Links from My Presentation at the National Credit Union Directors’ Convention

By Jim Bruene Posted on
Categories: Conferences, Credit Unions

image Thanks to everyone who attended my presentation: Ecommerce Opportunities for Credit Unions yesterday at the CU National Directors’ Convention in Las Vegas. 

Here are the links to the examples cited:

Mobile banking

Second-generation online banking (online banking 2.0)

Connecting with people

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Finovate 2009 Demoing Companies Revealed

By Eric Mattson Posted on
Categories: Finovate

finovate2009_white_low.jpg

September 29th, 2009 is going to be a memorable day in the history of financial technology. Why? Because on that Tuesday, dozens of leading fintech companies will take the stage in NYC at Finovate 2009 to debut and demo their latest and greatest product innovations. The quality of the ideas that will be demoed on stage is very high this year and we’re incredibly excited to showcase them to you.

The demoing companies selected (that we can reveal so far) are:

These companies will be showcased to an audience of senior financial/banking/credit union executives, influential press, industry analysts, venture capitalists, bloggers, tech companies and entrepreneurs.

A few of the organizations already committed to attend include: Bank of America, Citibank, WSJ, Microsoft, HSBC, Wells Fargo, American
Express, Dow Jones, the Financial Times, E*Trade Financial, SunTrust, ANZ,
Capitol One, Financial Insights, Discover, Sybase, Cardinal Venture Capital,
Intuit, Consumer Reports, DataMonitor, Canaan Partners, The Economist,
BusinessWeek, and Aite Group.

We’d love to have you join us at the fall event and watch the future of finance/banking unfold onstage. If you register today you’ll save $200 via the very-early bird ticket discount. Please note that those prices expire on Friday August 7th at midnight.

ericphoto.jpgEric Mattson is CEO of Online Financial Innovations, the parent company of NetBanker, Online Banking Report and the Finovate Conference Series. He can be reached at [email protected].

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Lending Club Offers New Lenders $50 to Get Started on its Peer-to-Peer Platform

By Jim Bruene Posted on
Categories: Email Samples, Lending Club, Loans & Credit, P2P Lending

image This morning Lending Club emailed its existing lenders encouraging them to refer friends to become lenders on the peer-to-peer lending platform. The peer-to-peer lending pioneer says that is has added 11,000 new lenders this year, an impressive 1,600 monthly pace. Lending Club now has 20,000 registered lenders (note 1).

The pitch: Instead of paying referral fees, the $50 incentive is earmarked entirely for the new lender/investor. Basically they get a free trial of the service. The offer is available for only two weeks, otherwise Lending Club risks being flooded with new accounts that just want to get a hold of the $50.

Analysis: Typically, companies pay a fee to user who made a successful referral. Sometimes with an equal incentive to the new customer. While that may result in a slew of new accounts, converting them to long-term profitable participants can be difficult.

I believe the more-sophisticated investor/lender attracted to Lending Club will be MORE likely to make good referrals if they don’t personally benefit from the referral (note 2). No matter how much users like Lending Club, if they are being paid to spam friends, it just doesn’t feel right. While Lending Club may get fewer referrals this way, the ones they do get should convert better in the long run.

Lending Club is making it incredibly easy to spread the word. Existing customers can use an automated wizard to send messages to friends (see second screenshot) or prospects may simply enter the referring customer’s member name to qualify for the $50. And there appears to be no fine print on the offer other than the Aug. 15 expiration date.

Lending Club email (sent 4 Aug 2009 at 6 AM Pacific)
Subject: Give your friends $50 to try Lending Club

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Landing page
Includes tools for automating the process of reaching out to friends

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Notes:
1. So far this year, $21 million in loans have been originated at Lending Club, approximately $1,000 per lender.
2. Lending Club does pay $25 to the referral source for new APPROVED borrowers. That’s an affiliate marketing strategy and makes economic sense because it’s only paid for approved loans. 

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U.S. Bank Integrates Self-Service Collection Module into Online Banking

By Jim Bruene Posted on
Categories: Loans & Credit, US Bank

image One benefit of running a financial services publication is that my own financial mistakes can be used for editorial material. My latest faux pas resulted in learning first-hand about U.S. Bank’s self-service collection module integrated into online banking.  

