Blog - Page 1120 of 1196

WaMu Launches Text-based Mobile Banking

By Jim Bruene Posted on May 19, 2008
Categories: Mobile Banking, SMS, Washington Mutual

WaMu just launched its first foray into mobile banking, a text-message-based (SMS) service believed to be powered by New Zealand’s M-Com (previous post here). Thanks to Brandon McGee, blogging from his vacation via iPhone, for the tip (here).

The free service provides text-based access to balance and history of checking and savings accounts. To use the mobile services, WaMu customers must first register through online banking to activate their phone. Up to five phones can be registered through a single online banking account.

Chase is the other U.S. top-10 bank using a primarily text-based approach for mobile delivery. See our Online Banking Report on Mobile Banking for more information on the growing market, including a 10-year adoption forecast.

More info at the WaMu website:

Share this:

Send Post Twitter LinkedIn Facebook

Virgin Money’s Student Payback Could be the Beginning of Something Disruptive

By Jim Bruene Posted on May 19, 2008
Categories: P2P Lending, Student Loans, Virgin Money

After talking to founder Asheesh Advani on several occasions, we expect Virgin Money (US) to become a disruptive force in the student loan business. And with college costs rising and financing options declining (see previous coverage here), there’s a need now for new approaches.

Against that backdrop, I was thrilled to see a link to Virgin Money’s press release (here) in a Payments News roundup this morning. I eagerly fired up the blog editor to write about it, but quickly realized it was not the product I was hoping for.

While it’s a good line extension, it’s not so new (think Diet Coke adding lime). Student Payback is a well-named service to formalize friends & family loans to students, something the company already did with its Handshake and Handshake Plus services (see note 1).

The main difference, and why it costs $100 more, is that Student Payback allows up to 10 increases in the original loan amount with no additional fee. For example, each semester a new loan can be added without needing a new loan doc each time.

Analysis
Strategically, Student Payback appears to be right on the money. It allows VM to better target the P2P student loan market with the eventual goal of moving upstream, graduating from merely formalizing existing loan agreements to actually brokering multi-party financing deals. For example, initial seed money could come from mom and dad with help from government/school programs. Then as the student progresses through their studies, additional financing could come from Virgin Money partner bank(s) and/or individuals/organizations with an interest in helping students at particular schools (e.g., alumni) or those entering certain fields. Scholarships, grants, internships and other related activities could also be thrown into the mix.

Anyway, there’s lots of opportunity especially with the growth of social networking and the exit of several large student lenders. Two startups showed new solutions at our Finovate Startup conference several weeks ago: GreenNote and SimpleTuition. And there are others entering the market such as Fynanz (previous post here) and Qifang, a Chinese startup TechCrunch wrote about in February (here).

Note:
1. See our Online Banking Report on P2P lending for more information.

Share this:

Send Post Twitter LinkedIn Facebook

Citibank and WaMu Rated Tops in Deposit Account Sales Process in Change Sciences Study

By Jim Bruene Posted on May 16, 2008
Categories: Account opening, Citibank, Deposits, Checking, Savings, CDs, Metrics & Market Research, Washington Mutual

Change Sciences, publishing under the moniker of its new Kantuit research service, just released its latest financial services website evaluation. The report uses proprietary user-experience modeling to rate, rank and compare 18 leading banking sites on how easy it is to find, select, and open a new deposit account online (see Table 1, inset).

Citibank and WaMu were ranked one and two and scored significantly better than the others. Wachovia was third, scoring about 20% higher (the lower the score, the better). Bank of America, Fifth Third and BB&T were in the next tier, finishing about 50% higher. Among mega-banks, U.S. Bank had the worst score, more than double the leaders.

The Change Science score includes various components that show how a consumer may struggle with various aspects of the application process. These individual scores are totaled to come up with the final composite score shown in Table 1 right.

For example, Figure 1 below illustrates the scores for "Effort (expended) finding and learning about deposit accounts" with Fifth Third leading the way with a 0.1 score, compared to Peoples United Bank, the worst of the sample, scoring 19x higher at 1.9

Download an abstract of the research results here (registration required). The full report runs $4,000; a significant investment yes, but you could make that up with just a handful of additional good deposit accounts.

Share this:

Send Post Twitter LinkedIn Facebook

Links from My Metavante User Conference Presentation

By Jim Bruene Posted on May 15, 2008
Categories: Conferences, Metavante

I delivered a presentation on Online Banking Innovations at Metavante's annual user conference in Milwaukee yesterday. As promised, here are the links to the companies and products mentioned. Thanks to everyone that attended and thanks to Metavante for having me.

