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MySpace Meets Quicken: What’s Happening in Social Personal Finance

By Jim Bruene Posted on June 12, 2007
Categories: Best of the Web, Buxfer, Online Banking Report, Wesabe

Last week, I promised to provide more details on the conclusions in our latest Online Banking Report, Social Personal Finance: Will social networking revolutionize personal finance? It was mailed to subscribers last Friday, so it should be making its way through inter-office mail as we speak (or download here).

Here are the major themes/conclusions from the report:

Social networks are the new main street; so banks that want to be where their customers are should NOT ignore social networks.
There are many ways to bring social networking concepts into mainstream banking sites, for instance blogs and forums allow conversations to take place with both customers and employees participating.
The leaders in the space now are startups such as Wesabe and Lending Club. But what they gain in social networking savvy, they more than give back in lack of trust. So financial institutions are still incredibly relevant in social personal finance.
In the future, social networks may become so trusted that they can function as a virtual credit union, bringing together members to provide each other with financial services (e.g., P2P lending) or using their clout to negotiate deep discounts with financial providers (e.g., affinity credit cards).

Social personal finance innovators profiled in the report include:

Buxfer — Named OBR Best of the Web in the report for several pioneering features, including login via third-party APIs, transaction input via email, file appending, Google gadget, and budget alerts
Wesabe — Also named OBR Best of the Web for its integration of personal spending records with the wider community

We also looked at Mint, Geezeo, Lending Club, Wells Fargo, and Intuit's new Personal FinanceWorks and Small Business FinanceWorks.

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For more information on the report see the landing page here or download the abstract here. And for Colin Henderson's take at The Bankwatch, go here.

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Internet Banking Pioneer Chip Mahan Takes the Helm of Banking Startup Targeting the Pet Care Industry

By Jim Bruene Posted on June 12, 2007
Categories: Small Business, Strategies

I first met Chip Mahan in 1995 when he was at the helm of Cardinal Bancshares and about to launch the first Internet-only bank in the world, Security First Network Bank. That effort eventually spawned S1 Corporation, now a leading banking tech company, with a half-billion market cap.

Unfortunately, the Internet bank was sold off and eventually shuttered by Royal Bank, in a move I've never quite understood. Why would you take the pioneering brand name in one of the hottest sectors of the last 25 years and just close it down? Royal didn't even bother spending the $9/yr to keep the domain name <sfnb.com>, now a generic link site.

After his stint at the helm of S1 ended in October, Chip is back in the banking business taking the reins of startup Live Oak Banking Company. The Wilmington, NC-based company is still in formation. But it recently passed a regulatory milestone, raising $8 million in capital from fewer than 10 investors (see note 1, 2). David Lucht, who worked with Mahan as a credit officer for Cardinal Bancshares, is the Live Oak's President.

Live Oak was recently profiled in the local business press (here), and will apparently specialize in lending to veterinarian practices and kennels.

While a number of banks target health care practices including veterinarians, none appear to be aggressive online marketers with the possible exception of Bank of America, which is the only mainstream financial institutions using Google to market vet practice loans (note 3). Also, BB&T's Vine Street Financial lists vet practices on its menu of commercial health care lending services (see inset).

With Mahan at the helm, its almost certain their will be a web-based component to the bank's strategy. This is the long-tail of lending at work, targeting a highly specific area that needs a national focus in order to create enough volume to survive. Eventually, we expect to see national lenders targeting hundreds, if not thousands, of business niches online.

For more information on small business strategies, refer to Online Banking Report #107/108 (here).

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Notes:

1. It looks like the company may have registered the URL <liveoakbanking.com> as their URL, but its not currently live and the registration info is unlisted.

2. Here's what the North Carolina banking commission has listed for the company:

Required capitalization: $8 million
Prospective employees: 15
Address: 2605 Iron Gate Dr., Wilmington
Principals: James "Chip" Mahan, CEO; David Lucht, president
Focus: Business lending to vets, kennels and children's day care operations

3. Source: Google search, 14 June 2007, from Seattle IP address, 2 PM PDT

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Amplify FCU’s MoneyTracker Features Personal RSS Feeds

By Jim Bruene Posted on June 11, 2007
Categories: Best of the Web, Credit Unions, Jwaala, Personal Financial Management, RSS

When researching new mobile banking launches (see our earlier post here), we ran across one of the more innovative financial institutions in the country: Austin, TX-based Amplify Federal Credit Union <goamplify.com>, a $400 million asset institution with 40,000 members. The CU's tagline, Bank less. Live more. is right on target for the majority of financial consumers.