The details: Apparently, last month I hit negative $300 in my business checking account during some intra-day moment. The daily closing balances never fell below a healthy balance, so I didn’t realize an automatic “overdraft” transfer from our credit line had occurred (note 1). 

Since I assumed it was unused, I never looked at the credit line statement, and therefore neglected to pay it off or make the minimum payment. Then yesterday, when I went online to pay a bill, I noticed a new line item on my account ledger, Payment Assistance Options (see first screenshot below). I know that if my bank is offering to assist me with my payment, I’m in deep trouble.

I followed the link to where a well laid-out module took me through my options to pay back the delinquent loan (see screenshots 2 and 3). I paid off the $300 plus an extra $39 for the late fee, $3 for the overdraft fee, and a $2.79 finance charge. That’s $44.79 in penalty fees, pretty expensive for a 42-day $300 loan (note 1), but low cost for a blog entry.

Bottom line: The self-service collection module is a good addition to online banking and should save the bank costs in routine collection efforts where the user simply forgot to make a payment. Even though I hated the $39 late fee, I’m glad the delinquency didn’t progress further until it landed on my credit report.

1. US Bank main account management page showing collection function (29 July 2009)

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2. Landing page outlining collection options

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3. Promise to pay page
Note: Can pay by Web, mail, express mail,

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Note:
1. Yes, closer monitoring of our checking account transaction register would have identified the transfer. But like many business owners, I prefer to spend time in other areas of the business.

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1,000th iPhone Finance Application Added to Apple App Store Today

By Jim Bruene Posted on
Categories: Apple, iPhone, Mobile Banking

imageToday marked an Apple App Store milestone of sorts, the 1000th application available in the Finance category (USA store). Finance is less than 2% of the total store, which now stands at 63,300, according to AppShopper.com. 

Lucky number 1000 was Easy Mortgage (iTunes link), a $0.99 mortgage calculator from Italian developer Nexus (screenshot below).

image Four other new Finance apps debuted today, just missing the 1000 mark: 

  • #997 MLM: A multi-level marketing guide from PTAJ Marketing for $2.99
  • #998 Renting: A guide to renting a house or apartment from also from PJAT Marketing for $2.99
  • #999 Forex: A guide to foreign exchange trading again from PJAT Marketing
  • #1001 TaxTax: A $1.99 sales tax calculator from Canbuffi Web Development

Bottom line: These thousand apps are just the tip of the iceberg for the Finance category. It will likely grow to well over 10,000 during the next few years as most major banks and credit unions add their own apps to the mix. 

Currently, there are fewer than 50 financial institutions with their own dedicated app, including eight of the top 15 (most popular based on recent download volume): 1st (Bank of America), 2nd (Chase), 3rd (Wells Fargo), 4th (PayPal), 8th (E*Trade), 12th (Citibank), 13th (USAA) and 14th (multiple banks via Firethorn).    

For more info on the features and benefits of a good financial institution iPhone app, see our recent Online Banking Report: Mobile Banking via iPhone (March 2009). 

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Bank of America Implies that Branch Network Could Shrink 10% in Next Three Years

By Jim Bruene Posted on
Categories: ATMs, Bank of America, Branch Banking, Metrics & Market Research, Mobile Banking

imageIn what will surely be the first in a long string of similar headlines, the top of  yesterday’s Wall Street Journal Money & Investing section declared:

BofA Plans to Cut 10% of Branches

The article, which has been picked up by nearly 100 news sites in the past 24 hours, reported that Bank of America was planning on reducing the size of its 6,000-branch network. There were no details on timing or whether the bank was retreating from certain markets or was simply pruning overlapping branches broadly.

But in later interviews with bank execs, it sounded like Bank of America was merely predicting a gradual shrinkage in its branch network over the next three years, and had no firm plans for specific closures. Here’s a followup quote from president Liam McGee as reported by Charlotte NPR station WFAE:

“I think <CEO Lewis> was asked a question, ‘Boy, could there be x-percentage less branches in the next few years?’ And he was just saying, ‘Yeah, could be, and if there was it would be in magnitude of this as opposed to a much higher number.'”

McGee says the bank is going through a 3-year evaluation process that could result in fewer branches, but that no particular number is targeted. He says customers’ changing habits are driving the process.