Blogs:

Young & Free from Common Wealth CU
SourceCode from University of Wisconsin CU
Member Connect from Piedmont CU
The Diff from Quicken Loans

Personal finance:

Investment communities

Lending communities (P2P lending)

Mobile

Chase Bank (text banking)
Safepass from Bank of America

Fees:

Lead Generation

Share this:

Send Post Twitter LinkedIn Facebook

Mobile Banking Uptake: Bank of America Closing in on 1 million Mobile Users

By Jim Bruene Posted on May 14, 2008
Categories: Bank of America, Chase Bank, Metrics & Market Research, Mobile Banking

Bank of America iphone mobile banking In its latest quarterly financial results (here), Bank of America said it signed up 224,000 new users during the quarter to bring its active mobile banking base to 840,000. Assuming the 75,000/mo pace continues through second quarter, the bank should be over 900,000 now and will surpass 1 million in the next few weeks.

Although it’s a nice milestone, it’s only 4% of the bank’s 23+million active online banking users (here). Given that mobile is pushed frequently in the bank’s online banking area, one could argue that 4% adoption is pretty anemic. But according to M:Metrics, less than 14% of U.S. mobile phone users accessed info via the mobile Web in February. So 4% of a 14% universe is much more impressive, indicating the bank has tapped almost 1/3 of the short-term potential for mobile Web-based services, a good start.

To really goose adoption, text-based solutions may need more emphasis (see Chase screenshot below). According to M:Metrics, U.S. text users outnumbered mobile Web users almost 4 to 1 in February, 110 million to 30 million.

Industry forecast update
These adoption rates are about what we expected. In the forecast published a year ago in our Online Banking Report on Mobile Banking, we were relatively bearish short term, projecting 900,000 mobile users by year-end 2007 growing to 2.5 million by the end of 2008.

With BofA reporting 840,000 and assuming they have about half of all users, the U.S. market has likely already passed the 1.5 million mark and will end the year at more than 3 million.

The adoption rate depends on how hard banks push mobile options. Along with BofA, Chase has been one of the most aggressive, showing mobile use in its advertising for several years now (previous coverage here). I love its “Text your account. It texts you back.” Just seven words conveying more than most 3-minute demos.

Share this:

Send Post Twitter LinkedIn Facebook

New Online Banking Report Published: Social Investing Communities

By Jim Bruene Posted on May 12, 2008
Categories: Investment Products, Online Banking Report, Social Media, Social Networks

The latest research from our Online Banking Report division is now available. It’s a double issue (#152/153) released today entitled:

Online Investing Communities: Will social networking revolutionize saving & investing?

We believe social networking will eventually play a large role in online investing, and evidently we are not alone. We found 54 companies involved in investment-information exchange and only six of those have monthly traffic of 100,000 or more.

So, while we like the idea, it will take awhile to catch on. Only about 25% of the U.S. population owns individual stocks, and only a small subset of those make a trade every year. Furthermore, the prime social networking demographics, those younger than 35, are less likely to own or follow stocks. As a result, we project that it will be well into the next decade before adoption passes the 10% mark.

In preparing the report, we asked 400 U.S. online users their thoughts about the idea of sharing investment info in a social network setting setting such as Zecco Share or Motley Fool CAPS (see note 1). While there was a decent amount of interest from the under-30 group, 30% were somewhat or very interested, the overall enthusiasm for the idea among all U.S. adults (21+) was only 22%. See the full report for more research results and the resulting 10-year social investing forecast.

About the report
Subscribers may download the report here as part of their annual subscription plan. Others may purchase it here. The printed version will be mailed to subscribers later this week.

For more information read the abstract here.

Note:
1. We asked U.S. online users for their opinions about social networking for investment information (fielded April 18-19, 2008, n = 401). The top-level results are including in the report. For more detail, All-Access subscribers may download a complete summary PDF document of all questions and answers or download an Excel file of the raw data. In addition, All-Access subscribers may use our online research tools to run their own cross-tabs and filters on the dataset. The dataset will be available next week through subscriber accounts at OnlineBankingReport.com.

Share this:

Send Post Twitter LinkedIn Facebook

Online Financial Services Scorecard: March 2008

By Jim Bruene Posted on May 8, 2008
Categories: Compete, Metrics & Market Research

Summary
According to data from Compete’s consumer panel, March rebounded from the lower traffic in February. Every product, except standard savings accounts, posted increases in the number of applications. Credit cards were the biggest gainer (up 24% in shoppers, up 13% in applications) following sharp declines the past few months. Home loans market performed similarly, with double-digit increases in applications for both purchase (up 15%) and refinances (up 12%).

New this month, we have valid year-over-year comparisons shown (see note 1). Compared to a year ago, both checking and credit cards applicants and shoppers have risen significantly. Home loan shoppers are up slightly, but applications are up.