It's possible that Amplify uses more of the ideas we've featured in Online Banking Report and NetBanker than any financial institution we've come across. For example, cafe branches with free WiFi, mobile banking (WAP), Web 2.0 look and feel, high-yield checking (up to 5.1% APY), online chat, fee-based ($5.95/mo) value-add checking account (Amplified checking) loaded with online and mainstream features, and a host of other services from college planning to eBay bidding (see menu here). One surprising omission: no blog.

OBR Best of the Web
But our favorite feature, and winner of our fourth OBR Best of the Web 2007,* is Amplify's new personal finance management program, MoneyTracker. MoneyTracker uses natural language search so members used to Googling there way through the day will feel right at home. Instead of using slower drop-down search, a customer wanting to review recent Costco purchases simply enters "costco this year" in the search box.

The program was developed by Austin startup, Jwaala, which announced it in November. Amplify, which went live March 5 (press release here), is Jwaala's first installation.

MoneyTracker also includes an account aggregation engine so accounts at any financial institution can be tracked. And like eBay, it allows users to turn any search into an automatic alert with the option of receiving the information via email, SMS, or an RSS feed (see inset). As far as we know, Amplify is the first financial institution in the U.S., if not the world, to institute personal RSS feeds for its customers, and it is the basis for the Best of the Web designation.

Amplify posted a series of six videos (here) that do a great job explaining Money Tracker, an important part of gaining trial. The style, copywriting, on-screen talent, and staging, are among the best we've seen online.

Amplify's Main MoneyTracker page (link here):

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*OBR Best of the Web awards are given out occasionally for features that raise the bar in online financial services. It is NOT necessarily and endorsement of the company or its full product.

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Industry Participants See Capital One’s "Portable Debit" as Potential Disruptive Technology

By Jim Bruene Posted on June 11, 2007
Categories: Capital One, Debit Cards

The current reader poll on American Banker's homepage (here) is seeking opinions on Capital One's new "decoupled" debit card. It's a new MasterCard debit card that can be attached to any checking account by processing transactions through the open ACH system. Cards can be used in PIN or signature mode. Capital One began issuing the new product to credit card customers in March and has signed a co-brand deal with an unknown grocery chain.

Interestingly, of the 70% of respondents with an opinion (excluding the "too early to judge" category), more than half chose "Holds potential to disrupt status quo" (see chart above). The poll was first posted Friday morning (June 8) and runs for a week. Check here Friday for the final results.

While it's certainly not a scientific sampling, and it's in the free zone so anyone can respond, the results tell me that the product has the attention of the banking community. Whether it catches on with consumers is another matter.

For more information on Capital One's new product:

Aite Group 13-page report
Javelin's blog entries part 1, 2, and 3
Colin Henderson's Bankwatch post
American Banker's June 5 article

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Prosper Borrower Seeks "iMoney for iPhone"

By Jim Bruene Posted on June 7, 2007
Categories: P2P Lending, Prosper, Search Engine Marketing

When researching my earlier post, 10 Ways for Banks to Leverage Apple iPhone Hysteria, I happened to search for "iphone loans" at Google (see results below). Not really expecting to find anything, I was shocked to see the first result pointing me to a recent loan listing at Prosper (see inset, full listing here).

Unless this is a stealth PR ploy from Apple (doubtful), the enterprising NY waitress who posted this Prosper loan request, is riding the iPhone wave to nail down decent terms on a $1,000 loan, which she says will be used to buy the phone.

Julestar01, who by the way has a great future in marketing ahead of her, used the eye-catching graphic above along with the killer title, iMoney for the iPhone. After being highly recommended by the leader of her Prosper Apple User Group, including his/her first bid for the full grand at 13.20%, the loan is now fully funded at 12.55% with more than seven days remaining. It has already attracting 20 bidders causing the rate to fall 20 basis points even as I wrote this post. I'm sure there will be many copy-cat requests after the success of this one.

It does provide another way for a bank to leverage the iPhone hype: jump in and fund this loan, then you can say you are the first bank to make an iPhone loan.

Another fascinating observation, and the real reason for this post: Prosper, not Apple, or AT&T, or even Citibank, has the number one organic link on Google for "iPhone loans" at absolutely zero cost. That's the first-mover advantage at work.

