Taking the High Road in Credit Monitoring and Identity Fraud Protection

By Jim Bruene Posted on
Categories: Credit Reports & ID Theft Protection, Finovate, Identity Theft, Identity Theft 911, Security & Privacy

I was looking at Geezeo's new Facebook app this morning (more on that later), and I noticed one of the best credit report monitoring ads I'd ever seen. 

Instead of focusing on the negative aspects of your credit history, the banner ad features "testimonials" of the significant savings available with good credit (the banner above claims a $310 savings in her house payment). The stories are provided under the header, "Credit Diagnosis." And, I was initially impressed after clicking through the ad to find a good, landing page with more of the same.

However, the mostly-anonymous company behind the banner, FreeCreditReportsInstantly.com uses a $1, 7-day trial come-on for its $29.95/mo credit report monitoring service. I have no problem with the company charging what the market will bear. And to its credit, FreeCreditReportsInstantly (FCRI) does disclose the go-to fee on the first page of the application. But I think the typical young Facebook user is not going to be happy seeing $29.95 monthly fees on the credit or debit card.   

Why would anyone pay $360/yr for credit monitoring?
The Internet was supposed to make it hard for companies to charge 2x to 3x the going rate when dozens of competitors were just a few clicks away. But here we have a company doing just that and evidently bringing in enough revenue to afford a Facebook ad buy, not to mention holding down the number 3 ad slot on Google searches for "free credit reports" (note 1)?

The answer is complex. It has to do with consumer confusion over the whole business of credit scores, ID theft, and the government-mandated free reports which is what most Googlers are looking for when they type "free credit report." And consumers must share part of the blame too. In a rush to get "something for nothing" they blindly fill out "free trial" forms without reading the fine print or taking time to investigate alternatives.

Taking the high road
But the dizzying array of credit monitoring options provides an opportunity for banks and credit unions to do the public a great service, and turn a nice profit, by educating their customers and offering value-priced alternatives: 

  1. Credit scores/monitoring: Instead of pushing credit monitoring services that are too confusing and too expensive for the mass market, provide customers with their credit score each month, and if it takes a dive, alert the customer and provide the tools to access their credit report to investigate any potential problems (see our post yesterday and note 2).
  2. Identity fraud support: Citibank's Identity Theft Solutions advertising blitz was a nice humorous break from most bank advertising. However, I think it did a disservice by making full-blown identity fraud seem more commonplace than it really is. Consumers needn't be frightened, they need to be careful, they need to understand what to look for, and they need to know where to turn in the event of suspected fraud.

And since most banks and credit unions don't have the resources to provide full-service fraud assistance, turnkey solutions providers have stepped up to fill the need. We are lucky to feature one such company at our Finovate conference next Tuesday in NYC.

Full-service education and victim response from Identity Theft 911
Five years ago, I met the entire Identity Theft 911 team when they were in Seattle making sales calls. It was refreshing to see someone in the identity fraud space taking a genuine interest in helping the end-user out of a jam, rather than simply trying to get them on the hook for a $150+/yr monitoring service. And over the years, I've kept in touch with the company chairman, Adam Levin, as he's worked the trade shows to garner support for Identity Theft 911 and his other company, Credit.com. Adam will take the stage Tuesday morning in NYC to demonstrate the full range of his company's resources to help banks and credit unions make their customers feel MORE secure, rather than more afraid (see screenshot below of AFL-CIO Employees Federal Credit Union's Identity Theft 911-powered services, link here).  

Note:
1. Search performed from Seattle IP address mid-morning on 26 Sep 2007.   

2. For more information on credit monitoring, see the latest Online Banking Report here.

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Mobile Banking = Online Banking

By Jim Bruene Posted on
Categories: Citi Mobile, Finovate, mFoundry, mShift

If you are looking for a single article that summarizes the current state of mobile banking, check out Karen Epper Hoffman's feature article, Mobile Banking: Where's the Business Case in this month's BAI Strategies. Karen is one of the most important writers in the financial services press, with a rich industry background, and I always enjoy speaking with her and reading her work.

The business case is indeed elusive: Unfortunately, Ms. Hoffman is not able to answer the question raised in the headline. But it's not her fault. It's simply too early to know how the mobile banking business case will shake out. With just a few hundred thousand users out of 200 million U.S. adults, even finding someone who's used mobile banking is difficult, much less figuring out if they'll do expedited payments on the phone or decrease their costly chats with your service rep.  