Commentary

Credit cards saw a large jump in both shoppers and applicants. The credit crisis seems to have benefited the credit cards market as applications, especially for balance-transfer cards, have increased. Compared to a year ago, shoppers are up 47% and applicants are up 53%. However, conversion dropped by 2% from February.

Deposits saw overall shopper loss in all three segments during March, but applications for checking were up 2% as were high-yield savings (up 8%). Last year at this time, deposits were increasing across all segments. In March of 2008, however, applicant levels are below what they were in 2007 with 31% drop in high-yield savings applicants and a 7% decline in all savings accounts.

After a terrible February, refinance mortgages posted a 27% gain in shoppers as well as a 12% gain in applicants. Year-over-year refinance applications are up 32% from a year ago. Purchase mortgages also saw a similar improvement from last month with a gain of 23% over last year. Home equity had the largest gain in applications in the month of March as leads/applications (note 2) grew 34%. Year over year, however, applications are down 32% due to the housing crisis of the past few months.

About the Financial Services Scorecard
A year ago, we introduced the Financial Services Monthly Performance scorecard produced by Compete. It summarizes the overall performance of 23 large U.S. financial institutions and lead-generation sites. Refer here for the detailed methodology as well as companies tracked.

Notes:
1. New this month: Year-over-year comparisons are now included in the monthly table. Because of ongoing methodology tweaks, the percentages in this table may be slightly different than if you went back to the data from a year ago and calculated the change.

2. Leads/applicants = Leads or applications depending on whether the site being tracked is a lead-generation site or an actual lender.

Share this:

Send Post Twitter LinkedIn Facebook

Prosper Kicks Off Nationwide Lending with New Slogan and TV/Radio Advertising

By Jim Bruene Posted on May 7, 2008
Categories: Loans & Credit, P2P Lending, Prosper

Armed with a new national lending capability (note 1), new slogan, “Let’s bank on each other,” and a window of opportunity to gain ground on the competition (note 2), person-to-person lending pioneer Prosper is preparing new marketing initiatives which include television and radio advertising. Prosper said in its blog Monday that the ads will begin test runs this week.

The two television spots feature short vignettes of real lenders and borrowers (see screenshot below). Prosper has also posted brief “behind-the-scenes” videos of the borrower and lender meeting while giving gushing testimonials about the service.

There is also a series of seven 30-second radio spots:

Meet the lender/borrower spots featuring same pairs as the TV ads (2 ads)
A young student borrowing from Prosper
A small business person borrowing from Prosper
A youngish woman borrowing from Prosper for debt consolidation
A man borrowing from Prosper for home improvement
A man borrowing from Prosper for a car loan

Preview the ads here (note 3).

Analysis
It will be interesting to see how the advertising is received. From a branding perspective, I think the ads are extremely effective, doing a good job communicating the benefits to both borrowers and lenders. And Prosper positions itself as a smart bank alternative without getting overly negative (e.g., Lending Tree’s $100-million “When banks compete” campaign in the late 1990s) or going so over the top (think WaMu) that you can’t recall who made the ad (see previous coverage here).

One thing I’m sure of: Prosper did a great job showcasing the ads on their website, including the very Web 2.0 touch of posting “behind-the-scenes” videos of the TV commercials.

Notes:

1. Prosper recently changed its process so all loans are originated by Utah industrial bank, WebBank, then resold to the winning Prosper bidders. The TV ad above even carries the fine print that, “Prosper lenders are loan purchasers.”

2. Prosper’s primary competitor, LendingClub, is currently operating at limited capacity as it seeks additional licensing/authority from regulatory bodies (coverage here). It, too, uses WebBank to originate all loans made through its platform. The latest entrant, Loanio, debuted its services at our April 29 Finovate Startup conference, but is still a few weeks away from a launch. A number of other P2P startups are in various stages of development with launches expected within the next 12 to 18 months.

3. For more information on the P2P lending market, see our Online Banking Report: Person-to-person Lending 2.0

Share this:

Send Post Twitter LinkedIn Facebook

13% Would Use Banking in Facebook

By Jim Bruene Posted on May 6, 2008
Categories: Facebook, Metrics & Market Research

In an unscientific poll of 500 Facebook users (see note 1), we found that 13% of respondents are interested in accessing their bank balance through their Facebook account (red bar below).

Source: Online Banking Report, 9 April 2008, n = 500

While that’s not exactly a ringing endorsement of the idea, it’s potentially enough early adopters to get the service rolling. Most of the interest emanated from younger segments. For example, 18% of 18-to-24 year-olds said they’d probably use Facebook banking (gray bar below) compared to about 5% of the 25-49 group (green and yellow bars below).

Source: Online Banking Report, 9 April 2008, n = 500

But it will take education to move “Facebook banking” into the mainstream. The majority of respondents, 70%, said there is “no way” they’d bank within Facebook and another 13% said probably not, resulting in a strong 83% negative rating. Given well-founded concerns surrounding online security, that’s not surprising.

