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There’s Another Mint in NYC

By Jim Bruene Posted on January 27, 2009
Categories: Advertising & Promotion, Green Marketing

If you live in NYC, you may have seen one of the “other Mint’s” Smart Cars zipping through the streets. If you are familiar with online personal finance, you’re forgiven if you thought the car was an advertising vehicle for Mint.com.

But no, this Mint is a car-sharing startup similar to Zipcar. It uses a Smart Car for its signature vehicle (inset), and also offers other options including a Mercedes and SUV. So far, the company operates only in Manhattan. Since Mint.com is obviously taken, the car-sharing company is using <drivemint.com>.

Mint.com, the online personal finance manager, should consider teaming up with car-sharing Mint. It would be great advertising for both if they can find a way to deal with the brand confusion.

Better yet, a bank or credit union should team up with Mint or other car-sharing companies to use branches for car distribution/parking. Chicago’s Bridgeview Bank (press release) offers a parking spot for the popular I-GO car-sharing service.

Bank customers could receive discounts and/or free memberships to the sharing services with costs billed automatically to the bank’s credit or debit card. Another option: free car rental time could be used as a reward in lieu of frequent flyer miles.

Promoting fuel-efficient cars with shared ownership is an interesting marketing vehicle and a good way to position your brand as socially aware and green.

Car-sharing Mint homepage (27 Jan. 2009)

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35 Financial Tech Companies Already on Board to Participate in FinovateStartup 2009

By Jim Bruene Posted on January 22, 2009
Categories: Conferences, Finovate, Launches

One month ago we announced the 2009 version of our Finovate Startup Conference. Since then, we’ve been busy talking to FinTech startups from around the world. We are glad (and a bit relieved) to announce that we already have 35 committed to demo at the event. There is still an enormous amount of activity and energy in the banking and financial technology sector (note 1).

We are several months out from the deadline, so we expect in excess of 50 startups, along with several hundred bankers, investors and other industry execs to convene April 28 at the UCSF Mission Bay Conference Center (note 2).

While last year’s FinovateStartup was dominated by social-media plays (see logos below), this year we have more diversity, with companies from the following categories:

Alt payments
Financial shopping/comparison tools
Investment management/tools
Mobile banking & payments
iPhone/Android applications, personal financial management/tools
Peer-to-peer lending
Personal credit management tools
Other technologies

Participating companies will be named beginning Feb. 1, but you can save by reserving a ticket now.

Super-early-bird prices that are easy on the budget
We’ve tried to make the conference as affordable as possible recognizing that travel and conference budgets are under constraints. You still have nine days left to snag super-early-bird tickets for $695. Current Online Banking Report subscribers, including anyone in the same company as an existing subscriber, can grab tickets for even less, just $445 each until Jan. 31 (note 3).

Attendees may register here. More information on the event is here.

FinTech companies interested in participating/demoing should email Eric Mattson .

FinovateStartup 2008 presenters (videos of all 2008 demos are here)

Notes:
1. See our post, “Why financial technology still matters,” here.
2. The venue is about two miles south of the San Francisco financial district.
3. If you don’t know if your company subscribes to Online Banking Report, email [email protected] to find out. If qualified, we’ll email your subscriber discount code to you.

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Bank of America’s Second Blog Supports Mobile Banking

By Jim Bruene Posted on January 21, 2009
Categories: Bank of America, Blogs, Mobile Banking, Public Relations

When researching yesterday’s post on BofA’s iPhone app, I searched Google for “Bank of America mobile banking” and ended up at the bank’s mobile banking news blog (see screenshot below).

This is the second blog the bank has launched in recent months. The first supports its MIT Center for Future Banking (post here).

While purists may claim this latest effort is not really a blog because there are no community features such as comments, it’s updated infrequently (5 posts in 3 months, see note 1) and appears purely promotional in nature. The bank doesn’t even refer to it as a blog. The official title is: Mobile Banking Media Center for Bank of America.

But it’s laid out like a blog. The content is arranged in reverse chronological postings, with categories/tagging/permalinks. The variety of content includes YouTube videos, and you can subscribe via RSS feeds.

That’s a blog to me, and a very good one at that. While the core audience consists of press and analysts, it’s a great resource for anyone interested in the bank’s mobile offerings. And as my search yesterday proved, Google has rewarded it with a high organic result, the first position on my search. That can potentially save the bank hundreds of thousands of dollars in search-engine advertising.

Bottom line: Call it what you will, but BofA demonstrates one of the most effective uses of the blog-like format: supporting PR and educational efforts for a new strategic effort (mobile banking) in an easy-to-follow and easy-to-administer format (see note 2).

Notes:
1. There are five posts on the homepage, but if you drill into the top categories, you’ll find some older press releases.