There are literally hundreds of factors that will determine whether mobile becomes a standalone profit center or is just one more cost center. Many of those factors won't be known until well into the next decade. In fact, we are likely headed towards a convergence of phone, laptop, and entertainment device, that will make the question moot.

But it matters little: Banks have no choice in the mobile matter. Whether or not the business case is made with straightforward fees (e.g., signature debit) or with a bunch of impossible-to-measure intangibles (e.g., online banking), banks WILL support mobile access, just like they support telephone and online today. 

But HOW they support it during the next five years is a matter of great debate and fortunately our upcoming FINOVATE conference (note 1) includes mFoundry the company behind the most high-profile launch to date, Citi Mobile, and MShift, the company that supports more than 80% of all the live U.S. mobile banking programs.

mFoundry
Even after all the hype of the past 12 months, the fact remains that only one bank, and one vendor, have launched a fully downloadable, custom mobile banking app: Citi Mobile powered by Sausalito, Cal-based mFoundry (see previous coverage here). And with a reference account like Citibank, mFoundry is on everyone's short list for 2008/2009 deployments of downloadable mobile banking & payments apps. I've had a chance talk to CEO Drew Sievers several times this year, the last time at the Mobile eCommerce Summit in June, and I look forward to seeing the latest from his pioneering company at FINOVATE.

MShift
While Citibank may have the highest profile launch to date, the vast majority of financial institutions offering mobile banking, 90% or so, use the platform of San Jose, Cal-based MShift. After meeting CEO Awele Ndili in May at a Metavante user conference, we wrote about his amazing hold on the smaller end of the market and listed the 32 clients they had live as of mid-May (here). There have been several launches since then including one of our favorite credit unions, Tech CU, also located in San Jose (news release here). The thing I remember most from my first meeting with Dr. Ndili is how he manages to run simultaneous live demos from 3 or 4 different handsets at time, including a check image on a tiny flip phone screen. It will be interesting to see if he tries to perform that trick on the FINOVATE stage.
 

Note:

1. FINOVATE 2007: DEMOing the Future of Finance includes 7-minute demos from five key mobile players: mFoundry, MShift, ClairMail, Firethorn, and Monitise Americas (see previous coverage here). While the auditorium seating is sold out, we have a few remaining seats available in a 40-seat overflow room down the hall. That room features a great view of the live audio-video feed of the demos. To register, visit the FINOVATE site and click register in the upper-right corner.

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E-Mailbag: Everbank Addresses Falling Rates with Three Deposit Options

By Jim Bruene Posted on
Categories: Deposits, Checking, Savings, CDs, Email Marketing, Email Samples, Everbank

With the personal finance news full of reports of falling deposit rates, EverBank strikes back with an eye-catching email overview of its high-yield deposit choices:

  • Yield Pledge Money Market
  • Yield Pledge CDs
  • FreeNet Checking

The bank's yield pledge, to always offer a rate in the top 5% nationwide, helps take the customer's mind off the actual rate itself, which may not be as high as they'd like (see screenshot below). Not that EverBank isn't competitive on rates. The bank still offers 5% APY's in a number of key deposit products including its Money Market account and most CDs. And it sweetens the pot for new customers with 3-month introductory rates of 6%.

Analysis
Nicely done email with an appropriate, and eye-catching graphic, to-the-point copy, personalization, the yield pledge, and links to all the right places.  

Grade: A

Email header 

Sent: Tue 9/25/2007 2:04 PM
From: EverBank News [service@everbank.com]
To: <your email address>
Subject: 3 high-yield accounts – to fit your style

Personalization: First name in salutation

Email body

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Keeping Your Credit Score at 98.6 Degrees

By Jim Bruene Posted on
Categories: Credit Reports & ID Theft Protection, Metrics & Market Research, Washington Mutual

Just like a fluctuating body temperature is an indicator of your underlying health, your credit score is a similar measure of your financial well being. Yet, in a recent poll of Facebook users age 18-24, we found that fewer than 20% had seen their credit report or credit score within the past year (see note 1, 2).

Furthermore, today's tightened credit market has put a premium on having a good credit score, even in the upper end "prime segment." Here's the tease from the top of the Personal Journal section of today's Wall Street Journal, "Lending squeeze raises the bar on credit scores." (article here, see note 3).

Clearly there is a need here. Most U.S adults, especially younger ones, should track their credit score at least quarterly. However, fewer than 10% of adults subscribe to credit monitoring services, partly because of their cost and partly because of the hassle (see note 2).