What I found more interesting in the debate were some of the numbers the bank tossed out showing the growth of it’s non-branch delivery:

  • Nearly 50% of deposits are made in ATMs…up amazingly from 33% six months ago. The bank didn’t say whether this was NUMBER of deposits or VALUE of deposits, but it’s likely the former. Also, it’s unclear if remote deposits made via scanner are included in the total. That new technology is making a significant dent in branch-based deposits at many financial institutions.
  • 2.8 million customers are now using the mobile channel which was introduced in mid-2007. That’s an average of about 120,000 new customer per month. However, growth appears to have accelerated slightly this year. In early Feb, the bank said it had 2 million mobile banking customers; so in the past 5.5 month, growth has been just under 150,000 new users per month.   
  • The bank has a 60% market share in online bill payment; an amazing penetration for a bank with 12% of the country’s deposits. 

Note:
1. See our Online Banking Report: The Demise of the Branch (April 2006), for more on the long-term trends in the mix of branch and alternative delivery.

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ING Direct’s Electric Orange Checking Gets Bill-Payment Facelift

By Jim Bruene Posted on
Categories: Bill payment, Epayments, ING Direct, Website Usability & Design

image ING Direct’s (USA) paperless-checking account, Electric Orange, will get a new bill-pay user interface over the weekend (see first screenshot). The direct banking giant has also jazzed up the logo (inset) for its online checking option introduced in early 2007 (previous post).

The new GUI attempts to make bill payment more understandable. With paper and electronic delivery to merchants, person-to-person payments (also paper or electronic), and expedited payments thrown in the mix, it was hard for users to know exactly which option to select (see second screenshot for old user interface). 

ING Direct has reorganized payments into four functions and clearly identified the free (#1-3) vs. fee (#4):

1. Bill pay (paying merchants)
2. Person2Person (sending to an individual’s bank account)
3. Send a paper check
4. Overnight a check (for $20)

The company is also adding the following features (see third screenshot):

  • Electronic bill statements (ebills)
  • Email due-date reminders
  • New sorting options
  • Expanded recurring payment options
  • Simplified navigation
  • Clearly shows estimated payment arrival date

Customers have been notified through two emails that various aspects of bill pay will not be functioning beginning over the three-day weekend as the system is converted. 

Analysis: Overall, it’s a significant improvement, but there are still confusing aspects for novice users. For example, how do I decide between Person2Person and Send a Check? (see note 1) Why should I pay $20 for overnight, when the same delivery terms seem to be available in free bill pay? I’ll withhold final judgment until I have a chance to use it next week.  

1. New bill-pay interface (link, begins 25 July 2009)

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2. Previous user interface (22 July 2009)

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3. Landing page describing the changes (link, 23 July 2009)

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Notes:
1. Answer: You have to have the person’s bank account info to use the P2P option.
2. For more on bill payment, see our Online Banking Report on Epayments (also part 1) (published in 2005) and the Online Banking Report 2009 through 2018 Forecast (published Jan 2009). 

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Pitney Bowes Goes After Remote Deposit Capture Market with Email to Postage-Meter Clients

By Jim Bruene Posted on
Categories: Email Marketing, Email Samples, Jack Henry, Remote Deposit Capture, Small Business

image Pitney Bowes (PB) hit me with a cross-sale message this morning, and surprisingly it was for a banking service, remote deposit capture (see email below). Because we already do ACH transactions through PB to load our postage meter, it’s something I would consider buying from them, especially since our business bank does not offer RDC.  

The service called Click Deposit (note 1) works with any bank or credit union checking account and is powered by Jack Henry ProfitStars. The cost runs $39.95 to $149.95 per month, depending on volume. You get up to 150 monthly scans at the lower level and 1,000 at the high end. Buyers must sign a nine-page contract (PitneyBowes_RDC_app.pdf), committing to the service, and leased scanner, for 36 months.

Because I don’t want to lock us in at $500/yr for three years, I think we’ll pass on this deal. Hopefully, we’ll be able to tap a lower-cost iPhone-based service in the near future, such as that offered by WV United FCU (see previous post).  

Email from Pitney Bowes (22 July 2009, 9:36 AM Pacific)

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Landing page (link)

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Note:
1. Although, Jack Henry announced the relationship in May (press release), I found no mention at the main Pitney Bowes site (pb.com) or the services site (pitneyworks.com), so this may be a marketing test.  