Page 1 Google search results for "iphone loans"
(10:00 AM PDT, 7 June, 2007, from Seattle IP)

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10 Ways for Banks to Leverage Apple iPhone Hysteria

By Jim Bruene Posted on June 7, 2007
Categories: Advertising & Promotion, Cingular, Mobile Banking, Service

Apple's iPhone has garnered the kind of media hype we haven't seen since Windows 95 launched Aug. 24, 1995. I don't know if people are lined up at AT&T Wireless/Cingular stores yet, but I'm sure we'll see huge crowds mugging for the cameras at midnight, June 28.

But unlike 1995, when only Wells Fargo could brag about "Windows 95 compatibility," most banks offer services that will work on the iPhone, at least to some extent. While the phone has not been made widely available to third-party testers, the built-in Safari browser provides website designers with much of what they need to make website functions "iPhone compatible." One issue: The phone is not expected to support Java (see Design Issues below).

Product & Marketing Ideas

Here are 10 ways to jump on the iPhone bandwagon:

1. iPhone loans: It costs $500 or $600, not including the monthly AT&T fee. As a promotion, you could offer term loans, specifically designed for purchases of the iPhone (see note 1). (See our next post for more info on the Prosper loan listing to the right.)

2. iPhone rebates: Offer a $50 rebate for customers who buy an iPhone with your credit or debit card, then sign up for online banking/bill pay/estatements or whatever online service you are promoting.

3. Announce iPhone compatibility: You might want to hold off on this until you can run tests on an actual phone. But if you are compatible with Safari, you will most likely function fairly well on the iPhone.

4. Create an iPhone landing page designed specifically for the 336 x 168 screen, complete with its own URL <iphone.yourbank.com> or <yourbank.com/iphone>.

5. Advertise under "iPhone" or "iphone banking" on Google: There will be zillions of searches on this term this summer. If you had some type of iPhone-related promo this could provide significant (albeit expensive) traffic.

6. iPhone giveaways: You wont' be able to give them away for new accounts, but a sweeps with an iPhone prize would be a good attention grabber.

7. iPhone compatibility FAQs: As soon as you've tested the phone with your banking services, document it all with screen captures and post to your website. You can run a link of your homepage with an eye-catching, "see how to bank at mybank with your iphone."

8. Designate one or more customer service reps as "iPhone banking" support complete with their own Web page, email address, IM address, and mobile phone number of course.

9. Use the iPhone as an attention getter in general promotions for online banking or mobile banking: You can use the name recognition to further your mainstream marketing efforts, for example, "You don't have to have an iPhone to bank with us. Any web-enabled phone will connect with our mobile site, <m.yourbank.com>.

10. Create an iPhone banking users group, club, forum, or blog: To promote banking with you via iPhone, entice iPhone owners to register their phone with you and join the club. Club participants could get a special t-shirt and special attention from the bank such as a dedicated "iPhone banking" tech support rep (see #8) and iPhone tips and tools delivered via email/RSS.

Design Issues
From a design standpoint, the main concern is how your website, and online banking area, appear on a 168 x 336 pixel screen size (3.5 inch screen). The screen is designed to display the entire webpage with users using the touchscreen to zoom in on specific areas for better readability (see below). Apple has a good demo of how it works here.

If you have a standard 800 x 600 layout, it will be shrunk to about 50% of its normal size when viewed on an iPhone. Another design complication: user's can rotate the phone 90 degrees and instantly go to portrait mode (336 x 168) (see example screenshots an Marketing Pilgrim here).

Here's how Fandango looks in full-screen mode and then zoomed in on the box-office list:

Financial Institution Action Items
Of course, step one is convincing your boss you need an iPhone right away for research purposes. Then, at a minimum, address iPhone compatibility in your FAQs as well as briefing your service reps that deal with website access questions.

Whether you go decide to ride the wave further depends is up to you. And looking back at this list, I realize I probably should have stopped at five. But the point is, banks and credit unions can use current events to drive traffic, generate buzz in your community, and let your customers/employees know that you are "with it." And please send us picture of you with your iPhone on June 29th and we'll post it here.

P.S. For those of you who want to understand the broader mobile banking trend and how the iPhone fits into it, check out the new mobile banking report from Online Banking Report.

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Note:

1. Alternatively, you could offer an iPhone banking package with "free" iPhone. For example, bundle an iPhone with a checking account, credit card, credit line, etc. and sell for $20/mo with 3-year commitment (and early termination fee), with the customer paying the AT&T monthly charges separately.

