New Online Banking Report Published: Selling Behind the Password

By Jim Bruene Posted on
Categories: Advertising & Promotion, Credit/Debit Cards, Deposits, Checking, Savings, CDs, Online Banking Report, US Bank, Wells Fargo

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We just posted our latest Online Banking Report.
It will be mailed to subscribers tomorrow. It’s also available online here. There’s no charge for current subscribers; others may access it immediately
for US$395.

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Selling Behind the Password
Unlocking the marketing potential within
online banking

48 pages (published 21 April, 2009)

In this report (abstract), we go behind the login screen and report on the marketing and cross-selling practices of 15 financial institutions and card issuers.

Even among large banks, there’s a huge disparity in the amount of cross-selling efforts within online banking. Wells Fargo is the most prolific, with nine marketing messages and product placements alone on its main account-management page. The bank also uses login and logoff activities to display promotions (see screenshot below). On the other hand, US Bank has just a single link to an “offers page” buried below the fold. Most FIs fall somewhere in between.

We looked at the opportunities within six different areas:

  • Interstitial pages (splash screen) inserted after performing any online activity, especially after the initial login.
  • Banner and keyword promotions within the secure online banking area
  • Product placement within online banking and bill pay
  • Transactional upgrades
  • Page displayed after an online banking session has concluded (either through logout or inactivity)
  • Product/shopping/discount portals and third-party ads

The following financial companies were analyzed by logging in to actual accounts and documenting their sales and marketing efforts:

  • American Express business gold
  • Bank of America online banking
  • Chase credit card
  • Citibank business card
  • Citibank online banking
  • Discover Card
  • Everbank
  • First Tech Credit Union
  • ING Direct
  • Jwaala (demo only)
  • Mint
  • Netflix (non-financial)
  • PayPal
  • Revolution Money
  • US Bank
  • WaMu
  • Wells Fargo

Wells Fargo promotion displayed after logging out from online banking
(27 March 2009)

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Are Paper Statements on their Way Out? American Express to Force Up to 7 Million Cardholders into Electronic Statements

By Jim Bruene Posted on
Categories: American Express, Credit/Debit Cards, Electronic Statements

image Today’s American Banker tells of AmEx’s plans to force electronic statements on an undisclosed portion of its corporate cardholder base, said to number more than 7 million accounts worldwide (note 1). This is probably a bit of an exaggeration, as it’s more likely that paper statements are being eliminated as a standard account benefit and must be negotiated separately for an additional fee. The company admitted there would be exceptions for those without Internet access or those that still required paper for customer billings.

But it’s still a watershed moment. Today, paper statements are a standard feature of most banking and credit card relationships. In a study last year (note 2), Javelin Research found that only 15% of customers had given up paper statements entirely on their primary credit card.

Currently, the burden falls on the financial institutions to beg, trick, incent, or “green” their customers into giving up paper (see inset above from Texans Credit Union). For example, Citibank frequently uses an interstitial (splash screen) after login that encourages estatements (screenshot below). See our previous posts on those efforts.

The tables are about to turn. With severe profit pressure on most big banks and card issuers, most (all?) will soon adopt the American Express approach and offer electronic statements free of charge, with paper available for an extra charge. This is how checking-account pricing has evolved over the past two decades as banks migrated customers to check truncation as the standard, with paper checks returned for an extra fee (note 3).

Interstitial displayed after logging in to Citibank’s online banking
(9 April 2009, note 4)

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Notes:
1. This decision will impact less than 10% of American Express cardholders, which number 92 million worldwide as of 31 March 2009, up 4% from 88 million cards a year ago.
2. Javelin survey of 2,500 consumer head of households in 2008.
3. For no valid reason any more, checks are still returned on my U.S. Bank “free” small business checking account for a $10 monthly fee.
4. Example from our latest Online Banking Report: Selling Behind the Password.

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Be the First All-Solar Bank in the First All-Solar City, Babcock Ranch Florida

By Jim Bruene Posted on
Categories: Green Marketing, Strategies

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image If the developer’s plans go forward on his aggressive timetable, the world’s first all-solar city may break ground yet this year, with the city center up-and-running as soon as next year. We’ll see.

I wonder what the financial institution(s) of Babcock Ranch will look like? While Morgan Stanley is heavily invested in the project, it’s unlikely they would want to get involved in retail banking in what is designed to be a relatively small city of just 45,000.

