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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Value-added Online Financial Services: $4.95 per Month is the New Free

By Jim Bruene Posted on
Categories: Electronic Statements, Fee Income, Mercantile Bank of MI, Wells Fargo

imageAs we’ve mentioned before, there are surprisingly few fee-based online financial services in the United States (see note 1). But things may be changing. In the past month we’ve looked at three innovative services charging fees:  

Today, we highlight a fourth new fee-based service, also charging $4.95/month (or more), vSafe from Wells Fargo. vSafe is a secure online storage solution that sells for $15 to $15 per months as follows:

  • $4.95/mo for 1GB of storage
  • $9.95/mo for 3GB of storage
  • $14.95/mo for 6GB of storage

The service was introduced several months ago, and I’ve been using it for a couple months. The service automatically stores Wells Fargo statements, and allows users to upload any other file up to the storage limit. It would be even more useful if it offered automated retrieval and storage of other bank and biller statements.

Wells Fargo homepage (1 June 2009, 1:15 PM PDT)

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Landing page (link, 1 June 2009)

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Take a test drive in the Wells Fargo lab (link, 1 June 2009)

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Interactive video highlighting benefits

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Signup explanation

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Notes:
1. The golden rule of consumerism: “You get what you pay for.” Because online banking services are typically offered free of charge, U.S. consumers have had to contend with clunkier, slower, less secure and less feature-rich online services than consumers in other countries that pay for online access. Fees for online services can be a win-win, allowing financial institutions to offer premium online services for those willing and able to pay for them, while at the same time offering basic services free of charge so that everyone can benefit from online banking. 
2. Article updated 9 July 2009 to remove incorrect reference to Expensify’s $4.95/mo fee (see comments).

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Mobile Banking Forecasts (U.S.): TowerGroup vs. Online Banking Report

By Jim Bruene Posted on
Categories: Metrics & Market Research, Mobile Banking

image TowerGroup has just released a new research note discussing the growing adoption of mobile banking in the United States. The research unit of MasterCard is predicting a five-fold increase in active users (note 1) between year-end 2009 and year-end 2013.

In comparison, we (note 2) are projecting a four-fold increase. But either way, it’s a phenomenal growth curve reflecting a market that financial institutions must pay attention to.

Following are the numbers Tower released; more details are contained in the full report (purchase here). I also compared to those that we projected in our Jan 17 Online Banking Report.

Please note: TowerGroup forecasts active USERS; we forecast active HOUSEHOLDS. There are about 1.9 adults (18+) per household in the United States, but often, not all of the adults in the household are active banking users, so it’s a bit hard to compare the two figures. But if you assume 1.2 to 1.4 mobile banking users per household (note 3), we are pretty close this year, but TowerGroup is a bit more bullish five years out.

  TowerGroup
(May 2009)		 Online Banking Report (Jan 2009) Online Banking Report (Jan 2009)
Basis Active U.S. users Active U.S. Households (HH) Active U.S. users assuming 1.2/HH now, 1.4/HH in 2013
2008 4.6 mil 3.5 mil 4.2 mil
2009 10 mil 7.5 mil 9.0 mil
2013 53 mil 30 mil 42 mil
CAGR (08 vs 13) 63% 54% 58%

Sources: Online Banking Report, Jan 2009; TowerGroup, May 2009

Notes:
1. Active mobile users have used the service within the past 90 days.
2. See our Online Banking Report: Mobile and Online Banking Forecast or the Online Banking Report: Banking on the iPhone for complete details.
3. We assume the number of mobile users per household will grow over time starting with 1.2 per household in 2009 to 1.4 per household in 2013.  

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SmartyPig Deposits Up Ten-fold with High-rate Strategy

By Jim Bruene Posted on
Categories: Deposits, Checking, Savings, CDs, SmartyPig, Social Networks

image Maintaining one of the highest rates in the country, currently 2.75% (see note 1), SmartyPig’s deposits have grown ten-fold since January (see chart 1, below). And the company plans to continue its aggressive pricing and marketing, hoping to grow another five-fold to a half-billion by year-end (see chart 2, below) or 50x what they started the year with.

Deposits in the United States are held by part owner, Des Moines, Iowa-based West Bank. Australian deposits are held by SmartyPig partner ANZ Bank.

To help fund their growth objectives, SmartyPig announced today that Red McCombs, co-founder of Clear Channel Communications, has invested an undisclosed amount. McComb Enterprises lists one other financial services company in its portfolio, asset-based lender, Propel Financial Services.

Founder Jon Gaskell is pleased with the aspect of goal-based saving at SmartyPig. In an email yesterday he told me:

Of our customers who have reached a goal, more than 80% of them have started a new goal. The average SmartyPig goal length is nearly 4.5 years, and our average user is depositing a little more than $200 per month toward his or her goal. Fifteen months after launch, our data suggests that a vast majority of our customers are staying focused on their predetermined goals, and the deposits are “CD-like” in nature.

The half-billion-dollar question, assuming they meet their 2009 projection, is how sticky are the deposits when rates come down off the top of the chart?   

Chart 1: Actual deposit growth at SmartyPig

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Chart 2: Expected deposit growth through Dec. 2009

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Source: SmartyPig, 25 June 2009

SmartyPig homepage (24 June 2009)

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Notes:
1. In Bank Deals weekly list of highest savings rates, SmartyPig was number one on June 20 at 3.05%. The rate was lowered on June 22 to its current 2.75%.

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