2. For more ideas, see our Online Banking Report on Bank 2.0 Techniques.

3. BofA’s new Blackberry app is shown at the top of this post.

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Bank of America Knocks Mint Off Top of iPhone App Store Finance Category

By Jim Bruene Posted on January 20, 2009
Categories: Bank of America, iPhone, Mobile Banking

Bank of America, which has been at or near the top of the Finance category (free apps) in the iPhone App Store since its July 11 launch, was back at the top today (12:45 PM Pacific). Mint, which has been number one since its Dec. 22 launch, moved to number two.

Contributing to the rise in the App Store standing is BofA’s purchase of a feature spot in the iTunes store (see screenshot below). The release of a new version Dec. 28, is also helping the download count.

The BofA application now leverages the location-based capabilities of the iPhone, automatically showing nearby ATMs without inputting a Zip code (see video below, posted in the BofA mobile media center here).

YouTube video showing ATM search using location-based capabilities.

iTunes App Store main page (20 Jan. 2009)

Note: For more info on the market, see our Online Banking Report on Mobile Banking.

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Lending Club Launches UNCRUNCH AMERICA, a Microsite Advocating Social Lending

By Jim Bruene Posted on January 19, 2009
Categories: Credit Karma, Geezeo, Lending Club, P2P Lending

During the Christmas holidays, Lending Club and its partners launched a clever new microsite, UNCRUNCH AMERICA at <uncrunch.org>. The site promotes peer-to-peer lending as a way to help increase the availability of credit in the United States (see screenshots below).

Joining the effort are four others:

Credit Karma, a provider of free credit scores (coverage here)
Geezeo, an online PFM (coverage here)
On Deck Capital, a small business finance specialist
ChangeWave, an investment research and publishing company owned by InvestorPlace Media

The site explains the concept behind peer-to-peer lending and funnels visitors to Lending Club or On Deck Capital to borrow. Lending Club was promoting the site on its homepage (see third screenshot), but it’s no longer mentioned. And none of the other partners mentions it on their sites.

The site consists of just two pages, the homepage and a Learn More page listing the partners. The homepage uses Flash to deliver five different messages. The red action buttons lead to a special landing page to Lending Club (see third screenshot).

According to American Banker, Lending Club hired Tobin Smith, the chairman of ChangeWave Research, to create the campaign.

Analysis
Overall, I like the UNCRUNCH idea. It’s timely. It has a catchy name. And it resonates with consumers. But companies must be very careful using consumer advocacy as a marketing strategy. While most consumers understand the need for the sponsor to make a buck, they can see right through anything that appears overly self-serving.

In financial services, credit unions have a distinct advantage here. As member-owned cooperatives, their consumer advocacy messages are believable. Shareholder-owned banks have less credibility, but can still pull it off if they back up their words with a record of action.

I think that’s why ING Direct’s We the Savers campaign works (see previous post here). For its entire eight years in the United States, the bank has consistently promoted savings and thrift. So few question its motivations behind the We the Savers petition drive, though clearly it supports the bank’s for-profit savings program.

On the other hand, UNCRUNCH AMERICA was a bit misleading when it first launched (see first screenshot below from Jan 7). But with the recent improvement in disclosing the site’s purpose and primary sponsors, I think it’s acceptable now (see second screenshot below from Jan. 19).

Here are the main improvements:

It wasn’t clear that the primary sponsors were lenders. But the new site includes Personal Loans and Small Business Loans sections that clearly disclose the Lending Club and On Deck Capital involvement. There is also new fine print at the bottom of the page that further identifies the sponsors.
The original copy made it sound like a completely altruistic effort with its main pitch, Invest in America. That section has been completely removed and the site no longer solicits investors/lenders. It’s clear now that the site is designed to generate loan leads. The main button on the homepage was changed from Invest in America to I Need a Loan.

I’m relieved that UNCRUNCH.org has stepped up its transparency. At this point in the financial mess, we need lenders and other financial entities to be totally upfront with the public so as not to invite even more regulation than what is already coming. Given its six-month hiatus in 2008 while it revamped to comply with new SEC requirements, Lending Club should understand that better than most.

Other financial institutions should consider similar cooperative efforts in their local areas. The public could use some positive messages from the banking sector.

1. UNCRUNCH AMERICA homepage before improvements (7 Jan. 2009)

2. Homepage after transparency improvements (19 Jan. 2009)

3. Lending Club homepage featured UNCRUNCH button (7 Jan. 2009)
but it has since been removed

Note:

1. For more info, see our Online Banking Report on Peer-to-Peer Lending.

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Pennsylvania State Employees Credit Union is First to Add Free FICO Credit Scores to Online Banking

By Jim Bruene Posted on January 15, 2009
Categories: Credit Reports & ID Theft Protection, Fair Isaac FICO, PSECU

In what I hope is the beginning of a trend, Pennsylvania State Employees Credit Union (PSECU) is offering free FICO credit scores to its online banking customers. The CU says more than 200,000 members are eligible to receive free scores.