Banks, credit unions and card issuers are ideally suited to fill this gap. At a minimum, low-cost one-click access to their credit score would provide customers with an important early warning system to stave off potentially debilitating personal finance woes (note 4).

Notes:

1. Be aware that this is a completely unscientific online poll of 200 Facebook users who say they are age 18-24 in their Facebook profile. The results should NOT be projected to the larger population. It was conducted on July 23, 2007 by Online Banking Report (see note 2).

2. For more information, see the latest Online Banking Report on Credit Monitoring.

 3. And over at another Dow Jones effort, the FiLife blog, the writers have been on a bit of a mission to pressure banks and card issuers to make credit scores freely available to customers (see post here). FiLife is a joint effort between Dow Jones and IAC, the parent of Lending Tree and GetSmart.  

4. According to the FiLife article cited above, among top-10 banks, only WaMu currently provides free access to credit scores for its credit card customers (see inset).

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Anatomy of a Webpage: Citibank Business Credit Card

By Jim Bruene Posted on
Categories: Citibank, Credit Reports & ID Theft Protection, Credit/Debit Cards, Security & Privacy

In terms of website design, I find most Citibank pages to be somewhat busy. But overall, the pages usually work well due to the eye-catching graphics, appropriate use of colors, and good copywriting.  

I've had a Citibank Business AAdvantage credit card for at least a decade. Even though I don't visit the site often, maybe once every few months, I find that it's generally easy to find what I'm looking for. 

As you can see in the business card example below, the bank uses purple and green "buttons" to catch your eye, then inserts important key words within them to drive action:

  1. The purple, "Fraud is not your fault" reinforces that customers are not liable for unauthorized transactions, something most people are still concerned about, even though their liability is minimal. The button leads to a page that discusses advanced fraud fighting tools such as virtual account numbers and a picture card.
  2. The navy, "How much have I spent lately?" allows users to quickly drill down into a key area of concern for most card users. Although not as powerful as Wells Fargo's My Spending Report (previous coverage here), it's still a good starting point for many users.
  3. Finally, the bright green, "Help prevent an identity crisis" pitches the bank's credit monitoring solutions (note 1).

Citibank Business Credit Card main account overview page (22 Sep 2007)

Note:

1. For more information on bank and credit union opportunities selling credit report monitoring see our most recent Online Banking Report.

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One Last Chance for FINOVATE 2007

By Jim Bruene Posted on
Categories: Finovate

Last week, we announced that our Oct. 2 FINOVATE conference was sold out, just a month after it was first announced (here). But while touring the venue Friday, we learned that we could use a nearby 40-person room as an "overflow location." The space is right down the hall from the main auditorium and will carry a live video and audio feed of the DEMOs. Those in the overflow room will have an excellent view of the action on screen and will be able to fully participate in the after-demo networking. 

To join 200+ fellow financial services professionals, register by Thursday, Sep. 27, at our FINOVATE website (click on "register" in the upper-right corner)

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Free iPods (again)

By Jim Bruene Posted on
Categories: Advertising & Promotion

I’m not sure why I’m so drawn to the free iPod promotions. Maybe it’s because Citibank never sent me my free one in 2004. Granted, I didn’t jump through all the post-signup hoops, but I’m still sore about it. 

Today, Bank Deals blogged about the latest bank to offer the coveted music player, Plano, Texas-based ViewPoint Bank. This summer (here), I critisized Key Bank and TD Bank for using boring graphics to publicize the sleek device. ViewPoint perhaps does a bit better depending on your tastes (see screenshot below). You certainly can’t miss the promotion, but the bank is still missing an opportunity to showcase the sexy new video nano, rather than the oh-so-2006 version shown in its homepage ad.

The fine print: Like most banks, ViewPoint requires direct deposit to score the music player. And, it must be at least $600/mo, so students take your business elsewhere. But the checking account is free, so the qualifying bar is not set too high. The offer runs through year-end.

One more caveat: If you splash a $150 freebie across the homepage, you better have an answer when your current direct-deposit customers come in for their free iPods as thanks for their ____ years of loyal support. One helpful technique, use cookies so that you don’t even show the offer to existing customers.   