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Addison Avenue Credit Union Provides Secure VIP Access Powered by VeriSign

By Jim Bruene Posted on
Categories: Mobile Banking, Remote Deposit Capture, Security & Privacy, VeriSign

image A few weeks ago, I was lucky enough to tour the British Museum’s exhibit on the history of money. And one thing that remains the same throughout the millennia, a concern about the security and authenticity of the various objects used to convey wealth.

It’s no surprise that security is the number-one online banking concern of today’s consumer. Had there been market research three thousand years ago, I’m sure security would have been at the top of the list of fears of the Chinese rich enough to hold a cache of cowrie shells (inset).  

imageSo, until we figure out a way to eradicate crime, financial institutions need to address security concerns head-on and provide tools for consumers to take more control (note 1).

That’s what I love about Addison Avenue FCU’s launch of VeriSign’s Identity Protection (VIP) security tokens. Addison Avenue members now have the tools to make their online banking extremely secure, should they desire to. And with set-up charges of $30 to $48 (waived for mobile) and an annual fee of $10 (waived the first year), the program is relatively self-funding (screenshots below).

As an added bonus, the “VIP Access” theme, even though it’s powered by a security vendor, provides a nice boost to member relations. It also gives the CU an iPhone (link to app) and Blackberry presence it wouldn’t otherwise have. 

Addison Avenue e2: The VeriSign program is one leg of a three-part effort dubbed E2, that the credit union launched today (press release; see third and fourth screenshots below).

The three core features:

  • VIP security: as outlined above (link)
  • E-deposit: remote check deposit via basic in-home scanner (link)
  • Mobile banking: mobile web-based (link)

Addison Avenue security key landing page (link, 21 July 2009)
A short informational video brings the service to life.

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VIP token options shown on VeriSign’s website

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Addison’s three-part “e2” effort is highlighted on its homepage

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E2 landing page (from homepage)

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Notes:
1. Granted, most customers are not willing to spend the extra effort to bulletproof their accounts.  So extreme security measures such as this should be optional and carry a nominal extra fee. 
2. For more info on addressing security concerns, see our Online Banking Report on Security Marketing (published in 2005) and our more recent Online Banking Report on New Security Techniques published nine months ago.

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Email Unsubscribe Best Practices for Banks, Credit Unions and Other Financial Services Companies

By Jim Bruene Posted on
Categories: Email Marketing, Marketing

image It’s been three years since I last went through my inbox to unsubscribe from the marketing and information lists I no longer read. At that time, I still used email to keep up on ecommerce and banking news. Now, that task has moved almost entirely to RSS, and I rarely read any broadcast email these days. 

During a two-hour paring process to delist 40 to 50 subscriptions from email, I paid close attention to how each company handled that bit of negative news and jotted down a few best practices for banks, credit unions, and other financial providers (note 1): 

  1. Put your branding on the unsubscribe page, don’t simply default to your email service provider page.  
  2. Greet the customer by name and/or email address.
  3. Provide customer testimonials on the value of the email subscription.
  4. Empathize with their situation (e.g., Getting too much mail?), but reiterate the benefits of staying in touch with you (e.g., We really want our customers to get the best deals!) and gently see if you can change their minds (e.g., Are you sure? Try us for another month, and we’ll do our best to bring you only pertinent offers.) 
  5. If that fails, offer alternative ways to maintain contact, for instance:
    – Less-frequent email (see first screenshot below)
    – RSS feed(s) (see second screenshot below)
    – Better-targeted email on just certain subjects
    – Use a different email address
    – Change email format (HTML vs. text)
    – Use SMS instead of email
  6. If applicable, explain that customers will still receive account-related email messages.
  7. Provide a feedback form so users can tell you why they are unsubscribing.
  8. Confirm the request online and provide links to other areas of your website.
  9. Send an email confirming that the unsubscribe process is complete.

Step 1: TigerDirect unsubscribe page (20 July 2009)
Email subscribers clicking on “unsubscribe” are first asked if they’d prefer to receive fewer emails.
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Step 2: After unsubscribing, customers can sign up for RSS or catalog delivery image

Update: Staples…another good example of offering choices on the main unsubscribe page (screenshot 22 July 2009; hat tip to Loren McDonald, note 2):

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Notes:
1. U.S. emailers must comply with CAN-SPAM regulations at all times. 
2. Here’s a good presentation from Loren McDonald from Silverpop on the subject. 
3. For more info on email marketing, see our Online Banking Report on Email Marketing in Financial Services (published June 2006).