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Carbon Neutral Banking

By Jim Bruene Posted on June 6, 2007
Categories: Green Marketing

For the next 18 months, partly because it’s an issue that deserves attention and partly because of the inevitable hype politically-correct issues get during the U.S. presidential election process, climate change will be in the news more and more. And expect politicians to join musicians on the green bandwagon, buying carbon offsets so they can call their campaigns "carbon neutral."

While it's hard to determine yet whether purchasing carbon offsets will ultimately help the planet, we do know that being a good "environmental citizen" has great marketing appeal.* So much, that it even has its own name, "green marketing" with 340,000 online mentions according to Google. Credit unions and bank, large and small, have joined in, some making billion-dollar commitments (see previous coverage here).

Whatever your motivations, if you are looking to join the carbon offset trend, a company you should look at is Toronto's Zerofootprint, a non-profit information clearinghouse and source of carbon credits (see it's "carbon store" here). The company, who's website drips "Web 2.0," helps users figure out what their carbon "debt" is and to buy their way into the neutral zone (or you could go even go "carbon negative," if you bought more credits than your energy-consuming debits required). A consultancy in the field is The CarbonNeutral Company.

To see how businesses can work with Zerofootprint, check out the co-branded calculator accessible through the Air Canada website (hosted by Zerofootprint here). Travelers can determine the exact carbon cost of their trip and purchase offsets immediately with the button at the bottom of the calculator (see screenshot below).

Financial Institution Opportunities

Allow customers the option of going "carbon neutral" with their banking: Banks could follow the Air Canada example, and allow customers to go offset the carbon costs of their banking activity. Customers would enter their average number of trips to the bank, what type of car they drove, distance, and so forth. Customers with estatements would have to purchase less than those that had them delivered. So "carbon neutral banking" would be a great reinforcement of banking online. For extra credit, configure your calculator to show the gasoline cost of the trips to the bank.
Go carbon neutral with online banking: Using Zerofootprint or other carbon exchanges, purchase enough credits to make your online banking service carbon neutral. You could also do the same thing to designate certain branches, divisions, or the entire company "carbon neutral."
Use carbon credits as an incentive to bank online, sign up for estatements, use self-service, and so on. For example, you could offer to offset 1 tonne of carbon for everyone that signs up for estatements (cost is about US$9 through Zerofootprint).

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*I do not mean to sound cynical here. I personally like the idea of carbon offsets and am buying them through Zerofootprint.

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Bank of Stockton First to Launch Text-Based Mobile Banking via ClairMail

By Jim Bruene Posted on June 5, 2007
Categories: Bank of Stockton, ClairMail

ClairMail landed its first bank client last week,
Bank of Stockton <bankofstockton.com>, a $2 billion financial institution headquartered in Stockton, California. It's big news for ClairMail in need of a U.S. contract signing to legitimize its text-based banking approach in its home market. The company made the most of the win with a detailed press release (here), proactive outreach to journalists, and a prominent link on its website.

Bank of Stockton, however, missed a great opportunity to bag some free publicity. There is not a single mention of the new mobile service on the bank's website. They didn't even bother posting the press release. A search for "mobile banking" and similar terms all returned "no results found" (see screenshot below).

If you are about to launch a pioneering service in a hot area, at least post a "coming soon" page and grab email addresses and/or mobile numbers to alert customers when it does become available.

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New Online Financial Services Performance Metrics from Compete

By Jim Bruene Posted on June 5, 2007
Categories: Compete, Metrics & Market Research

The researchers at Compete Inc. have developed a new scorecard that tracks the overall performance of 23 large financial institutions and lead-generations sites (note 1). We will publish this scorecard each month here at NetBanker and we will occasionally drill down into the data at Online Banking Report. To make it monthly scorecard easy to access, it will have its own category, <netbanker.com/compete>.

There are a number of interesting insights from this data:

Card applications were up 9% even though shoppers only increased 1%, helping push conversion to a healthy 21%. In this case "conversion" means they APPLIED for the product. We do not know whether they were approved or not.
Checking applications were up 24% to 182,000, with the launch of ING Direct's Electric Orange having a role in that.
Home-secured loan activity was up sharply from March, increasing 30% in the refi and home equity categories. Purchase loans were also up 23% month-over-month.