But for consumer financial services companies, banking the future denizens of Babcock Ranch could be a great branding opportunity for alt-delivery and green banking concepts:

  • Low impact mini-branch(es) and/or branches located
    within other retail establishments
  • High-end check-scanning ATMs
  • Contactless terminals deployed citywide
  • Online banking for consumers and small businesses  
  • Emphasis on paperless billing/banking
  • Loan incentives for electric vehicles, scooters and
    low-impact transportation options

For more info:

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FinovateStartup Conference Offers Live Webcast

By Jim Bruene Posted on
Categories: Finovate

image Every demo at our FinovateStartup and Finovate conference is videotaped and eventually uploaded to the conference website to be viewed later. Typically, the edited videos are available about a month after the conference.

But this year, we will webcast the conference in its entirety live. If you can’t make it to San Francisco next week because of time or budget issues, the webcast is a lower-cost option that provides real-time access to the new demos. 

The webcast will include more than 5 hours of live demos beginning Tuesday morning April 28 at 8:30 AM Pacific and ending before 5 PM. See our previous post for a list of the 57 demoing companies. The exact schedule will be sent to you along with instructions for logging in. To help follow the action, webcast registrants will also receive the 70-page PDF file that profiles all 57 participating startups.

Register online here. Cost is US$495 per computer connecting to the webcast. Note: Online Banking Report subscribers and alumni of past Finovate and FinovateStartup conferences receive a substantial discount on the registration fee (email info@netbanker.com or call 206.517.5021 to obtain your customer discount code).

Press, analysts, and banking industry bloggers may request complimentary webcast access by emailing jim@netbanker.com.   

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Little Earth Day Excitement at U.S. Banking Websites

By Jim Bruene Posted on
Categories: Advertising & Promotion, Bill payment, Electronic Statements, Green Marketing

image Given the financial benefits of driving paper out of the banking system, I was surprised to see little evidence of banks or credit unions using Earth Day to promote paper-saving options (eStatements, electronic bill pay, ebills) or fuel-saving approaches (online banking, remote deposit capture, bank by mail).

I looked at the 30 largest retail banks and the 10 largest credit unions and found just three green banking promos running on the homepage: Sovereign Bank (Santander), Zions Bank, and Citizens Bank (Royal Bank of Scotland).

And none of those were Earth Day specific. A Google search turned up a few credit unions sponsoring shredding days, which are nice, but not really doing much for the environment.

Sovereign Bank (Santander)
Santander’s Sovereign Bank encourages users to go green by signing up for bill pay and ebills. A savings calculator on the landing page allows users to determine the environmental impact of converting bill pay activity from paper to electronic. In addition to the environmental benefits of eliminating paper, the bank promises to plant a tree for every ebill initiated.

The incentive program is conducted in partnership with the bank’s bill payment provider Fiserv/CheckFree (press release).  Similar programs are also in place at BankAtlantic, Fifth Third Bank, PSCU Financial Services, SunTrust and USAAimage

Sovereign landing page (22 April 2009)

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Zions Bank
Zions promotes eStatements in a small mid-page graphic. No monetary incentives are provided.

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Citizens Bank
RBS’s Citizens Bank is pushing its Green$ense checking rewards program that pays users $0.20 per electronic transaction for the next 12 months. Ultra-heavy users (3x per day), could bag up to $20/month in savings.  

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Online Banking Customer Satisfaction Remains High

By Jim Bruene Posted on
Categories: Customer satisfaction, Market Research & Metrics

Three substantial consumer studies were released this week. In total, more than 12,000 U.S. consumers weighed in on their banking satisfaction. All three projects came to the same and somewhat surprising conclusion:

Consumer satisfaction with banks and/or online banking has remained high, and relatively unchanged, despite the events of the past year.

I expected all the bad press, not to mention a couple trillion in bad loans, would drag down scores across the board. But apparently consumers are loyal to their primary financial institutions, or feel sorry for them, and continue to hand out high grades when market researchers come calling. That’s a bit of good news for the future of the industry.

image1.  Forrester’s The Experiences that Satisfy Consumers 2009 (post here) has an interesting comparison across industries and across channels (phone, in-person, and Web) and Web banking was the star of the study (note 2):