ViewPoint homepage (20 Sep 2007)

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FINOVATE 2007 Sold Out

By Jim Bruene Posted on
Categories: Finovate

Thanks to Serge Van Dam, Head of Marketing at New Zealand-based M-Com, for purchasing the final seat a few hours ago for our Oct. 2 conference. We look forward to seeing everyone in NYC in 10 days.

We have a wait list forming in case we find a few extra spaces during our walkthrough at the venue tomorrow. Please email, finovate@netbanker.com to add your name to the wait list.

For those not attending in person, there should be plenty of news from the conference. More than 20 members of the media plan to attend including American Banker, The Wall Street Journal, The Financial Times, Money Magazine, Yahoo Finance and more.

We're the first financial services conference to proactively court the blogging community, and we're proud to have bloggers from four countries in the room. Plus, we'll have live blogging here. And soon after the show, all 20 demos will stream from our FINOVATE website.

Thanks again for your support.

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Online Banking & Lending Tools at FINOVATE

By Jim Bruene Posted on
Categories: Andera, Collections, Finovate, Loans & Credit, Online Resources (ORCC)

Much of what we cover at NetBanker falls under the traditional "marketing 4 Ps": product, place, price and package. But, there are also hundreds of important things going on behind the scenes that can make or break a company's Web presence. We are lucky to feature two important tools at our upcoming FINOVATE conference Oct. 2 in NYC.

Online Account Opening from Andera
During the past two years, few areas have received more attention within banks and credit unions than the tricky business of online account opening. It's an absolutely critical element of turning a profit online but also an area rife with risk, error, and the potential for turning away potential new business. We are pleased to have Andera on stage, a company we are seeing more and more of as we drill down through the offerings of major credit unions. The company is a major force in online account opening with more than 125 clients including: Alliant Credit Union, Associated Banc-Corp, General Mills FCU, American First FCU, Toyota Federal Credit Union, First Mid-Illinois Bank & Trust, Energy First Credit Union, CSCEFCU, Service Credit Union, and Bank Rhode Island. Its recent alliance with Yodlee (press release here) opens up even more opportunities. We look forward to seeing its account-opening process in action at FINOVATE.

Web-based Collections from Online Resources
I first met Online Resources in 1992, when its national sales rep visited Seattle to show us their cool smartphone-based banking service. I was new in my R&D assignment looking at alternative delivery methods for US Bancorp, and I really thought there would be a market for this hybrid call center/online banking solution. Of course, that was before the Web burst on the scene three years later. Luckily, Online Resources didn't have all its eggs in the telephony-based basket and adapted quickly to become a leader in Internet banking and electronic payments. The company is a two-time OBR Best of the Web winner, in 2003 once for its novel MoneyHQ premium online banking service and via acquisition of InCurrent which, in 1998, took home one of our first awards for its futuristic online credit card management service. 

At FINOVATE, Online Resources will be showing its Virtual Collection Agent. I have not yet seen it in action, but from the briefing it sounds like a smart way to improve actual collection yields while maintaining the customer relationship during a very tricky time. 

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Voice-to-Text Banking

By Jim Bruene Posted on
Categories: Mobile Banking, Voice-to-Text

In all the discussions about mobile banking — will it be text-based, go through a mobile website, or do 225 million U.S. mobile phones all have to download some sort of an app — there is little discussion on an obvious use case, voice to text.

The only person I've heard talking about this publicly is Richard Crone of Crone Consulting, a fixture on the conference circuit, and the keynoter at SourceMedia's Mobile eCommerce conference in June (see our previous coverage here).

Here's what I want my bank, card company, and credit union to offer (assumes my mobile phone is registered with my bank):

Call my bank's 800 number from my mobile phone, then without touching the keypad, simply say "text me" and hang up (or for multiple account holders, "text me checking," "text me credit card," and so on). Or if background noise is bad or the connection isn't clear, let me press a single number on the first VRU tree that triggers the same text message.

Then, the bank sends me an SMS message with my current and available balance and last ten transactions, or whatever else would fit in the 160 character message. Ideally, I could text back to get more transactions or even make a transfer. But I'll take just the simple one-way message for now.

Would I pay for it? No. But I'm not the core market, since I'm online 24/7. But if I'm a a twenty-something, on the go and managing my account to the last $25 every week, a reasonable fee ($0.25) per message would seem fair. Would it decrease overdraft income? Yep, some. But you'd have a happier customer and potentially some decreased call center expenses.