Notes:

1. Companies tracked:

Credit cards: American Express, Bank of America, Capital One, Chase, Citibank, Discover

Deposits: Bank of America, Capital One, Chase, Citibank/Citi Direct, E-Loan, Emigrant/Emigrant Direct, HSBC/HSBC Direct, ING Direct, U.S. Bank, Wachovia, Washington Mutual, Wells Fargo

Home Loans: Ameriquest, Bank of America, Capital One, Chase, Citibank, Countrywide, Ditech, E-Loan, LendingTree/GetSmart, Low.com, LowerMyBills, National City, NexTag, Quicken Loans, Washington Mutual, Wells Fargo

2. Definitions:

Shopper: Consumer who visited product-related content at a site in the competitive set. For the purposes of this Monthly Performance Update, a consumer can be counted for each site they visit.

Application: Any Web form requiring the consumer to enter personal info including Social Security Number; counted only when completed.

Lead: Any Web form requiring the consumer to enter personal information, not including Social Security Number; counted only when submitted.

Conversion: = (Leads + Applications) / Shoppers

3. Methodology:

Compete's projections are supported by industry-leading data management and technology. The consumer and industry data is drawn from numerous sources and comprises the largest continuous consumer behavior database in the industry. Its proprietary data methodologies and patent-pending technology aggregate, transform and normalize this data and ensure it is representative of the entire U.S. online marketplace.

People are recruited to join Compete's member community through www.compete.com, the first website to help consumers personally benefit from clicksharing. Consumer data is also licensed from national ISPs and ASPs. This multi-source data collection methodology sets the industry standard for representative and actionable data. Members are protected by Compete's stringent privacy policy and data collection techniques that purge personally identifiable information.

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Hancock Bank Approaches Hurricane Season with Proactive Approach

By Jim Bruene Posted on June 4, 2007
Categories: Public Relations, Security & Privacy

If you live in the U.S. hurricane zone, the memories of the summer of 2005 are still all too fresh. That's why it's great to see Gulfport, Mississippi-based Hancock Bank take a proactive approach to storm season with its "storm readiness" plan released in a June 1 press release (here).*

While normally, your disaster planning efforts rate no more than a deep link on your website, Gulf Coast residents need more prominent reassurances. Hancock does a great job reassuring customers in its press release covering these four areas of storm preparation:

Designated certain branches "lighthouse branches — beacons to safety." These branches stay open as long as possible and re-open as soon as possible. Emergency procedures for employee communications, food, shelter, back-up power, and fuel are detailed.
Offsite backup for its website and online banking so there will be "virtually no downtime."
Data center precautions, including safeguards at its main center, dubbed "the fortress," plus plans for emergency off-site backup.
ATM system procedures and priorities in the event of a prolonged emergency.

Analysis
Overall, this is a good press release and sound plan, especially the concept of "lighthouse branches" which play off the company's logo and branding. It should receive good play in the local media.

However, I couldn't find this info anywhere on the bank's website, other than the press release buried in Investor Relations. This time of year there should be a prominent link to the bank's plan on the homepage or at least in the personal banking section. If you were looking for a new bank in the Gulf area, this would help your decision.

And financial institutions should do even more by making online banking and electronic communications prominent in the disaster plan. Here are eight additional ideas. While, some would require product development, they are relatively minor projects. Financial institution benefits are in italics.

Create a "customer communication plan" that send emails or text messages to customers to keep them informed of developments with branch, ATM, and online banking outages.
Helps bump up online banking and email registrations.
Remind customers how important it is to have up-to-date email addresses and cell phone numbers on file.
Helps improve your delivery rate on marketing and
service messages.
Since customers may not have power, they may need to rely on mobile phones for information. And since waiting on hold uses up precious phone charge time, create a call-back plan for emergencies. Customers would call or text the bank requesting a call back on their mobile.
Helps differentiate you from the competition.
Create an "open branch & ATM" query. Customers could send a text message requesting a list (with address, phone number) of all open branches and ATMs.
Again, differentiates you from the competition.
And if ever needed, will help create lifetime customers.
Let customers use designated branches to charge phones or laptops in the event of widespread power outage.
More differentiation and customer advocacy.
Develop a blog that can be used to keep customers apprised of any changes to banking services. Several employees should be prepared to update the blog through mobile phones if power was out. And at least one person should have access to a satellite phone so they can remotely post updates to the blog (perhaps working with someone outside the disaster zone, who can do the actual typing/posting).
Another great relationship builder.
The Web-based branch finder should include a search for "lighthouse branches."
Expose your impressive disaster preparations to
prospective new customers.
Refer customers to disaster preparation website resources for so they can put together household stockpiles and family communication plans.
More customer advocacy, not to mention the "right" thing to do.

*Full disclosure: We have done some website evaluation work in the past for Hancock Bank.

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