  • Banks had the highest satisfaction of all eleven industry categories (note 3) in the Web channel (84%). The low was 66% at health insurers and TV service providers.
  • Banks had the highest satisfaction differential between their online and telephone channels, with Web beating phone by 12 points (84% vs. 72%). The next highest was PC manufacturers with a 9-point differential, followed by Internet service providers at +8 points.
  • And surprisingly, given how much money is spent on branches, banks had the second-highest satisfaction differential between online and in-person, +5 points (84% vs. 79%). First place was airlines, with a 9-point differential. Third place went to wireless providers at +2 points. 
  • Banking was only industry to increase its Web satisfaction rate compared to a year ago
  • Only 2 channel scores beat banking’s Web satisfaction and both of those were in-person experiences: retailers (88%) and hotels (86%)

image 2. comScore’s annual state of the online banking industry (note 4, press release) found that overall customer satisfaction is relatively unchanged during past three years:

  • Percent of total customers who were “highly satisfied” of their primary financial institution
    2007 = 70%             2008 = 72%           2009 = 71%

image 3. ForeSee Result’s annual state of online banking (note 5, press release) found considerable growth in online banking satisfaction during the past 5 years:

  • Out of 100 points, here’s the scores for online banking:
    2003 = 73    2005 = 77   2007 = 78   2008 = 82   2009 = 83
  • Credit unions had the highest satisfaction in the 2009 survey
    Credit unions = 86    Community banks = 82  Large banks = 82

Notes:
1. Forrester: Number = 4,500, fielded Q4, 2008; purchase here for US$749
2. Forrester broke out credit card issuers separately, but their Web and phone satisfaction rates were identical, so I’ve lumped them together to simplify the analysis.
3. The other categories: Airlines, health insurance plans, hotels, insurance providers, Internet service providers, investment firms, PC manufacturers, retailers, TV service providers, wireless service providers.
4. comScore: Number = 4,846, fielded last week of Feb. 2009
5. ForeSee Results: Number = 2,500, fielded March 3-18, 2009

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Apple iPhone Print Advertisements Feature Personal Finance Apps

By Jim Bruene Posted on
Categories: Apple, Bank of America, iPhone, Mint, Mobile Banking, Personal Financial Management

image_thumb8Apple must be one of the more lucrative advertisers these days at the Wall Street Journal. Apple has bought the back page more times than I can count to show off the iPhone and more-importantly, the diversity of applications available (see inset, note 1).

Lately, Apple has run “theme” ads showing applications related to a single category. Last week (Thurs, 9 April), the back of the A section showed personal finance apps (see left column below). Yesterday, the apps all supported small business and ran on the back of Marketplace (B) section (see right column below).

The only app to make both lists: personal finance superstar, Mint, which even scored top billing in the personal finance page, occupying the upper-left corner, where it’s blurb would likely score the highest readership. 

The Apple website also has themed app guides. The managing money page (see screenshot below) features again features Mint, which gets the biggest graphic, Bank of America, who’s app was featured in dozens of Apple ads in 2008 and earlier this year, Bloomberg, Gas Cubby, iXpenseIt, Save Benjis, and Home Finder.

Bottom line: Financial institutions should think about how to add similar money management functionality to their mobile and online offers. As Aite’s Ron Shevlin pointed out in a comment here last week (emphasis added):

…..(the FinovateStartup participants) you talk about are helping people manage their financial lives, while the banks are [still] focused on helping people manage their financial accounts.

Big difference.

Table: iPhone apps listed in recent WSJ ads (clockwise from upper left)

Personal Finance Theme Small Business Theme
Helping you stretch your budget, one app at a time. Helping you run your small business, one app at a time.
Date: 9 April 2009 Date: 15 April 2009
Mint.com (PFM) Credit card terminal
Gas Cubby (mileage tracker) Print & share (document management)
Spotasaurus (parking finder) FedEx Mobile
RepairPal (mechanic finder) Jott (voice recording/transcription)
AllRecipes.com (recipe finder) iXpenseIt (expense report mgmt)
GoodGuide (product finder) Jobs – Time Tracking
WootWatch (cheap gadgets) Analytics App (website analytics)
Save Benjis (shopping comparison) LinkedIn
RN Dining (rewards dining) LogMeIn (remote computer access)
Find an Apartment YellowPages.com
Cellfire (mobile coupons) Mint.com
Barista (how to guide) Quicksheet (spreadsheet)
Wi-Fi finder Air Sharing (file manager)
CompareMe (price calculator) Nomina (name/trademark search)
Loan Shark (loan tool) SimpleMind Xpress (brainstorming)
Small Spend (mini PFM) Keynote Remote (presentation tool)

Apple’s Money Management page on its Website (link, 16 Apr 2009)

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Notes:
1. My apologies for the image quality, taken via iPhone naturally.
2. For more info, see our latest Online Banking Report: Mobile Banking via iPhone.