Although, Wamu and HSBC (note 1) both offer free scores for their respective credit card customers, PSECU is the first financial institution to offer scores to checking account customers within the online banking area.

There is no charge for the service, but members must enroll to participate. A new score will be posted online each month in the online banking area. Members also have the option to receive alerts when their scores are updated.

The service is powered by Fair Isaac’s MyFICO service. According its press released today, the company is talking with other financial institutions about participating in the Scores on Statements program. Currently, 1.5 million consumers have access to free credit scores through the service.

Bottom line: Without knowing the financial arrangements, it’s impossible to estimate the ROI. But credit scores have real value to consumers and any financial institution providing them for free is likely to improve its standing. It’s also possible that a free credit score service could be a profit center if fee-based credit report monitoring options are marketed to enrollees of the free service (note 2).

PSECU page explaining the free FICO score program (link, 15 Jan 2008)

Notes:
1. Only HSBC’s Sears Solution MasterCard includes the free scores.

2. See our Online Banking Report on Credit Report Monitoring for more information on the opportunities for retail banks and credit unions.

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SmartyPig Releases Social Savings Metrics; Launches in Australia with ANZ Bank

By Jim Bruene Posted on January 14, 2009
Categories: Deposits, Checking, Savings, CDs, SmartyPig, Social Media

SmartyPig, which launched its social savings program in March 2008 (previous post) and debuted at Finovate Startup (video here), hit the world stage Dec. 16.

The company, operating out of world headquarters in Des Moines, Iowa, partnered with ANZ Bank to launch SmartyPig in Australia. ANZ was able to lay claim to being the first to offer social savings down under (see note 1).

The site is nearly identical to the stateside version, but ANZ has a smidgen more branding (see screenshot below). Also note the new emphasis on being 100% free, a benefit echoed on the U.S. site as well.

However, unlike U.S. partner and part owner, West Bank (note 2), which has the SmartyPig logo plastered all over its site (see screenshot below), the ANZ site has no mention of the product, it even draws a blank using ANZ site search.

Social savings metrics from SmartyPig
Because SmartyPig’s sole emphasis is on goal-based savings, its results provide unique insights into the market. While the company has not released account totals, its partner, West Bank disclosed that total deposit in the program amounted to $5.6 million at the end of Q3.

While that’s less than $1 million per month since launch, since many accounts start very small, it could be a healthy number of accounts. And with the requirement of automated savings additions, the growth potential is excellent. Assuming a $1,000 average account balance (note 3), the company would have attracted more than 5,000 total accounts during its first six months.

After the initial launch spike, site traffic has been steadily increasing to 25,000 monthly visitors in December (see chart below).

SmartyPig has made available information on the savings goals made by users. The data is through Oct. 2008 (except total deposit amount) and includes only the totals from the U.S. site.

Total amount on deposit (30 Sep 2008, per West Bank 10Q): $5.6 million

Primary account holder by age*:

18-25 >>> 30%
26-35 >>> 37%
36-45 >>> 20%
46+ >>>>> 13%

*By law, primary account holders must be 18 or over,
so children’s goals are owned by their parents

Average goal amount across all holders on the following dates:

April 1 >>> $3,900
May 1 >>>> $7,300
June 1 >>> $7,400
July 1 >>>> $7,400
Aug 1 >>>> $7,900
Sep 1 >>>> $7,700
Oct 1 >>>> $8,600

Goal amount by category:

Travel >>>>>>>>>>>>> 21% (Avg = $4,400)
Holiday spending >>> 12%   (Avg = $900)
Electronics >>>>>>>> 10%    (Avg = $2,500)
Home improvement >> 6% (Avg = $12,900)
Unspecified >>>>>>>>> 5%   (Avg = $9,800)
Weddings >>>>>>>>>>> 5%   (Avg = $7,900)
House down payment or addition >>> 4% (Avg = $22,200)
Emergency fund >>>>> 3%   (Avg = $6,600)
Babies >>>>>>>>>>>>>> 3%   (Avg = $5,100)
Home furnishings >>>> 2%   (Avg = $3,500)
Car or car expenses >> 2%   (Avg = $6,800)
College >>>>>>>>>>>>> 1%   (Avg = $9,700)
Other >>>>>>>>>>>>>> 26% (Avg $10,700)

Average projected time until goal met based on savings rate: Just over 4 years

SmartyPig ANZ Version (13 Jan 2009)

USA partner West Bank’s homepage (14 Jan 2009)

Traffic chart from Compete (14 Jan 2009)

Notes:
1. See our most recent Online Banking Report: Growing Deposits in the Digital Age, for more info on social savings, along with 16 other strategies.