For more information:

See previous posts on Facebook banking apps from mShift and Galaxy
See Online Banking Report on Social Personal Finance

Note:
1. Survey was conducted April 9 through Facebook’s polling mechanism. Total respondents = 500. Respondents are self-selected so the results should not be used to forecast specific demand.

Share this:

Send Post Twitter LinkedIn Facebook

Press/Blogger Coverage of Finovate Startup

By Jim Bruene Posted on May 2, 2008
Categories: Finovate

We are still recovering from an amazing week in the San Francisco sunshine. But luckily our blogger friends picked up the slack with exhaustive coverage of Finovate Startup. It’s great to see blogging beginning to impact the B2B space like it has on the consumer side.

It takes enormous concentration to listen, much less write about, 40 companies in a single day. So thanks much to Erin, Scott, Ron, Brad, Matt, Jeff, Corey, Christophe and the others who tirelessly spent their day bringing the event to life through their blogs, videos, and photos (links below).

Blog coverage:

For a rundown of each company and its demo, see:
— a thorough post in Payments News by Scott Loftesness of Glenbrook Partners
— Erin McCune’s full coverage in her Forte blog
— Christophe Langlois’ live blogs at NetBanker
For critiques of each demo:
— Brad Garland and friends rate each presentation on a 1 to 5 scale on the Banktastics blog
— LazyMan demonstrates he’s anything-but in his review of the 40 presentations at Lazy Man and His Money
For an insightful critique of the value propositions (or lack thereof) presented by each category of presenter, see Ron Shevlin’s Thursday must-read post in his Marketing Whims (and check out the comments as well)
Jeff Stephens at Creative Brand Communications adds his thoughts on several of the themes at The Story blog
Wing Yu at FinancialMedia.org posted his interview with Vestopia CEO Steve Markowitz
RateLadder posts about Loanio

Video coverage:

We’ll have exclusive full coverage of all 40 demos in their entirety at our Finovate Startup website within a few weeks. We also had two blogger/videographers active at the event:

Banktastic has a 7-minute video with excerpts of interviews with Mint, SmartyPig and Credit Karma here; their conference photos are here
Christophe Langlois from Visible Banking shot a number of videos that will be available shortly; his Flickr photostream is here (sample above)

Related press coverage of presenters:

Daniel Wolfe at American Banker writes about two presenters today, Mint and Wesabe
Kathering Boehret at the Wall Street Journal and Michael Arrington of TechCrunch cover Mint’s new investment-tracking features

Share this:

Send Post Twitter LinkedIn Facebook

Wall Street Journal’s Walt Mossberg Loves Mint, Hates Financial Email

By Jim Bruene Posted on May 1, 2008
Categories: Alerts & Messaging, Mint, Personal Financial Management, Security & Privacy

It was online banking week in Walt Mossberg’s popular Wall Street Journal technology columns. Yesterday in The Mossberg Solution, authored by 20-something Katherine Boehret and edited by Mossberg, Mint’s personal finance service received a half-page article so complimentary I had to look twice to make sure it wasn’t an advertisement. Boehret couldn’t find a single thing wrong with the service, although she did wish for bill payment capability so she could do all her banking with Mint. I’m sure she’ll have her wish granted relatively soon.

In today’s Personal Technology column entitled, How to Avoid Cons that Can Lead to Identify Theft, Mossberg himself dropped a bomb which will impact bank-marketing efforts for years to come. His first of seven tips for safe computing:

Never, ever click on a link embedded in an email (from your) financial institution….

That’s harsh, but it’s also understandable why he’d take that stand. Mossberg strives to make technology issues understandable to non-techie readers. However, it would have been better to add, “unless your bank adds account-specific personalization to the messages so you know for sure where they originated.”

Action items
Many financial institutions, including Citibank and Bank of America, have long used personalization to distinguish legitimate messages from phishing attempts. Financial institutions with good personalized messaging should consider a public outreach program to counter the negative perception from the Mossberg column. It also might be a good time to remind front-line employees how to respond to customer concerns about phishing emails.

For more information, see our Online Banking Report on Marketing Security.

Share this:

Send Post Twitter LinkedIn Facebook

FinovateStartup Best of Show Winners Announced

By Jim Bruene Posted on April 30, 2008
Categories: BancVue, Finovate, Jwaala, Zecco, Zopa

An important part of Finovate Conferences, at least for the winners, is the voting process for best demo. All non-presenting attendees receive a ballot which allows them to rate each demo on a scale of one to seven. At the end of the final demo sessions, the ballots are tallied and the presenters ranked 1 through 40 based on the average score. A majority of attendees complete a ballot so it's a good indicator of the group consensus.