Zillow Example
While I don't know any banks using this approach, Jott, which is a voice-to-text Web 2.0 company, recently used Zillow's API to offer voice-to-text delivery of home values (see Zillow blog post here). After registering with the sites, users can call Jott, say an address, and receive a text message with the estimated home value of the property. While this is not exactly a mainstream app, it's surely valuable for real estate agents, home buyers, and nosy neighbors.

For more information on this topic read our Mobile Banking & Payments Report.

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New Personal Finance Site: Pertuity Direct

By Jim Bruene Posted on
Categories: Personal Financial Management, Pertuity

Does it seem like every NetBanker blog post lately is a plug for our FINOVATE conference (oops…plug #1)? Hmm … maybe we are a little stuck there.

OK, here's an online personal finance startup that's NOT presenting at FINOVATE (plug #2), Pertuity, the brainchild of ex-PNC Bank exec Kim Muhota. I like the overall look (below), decked out in our FINOVATE colors (plug #3), but clearly it's a placeholder for something more substantive (see note 1).

The Dare to Compare function, while provocatively named, is basically a well-dressed financial calculator that shows you where you stand in terms of income, savings, and debt compared to the rest of the country and those in your age group. It's a nice feature, but hardly unique and certainly not enough to attract visitors, let alone bring them back (see note 2).

UPDATE: After seeing Colin's comment (below), I looked at the site again and realized that I missed the "create a new group" function that allows you to compare your income, savings and debt against other pre-defined subsets. That's an interesting angle and could create a more sticky site with users going back to see how they are growing their income/savings/debt compared to various peer groups. I look forward to seeing how this plays out at Pertuity.

The Rate Survey, Expert Advise, and Blog sections are also just bare-bones link areas with little original content so far. The site appears to have launched just last week, so we are not criticizing (yet), just pointing out the current facts.

The website says "coming in 2008," so we'll be sure to check back in six months and see if they live up to their homepage boast:

….as we gear up towards our launch in early 2008; when we will bring to market a disruptive set of products that will uncomplicate your life, simplify your money and free your dreams.

Note:
1. The homepage has an overall calm look and feel, refreshing for a finance site. But Pertuity needs to lose the clip art of the three scary "suits" in the lower right and enlarge and break up the block of 10-point type in the middle (same goes for the micro-sized font in the blog).

2. Colin Henderson blogged positively about the Dare to Compare feature yesterday (here), but so far anyway, I don't share his enthusiasm that it's "quite revolutionary."  Colin probably has a better crystal ball than I, so I'll reserve judgement until the official launch. (Also, see my update above; obviously, Colin did a better job reviewing the functionality than I.)

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Firethorn and Monitise Make Major Announcements

By Jim Bruene Posted on
Categories: CheckFree, Finovate, Firethorn Mobile, Metavante, Mobile Banking, Monitise

September, October and November are traditionally great months for new product announcements. True to form, at least five major U.S. mobile banking announcements appeared last week. Brandon McGee posts a quick synopsis here.

Of special interest were the announcements by Firethorn/CheckFree and Monitise/Metavante, all of which will be presenting at our upcoming FINOVATE conference in New York City on Oct. 2 (see note 1).

Firethorn
Firethorn ended a relatively quiet stretch with an important announcement, the addition of Ogden, Utah-based America First Credit Union to its mobile banking consortium which includes Wachovia Bank among others (see previous coverage here). The top-10 credit union has more than 400,000 members and gives Firethorn a reference account in the credit union and non-mega-bank categories. The service is expected to go live in early 2008.

We've had the pleasure of hearing the Firethorn story several times, but going into the critical fall marketing period, it will be interesting to hear an update on the Firethorn rollout with AT&T and Verizon Wireless.

Monitise/Metavante Joint Venture
Although disclosed in March of this year, the Monitise and Metavante joint venture was officially announced last week (here). Monitise crosses the Atlantic with mobile banking and payment solutions already widely deployed in its United Kingdom home market under the MONILINK brand. Its client list reads like a who's who of U.K. financial and telecom players: BT Global Services, T-Systems, HSBC, First Direct, Alliance & Leicester, Royal Bank of Scotland, NatWest, Vodafone, Orange, O2, T-Mobile and Hutchison 3G. The JV's Oct. 2 presentation at FINOVATE marks the first time the new entity, Monitise Americas, will be on stage to DEMO the new service expected be available by year-end.

Note:

1. Our FINOVATE 2007 DEMO conference is expected to sell out some time next week, so if you want to reserve a place you should register ASAP at www.finovate.com.

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