about a problem; impressive as hell!”

So going forward:

  • I’m more likely to look for something good to say about the bank to make up for the negative item. 
  • I may post an update to the original entry, or even an entire post like this, complimenting the bank on reaching out to resolve the problem.
  • I’ll probably tell my friends the story, either privately, or more publicly via Twitter, Facebook, etc.

These are pretty good results from a relatively low-cost phone call. Sure, my problems were fairly simple and easily resolved, and it may be harder to appease a blogger whose home was recently foreclosed. But why not try? As long as you stay calm and try to keep things constructive, there’s very little downside and a lot of upside.

So congratulations Citibank and Capital One, your performance has been truly remarkable. (Are we good now?) 

Note:
1. The bank must have looked at our actual account info to get the home phone number.
2. I have received the occasional email from a subscriber, but no proactive effort to provide help.
3. For a wonderful overview of the ins and outs of responding to bloggers, read the two-part post (here and here) from Vancity’s MVP and third-ranked innovator on the planet, William Azaroff. 

Mint.com Traffic Soars Under Intuit Ownership

image I don’t know if it has anything to do with the publicity Mint received in recent months following its acquisition by Intuit or the promotional links from Quicken’s website, but the online PFM juggernaut just blew the roof off its monthly traffic. According to Compete, in January, Mint had 1.7 million unique visitors, 600,000 more than a year earlier.

To provide a little context, not counting the Dec. to April tax-time traffic spike at Intuit, Mint’s traffic is now slightly HIGHER than that of its parent company (see chart #1 below). That gives you a little understanding of why Intuit coughed up $170 million for the startup.

Another way to look at it: Mint now has as much traffic as the tenth largest U.S. retail bank, BB&T (see chart #2).

The interesting question for 2010: Now that Mint is part of the establishment, what startup will rise up to challenge it? Or will the banks, back on a path to profitability, fill the need going forward? 

Chart 1: Mint’s traffic is now similar to Intuit’s non-tax-time traffic

image
Source: Compete (link)

Chart 2: Mint now has about the same number of visitors as the tenth largest U.S. retail bank, BB&T
Note: Mint is blue line below

image 
Source: Compete (link)

Note: For more information on the PFM space, see our Online Banking Report on Personal Finance Features.

Thanks to our February 2010 NetBanker Sponsors

We’d like to take moment away from obsessively watching the Winter Olympics in Vancouver (Go USA!) to express our thanks to the sponsors that help keep NetBanker’s high-quality content free for you.

Please support our sponsors (listed below in alphabetical order) so that they continue to support NetBanker:

  • IntelliResponse — Get a complimentary whitepaper on how self-service via the mobile channel can improve your customer service and benefit your business.
  • Wesabe — Promoting their new Springboard product — a white-label version of their personal finance capabilities and community for financial institutions. Take a look!
  • Worklight — Check out this new demo of how Worklight helps businesses securely engage their customers via widgets, social networks, iPhone apps and other consumer tools.
  • Yodlee — Sign up for a free webinar on March 10th from Yodlee about their PFM solution and receive a complimentary copy of a new Aite report on “PFM: Platform For Customer Engagement”.

Now, back to the blogging.

P.S. If you’d like to join these companies in supporting NetBanker, please drop me an email at eric@netbanker.com.


ericphoto.jpgEric Mattson is CEO of Online Financial Innovations, the parent company of NetBanker, Online Banking Report and the Finovate Conference Series. He can be reached at eric@netbanker.com.

Bank of America Finally Forces Username Change, No More Social Security Numbers

image When I first started banking online with Bank of America, ten or more years ago, no choice in username existed: it was set to your Social Security Number (SSN). But that was back in the days before hackers had become proficient in stealing usernames.

While I’ve been advised to change the username a few times over the years, the bank finally laid down the law in January. I had two more logins available with my SSN, and then I was required to change. The message was delivered via splash screen after login (see #1 below).

The process was simple and took just a few seconds (screenshot #2). The bank’s interactive script helps users make good username/password choices (screenshots #3-4).

While this change isn’t likely to do anything to help the bank’s bottom line (it probably just drives up tech support calls as users adjust to their new usernames), it’s the right thing to do. Helping customers protect their own privacy should be part of every financial institution’s mission.

#1: Bank of America splash screen at login (13 Feb. 2010)

image

#2 Landing page after choosing “update” button above

image

#3 Interactive help for creating an allowed username

image

#4 Confirmation when all is well

image

Amplify Credit Union Ready for Valentine’s Day

image If you’ve read Netbanker for awhile, you already know that I’m a little obsessed about the lack of imagination most financial institutions display when it comes to dressing up their websites for major holidays.

It’s not that big a deal, but still, unless you are purposefully trying to project an image from the late 1990s (maybe not such a bad idea for many banks, given the current backlash), you might consider investing in a few graphical tweaks to keep up with other Internet retailers (see our Dec. 24 post).