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FinovateStartup 2009 Conference Registrations Surpass Last Year

By Jim Bruene Posted on
Categories: Finovate

image While there is still plenty of bad economic news, positive reports are starting to trickle in. Hopefully by this time next year, the Great Recession will be in the rear-view mirror.

Our bit of optimistic news is the outstanding turnout for our second annual FinovateStartup conference taking place April 28. Thanks to the creativity, energy, and sheer willpower of fintech entrepreneurs worldwide (note 1), we have 57 startups participating this year compared to 39 in 2008. And we’ve just surpassed last year’s event registration total ensuring that the auditorium will be buzzing with an audience ready to feed on all those new ideas.

And more important than raw attendance numbers, is the fact that subjects being tackled this year are much bigger and potentially more disruptive than last. It’s almost mind-boggling when I look at the list of demos we’ll see in a single day (note 2): 

  • A bank optimized entirely around the mobile channel
  • A new approach to decoupled debit
  • Several approaches to dramatically lowering transaction costs at
    the online point of sale by bypassing Visa and MasterCard
  • A mutual fund created to invest in unsecured personal loans
    originated online in a social environment
  • New peer-to-peer services supporting borrowing and payments
  • The integration of financial management tools with payments accounts
  • Platforms that allow financial institutions to customize their own
    financial offerings around market segments and/or personal finance needs
  • New, transparent marketplaces for buying and selling debt instruments in
    large quantities ($ billions potentially)

We truly appreciate the show of support in a trying year and even now are plotting ways to get even more startups on stage next year. For a complete list of startup demos, see our Quick Guide.

If you haven’t registered yet, this is the last week to do so and save $100 over the last-minute price.  

Notes:
1. See our previous post, “Why Financial Technology Remains Important”
2. It’s a single-track event, so you’ll be able to see all 36 demos. The secret, each lasts no more than seven minutes.

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Failure to Launch? Consumer Remote Deposit Posts Very Slow Growth

By Jim Bruene Posted on
Categories: Deposits, Checking, Savings, CDs, Market Research & Metrics, Remote Deposit Capture

image_thumb10_thumb2Two-and-a-half years after USAA was first to offer remote deposit capture to consumers via standard scanners (post here), it appears the technology has failed to gain much of a following outside business circles (notes 1,2).

Quoted this month in Digital Transactions magazine (PDF here, pp. 58-62), John Leekley, founder of RemoteDepositCapture.com, estimates that only 75,000 consumers (and apparently 1 cat, see inset) use the service, less than 0.001% of all U.S. households.

Some other numbers from the article by Jane Adler:

  • After 14 months, EasCorp, a CUSO out of Burlington, MA, has just 24,000 registered users across its 30 credit union installations, or 800 per CU (see previous post)
  • Other EasCorp metrics:
    • Average deposited check = $900
    • Average deposits per session = $1,200
    • Total amount deposited in past 14 months = $80 million
    • At $900 per item, that amounts to about 90,000 checks processed, or about 4 per end-user
    • Cost per deposit for CU clients is $0.25 per item for “higher volume” customers
  • The initial experience at First Command Bank is more encouraging: Since launching in November, First Command Bank has registered 1,600 users for its Deposits on Command across its online customer base of 65,000, for a 2.5% penetration rate (note 3). First Command has a total of 85,000 customers online and offline, so the overall penetration rate is about 2%.
    • Total remote deposits per month are 1,200; slightly under 1 per registered user per month
    • There is no fee for the service, but you must be an estatement user or have an investment account to qualify. Daily deposit limit = $5,000

First Command Bank homepage (14 April 2009)
Remote deposit capture (Deposit on Command) is one of two items that rotate in the top banner-ad slot  image_thumb1_thumb1

Notes:
1. We are referring here to CONSUMER remote deposit, not to be confused with the very successful business remote deposit.
2. In the same article, Fiserv was cited as projecting growth to 1 million users by the end of 2009, although there was no indication as to when the prediction was made or whether it included business users.
3. If Bank of America had similar usage, it would be well on its way towards 1 million registered users (625,000).
4. Photo from CheckFree/Fiserv

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American Express Adds a Helpful Hint When Typing a Structurally-Wrong Password

By Jim Bruene Posted on
Categories: American Express, Security & Privacy

image Thank-you, American Express, for removing one of the little annoyances of online commerce. During login, the company warns users when they’ve typed more than the maximum eight characters allowed in the password field. The login page suddenly becomes grayed out and the error message appears on the right (see screenshot below).