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Activity Tickers Bring Life to Financial Websites

By Jim Bruene Posted on
Categories: Advertising & Promotion, BillShrink, MoneyAisle, Website Usability & Design

image One problem with most websites, as compared to the offline world, is that they are relatively static experiences. Unless you are already familiar with the brand, you don’t know if you are the first visitor this year or if 10,000 others are banging away on the servers right now. There’s no online equivalent to the “line out the door” that signals you arrived at a popular restaurant or night club.  

That’s why I like online tickers that show user activity. In financial services, the best example, active for many years, is Progressive Insurance’s scrolling window of rate quotes (see inset). Geezeo, Zillow and ING Direct (see note 1) have also used the technique (see previous post).

And just this month, two financial providers added similar tickers to their homepages:

Both newcomers have neglected to “time stamp” the activity to demonstrate how recent it was. That’s an important aspect for credibility.

BillShrink homepage with Live Feed (16 July 2009)

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 MoneyAisle’s Live Ticker was recently added to its homepage
(16 July 2009)

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Progressive’s Rate Ticker (16 July 2009)

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Notes:
1. Behind the login screen, ING Direct used to have a counter showing the total amount of interest paid to depositors. But it was discontinued last year at about the $9 billion mark. 
2. Industry participants can purchase MoneyAisle’s real-time deposit pricing data stream for $1,500/year (here).

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Things I Would Gladly Pay (my bank) For: Payment Services for Travelers

By Jim Bruene Posted on
Categories: Credit/Debit Cards, Fee Income

imageHaving just gone through the exercise of calling four banks to tell them I may be using their card outside the country
(see note 1), I’m convinced it’s high time for banks and card issuers to upgrade their online services for travelers. It would not only be convenient for customers, but also develop into a sizable profit center for banks. 

Newspapers have supported automated vacation stops/holds for many years primarily to reduce customer service costs. But credit and debit-card issuers have a much stronger business case. For example:

  • Fewer fraud losses
  • Lower customer service expenses
  • More interchange, exchange fees, and interest income from authorizing more transactions
  • Cross-sales of travel-related services
  • Advertising/sponsor revenues
  • Potential subscription or per-trip fees

Here’s the features I’d like today:

  1. Web-based form to input travel itinerary
  2. Ability to update the itinerary when changes occur
  3. Ability to establish withdrawal limits while traveling
  4. Ability to order foreign currency
  5. Ability to switch my email alerts to text-message alerts while traveling (see Alaska Airlines screenshot below)
  6. Ability to purchase trip insurance
  7. Ability to order prepaid travel card(s)
  8. Ability to see exchange rates and have them automatically forwarded to me on a periodic basis while abroad
  9. Info on using my debit/credit card abroad, including fees, what to do if it’s lost or stolen, calling customer service, cash advances from international banks, and so on
  10. ATM/bank maps at my destination
  11. A few disposable card numbers I could use if purchasing online while out of town
  12. And finally, something I wouldn’t have thought of until this past trip, a guarantee that the bank won’t cancel and reissue my card while I’m traveling (see Wells Fargo, note 1).

And a few more items for the future file:

  1. Automatically track my whereabouts via GPS
  2. Ability to forward travel confirmations (e.g., Tripit.com) so I wouldn’t be bothered to input my itinerary
  3. ATM/bank location on my mobile
  4. Automatic coverage of any bills that come due during the travel period

Pricing
Depending on the package, a one-time travel fee of $5 to $20 would make sense. Or, using the telecom model where every value-added service is sold on a subscription basis, a $4.95/month “frequent traveler” upcharge would be palatable.

Alaska Airlines message service (14 July 2009)
Allows user to choose different messaging options depending on whether they are home or on the road 

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Notes:
1. And despite my advance call, Wells Fargo canceled my credit card mid-trip, without telling me (there was a letter waiting when I got home), despite the fact the fraud the bank was concerned about happened more than two months prior (see previous post). 
2. Image courtesy of http://etc.usf.edu/clipart.

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