Today, while looking for mobile banking examples, I happened across Amplify Credit Union, one of my favorite examples of financial marketing. They didn’t have mobile on the homepage, but they were sure decked out for Valentine’s Day, which is just 48 hours away.  

The CU not only swapped out their normal background graphic on its homepage, but also sweetened its logo with a heart, ala Google, and changed its tagline:

From: Bank Less. Live more.

To:    Bank less. Love more.

These are three alterations I’ve not seen from a financial institution. In addition, the Valentine’s theme was carried out with:

  • Red shading to the sides of the page, providing a very professional finish
  • A “share the love” promotion for the CU’s $25 refer-a-friend promo

Overall, it’s very clever and supports the credit union’s innovative brand image.

Amplify CU altered its homepage and logo for Valentine’s Day (12 Feb. 2010)
Note: Pause button in upper-right keeps the promotion from automatically cycling to the next one.

image

Share the Love landing page (link)

image

Numbers in the News: P2P Payments Usage at First General Credit Union

image It’s always difficult to gauge actual consumer demand for new services. Traditional market research, while providing some broad intent data (e.g., “yeah, that sounds like something I might buy“), doesn’t really do a very good job in telling you whether real customers will use the service. The problem is that in the real world, customers have real concerns about new products and most are unwilling to spend very much time learning about them.

So it’s always great to find financial institutions willing to share usage data on their online or mobile services. This week, First General Credit Union wins our undying gratitude (and a free subscription to Netbanker) by revealing its person-to-person payments numbers in the latest issue of Credit Union Journal

The CU uses iPay Technologies P2P payment service which is provided at no-cost to its deluxe bill-payment clients. Keep in mind, this is a small $44 million credit union serving 5,000 members, so the raw numbers aren’t large but the percentages are interesting:

Number of online banking users: 500 (10% of members)
Number of bill-pay users: 200 (40% of online banking users)
Number of P2P payment users:    3 (1.5% of bill-pay users,
       0.6% of online banking users
)

Analysis: The credit union says it hasn’t promoted the P2P feature, which is offered free of charge. It’s not even mentioned on its website, except on slide 22 of its online demo. So this isn’t a representative sample for a financial institution looking to drive usage to the product. However, a 2% penetration (of online/mobile customers) is along the lines of what we expect this year nationwide. Longer-term, we expect usage to grow at least 10-fold from that level (see note below).

Note: For more information on P2P payments including a 15-year usage forecast, see our recent Online Banking Report: Making the Case for P2P Payments (published Dec. 2009).

Launches: Kwedit Allows Gamers to Pay for Virtual Goods with Real Credit

image From a financial innovations standpoint, 2010 is off to a great start. Just 35 days into the year and we’ve already had two launches of services I don’t think anyone saw coming: Blippy to automatically stream your purchases to the world (previous post) and now Kwedit (say it out loud if you don’t get it).

Kwedit is designed to be the payments engine for the massive virtual goods market, estimated to be $1.6 billion in 2010 according to InsideVirtualGoods.com, up from $1 billion in 2009 (cited by GamesBeat last week).  

imageMany of the gaming networks, especially the so-called “social gaming” startups such as Zynga’s FarmVille, appeal to teenagers and younger kids (note 1) who don’t have credit or debit cards available to pay for virtual goods. This has made it difficult for the publishers to monetize the games through direct payments.

How it works:

1. Users of games partnering with Kwedit can purchase in-game virtual goods by promising to pay later through their associated Kwedit account. See the screenshot below to see how Kwedit is positioned in the online game FooPets.

2. Later, users print out a bar-coded coupon from their Kwedit account (see inset right) and take it to a participating 7-11 convenience store and pay via cash, mail payment imagedirectly to Kwedit, or “pass the duck” and send the IOU direct to their parents for payment. The site also offers an option to pay directly via credit or debit card.

3. To help drive off deadbeats, the company has created a Kwedit Score that shows which users are paying their IOUs on time (inset left). At FooPets, users will get more virtual goodies as their Kwedit Score increases, creating a game within the game and a way to promote responsible spending. 

Analysis
I’m not a gamer myself, but as a parent, I understand the pull of online games and look forward to the day when I don’t have to hand over my credit card for use on some site I barely understand. Some will argue that Kwedit needlessly encourages credit use in the pre-teen set (note 1). But as long as parents stay involved, Kwedit can actually be used to teach kids the importance of paying their bills.

So, if users take this option seriously, by paying down their virtual debt with real money, Kwedit could be huge (in which case, PayPal buys it of course). And it’s relatively low risk for the gaming companies because the virtual goods have a zero marginal cost. BillMyParents is another company we’ve covered in the teen-payments space.

There is no doubt in my mind that online gaming needs a better payment system and that the solution is unlikely to resemble anything us parents have ever seen or imagined. Kwedit fits that bill. 

Kwedit gets star billing on the main screen at FooPets (4 Feb 2010)

image

Users create a promise to pay using a popup screen served by Kwedit (link)
Note: Users first must log in to their Kwedit account from this popup

image

Notes:
1. Kwedit users must be 13 or older to sign up for an account.