It would be interesting to see what this small change saved in reduced password resets and customer service calls.

Bottom line: If you have unique password requirements, such as special characters, consider telling customers during login if their password is invalid for that reason. Sure, it makes it slightly easier for crooks to guess, but mostly you’ll just have a bunch of slightly-less-annoyed customers.

American Express log-in message when attempting to use a password that doesn’t fit the company’s requirements (15 April 2009)

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Merging Online and Offline Channels via Twitter

By Jim Bruene Posted on
Categories: Branch Banking, Channel Integration, Social Networks, Twitter

image I’ve gradually come around to Twitter as both a communications and research tool. A year ago it could have been dismissed as a niche platform for a few hundred thousand hyper-social geeks. But now that adoption has tipped, with 14 million users last month (see chart), the power of the network is opening up new opportunities.

My favorite: Tweeting bakeries (note 1). A British company, Poke, has developed a little box that sits behind the counter at a bakery.  Whenever a new batch of rolls or pastries is ready to serve, the baker turns a dial to the specific item and presses a button. That automatically sends a pre-programmed Tweet to the bakery’s followers. It’s called, appropriately, BakerTweet.

Bank opportunities: Unless you merge operations with a bakery (maybe not such a bad idea), financial institutions have nothing nearly as exciting to Twitter about. However, there are useful items a branch could broadcast to its followers:

  • When the drive-thru lane was empty (or vice versa)
  • When branch queues have disappeared (or vice versa)
  • When platform officers are available
  • When specific specialists are available in the branch (e.g., home loan officer, small business banker, investment specialist)
  • When certain popular employees are working (could be tweeted to just the followers of that person)
  • Branch special offers
  • Local community events and specials

And if you really want to gain some global recognition, enable payments for the baked goods via Twitter (see TwitPay). For example, users could respond back to the bakery’s tweet with:

@bakerytweet hold 2 chocolates pay $2.45 via @twitbank

Assuming users were registered at BakeryTweet and Twitbank, that’s all it would take to order and pay for two warm rolls (note 2).

image

Notes:
1. Kudos to Springwise for finding this idea here. 
2. Yes, there are fraud, privacy and reliability issues to work through, but as long as purchases are kept under a certain floor, the exposure would be minimal. 
3. See also the Harvard Business article last week (9 April 2009) by John Sviokla, Twitter: A Marketer’s Duct Tape.

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MasterCard Launches ATM Hunter iPhone App

By Jim Bruene Posted on
Categories: ATMs, iPhone, MasterCard, Mobile Banking

image A few weeks ago there wasn’t a single dedicated ATM finder in Apple’s App Store, and now there are three, not counting the bank-branded versions (more on that below). MasterCard is the latest entrant with a cute app called ATM Hunter (see inset; iTunes link) launched six days ago.

The free app can lead you and your iPhone to any of more than one million ATMs worldwide. The app automatically senses your location and lists nearby machines. And it’s integrated with Google maps so you can map the location with a single click.

Unlike other ATM finders, MasterCard’s version has a helpful filter to zero in on the following ATM types:

  • surcharge-free
  • drive-thru
  • wheelchair accessible
  • 24-hour
  • deposit sharing

It also has a “share” function (upper-right of second screenshot below) that allows you to text the ATM location to a friend or to yourself for later reference. 

Here’s what’s in the app:

                         Main page                                   List after “location” search

image     image

              Filtering by feature                                           ATM detail

image     image 

The launch is supported with a webpage at MasterCard’s Priceless.com (see screenshot below).

Bottom line: It’s an excellent app that should prove popular; however, I wonder if MasterCard is encroaching a bit on its banking clients’ turf. Location-based ATM/branch finders are one of the cornerstones of a retail bank’s mobile application (note 1). If customers are already using MasterCard’s app, they have less reason to go mobile with their own financial institution.

On the other hand, the vast majority of financial institutions that don’t yet have their own mobile app can safely recommend MasterCard’s app and keep customers from using a banking competitor’s app. 

MasterCard’s ATM Hunter landing page (link, 10 April 2009)

image

Notes:
1. For more info, see our Online Banking Report on Mobile Banking: iPhone Edition.
2. Apple is approaching 1 billion downloads since the App Store opened last July. The company is celebrating the coming milestone with a $15,000 gift to the person that downloads lucky 1 billion. It also has a huge ticker on its website (below) that counts to the big number in real time (here).

Billion-download counter at Apple’s website (10 April 2009, 6 PM Pacific)

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