2. Des Moines, Iowa-based West Bank owns 18% of SmartyPig according to its 30 June 2008 SEC filing.

3. My guess, not a number that has been disclosed.

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EFT Network Inc. Launches Remote Deposit Capture via Fax

By Jim Bruene Posted on January 13, 2009
Categories: Deposits, Checking, Savings, CDs, Remote Deposit Capture, Small Business

Remote deposit capture (RDC) via mobile phone has to be the coolest way to make paper checks disappear from your office and reappear in your account. But from a usability standpoint, it leaves something to be desired, limiting its appeal to geeks with a check to deposit every once in a while.

Businesses with several checks or more every week need something more convenient and easy to use. Proprietary scanners connecting to PC-based software apps work well, but require installation and training, not to mention $30+ per month in service fees.

Enter FAXTellerPLUS, a new solution from Hawthorn, NY-based EFT Network, that uses the common fax machine for the input mechanism. The bank runs the software on its end freeing the user to get back to their business once the fax transmits.

Today’s press release says the four banks using the system are processing “thousands of transactions per month.”

How it works:

Bank sends customers a special sleeve that holds up to 3 checks to be transmitted and includes info on the customer so deposit can be directed to the correct account.
Customer transmits the check (front and back) to the bank via standard fax machine.
Bank sends confirmation back to customer via fax or email.
Funds are deposited in customer’s account and images viewable online.

If this works as billed, it could put RDC into the hands of micro- and small-businesses as well as consumers with access to fax machines at home or work. If any readers have used or tested the system, please let me know your experience by commenting here or emailing.

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Lending Club Regains Momentum, Posts 40% Gain in P2P Loan Originations Compared to Dec. 2007

By Jim Bruene Posted on January 9, 2009
Categories: Lending Club, Loans & Credit, Market Research & Metrics, P2P Lending

If you think your 2008 was stressful, imagine having to shut down for an extended and unknown period (it turned out to be 6 months) just 10 months after launch. Then spending hundreds of thousands of dollars on SEC paperwork that your major competitor avoided (temporarily it turns out), all the while watching that same competitor take your market share while you keep your mouth shut via SEC mandate.

That was Lending Club’s year. But unlike so many horror stories of the past year, this one has a happy ending, at least so far. Not only did Lending Club reopen for business Oct. 14 at our Finovate conference (demo video here), within weeks they had already moved ahead of last year’s origination pace (note 1).

As you can see in the table below, Dec. 2008 was substantially ahead of Dec. 2007 in all measures except average loan size and approval rate, which dropped a full 2 points:

Number of applications increased by 78%
Number of approved loans increased by 43%
Dollars originated increased by 29%
Average loan size approved declined by $1,000 (9.4%)
Overall approval rate was 8.5% last month compared to just over 10% a year ago

Table: Lending Club loan origination results: Dec 2008 vs. Dec 2007

	Dec 2008	Dec 2007	Change	% Change
Number of loans originated	238	167	+ 71	43%
Dollars originated	$2.28 mil	$1.77 mil	+ $0.5 mil	29%
Number of loan applications	2,798	1,575	+ 1,223	78%
Approval rate	8.5%	10.6%	(2.1%)	(20%)
Dollar value of all applications	$24.2 mil	$14.4 mil	+ $9.8 mil	68%
Average loan size approved	$9,600	$10,600	($1,000)	(9.4%)
Average loan size declined	$8,600	$9,000	($400)	(0.4%)
Site traffic (unique visitors)	78,000	58,000	20,000	35%

Source: Loan volume from Lending Club, site traffic from Compete, calculations by Online Banking Report, 8 Jan 2009

Here’s the monthly origination chart (in US Dollars) courtesy of LendingClubStats.com who compiled the figures from data provided by Lending Club.

Source: LendingClubStats.com, 8 Jan 2009

Also, site traffic is up 35% year over year according to Compete.

Source: Compete, 9 Jan 2009

Notes:
1. The number/dollars of loans originated and applied for at Lending Club in Oct. 2008, Nov. 2008, and Dec. 2008 were all higher than the respective months in 2007.

2. For more info on the market, see our Online Banking Report on P2P Lending.

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New Peer-to-Peer Lender Pertuity Direct Nears Launch

By Jim Bruene Posted on January 8, 2009
Categories: Loans & Credit, P2P Lending, Pertuity

Just when it looked like U.S. regulators were about to kill the market for P2P lending, a new entrant is about to launch. Apparently, with the full blessing of government watchdogs.

Pertuity Direct, originally scheduled to launch at our Oct 14 Finovate conference, is about to go live with a new approach to P2P lending. In an off-the-record discussion with founder Kim Muhota and marketing director Lisa Lough yesterday, I learned about their novel approach to make the service appeal to borrowers, investors, AND regulators. It could be the model for the industry going forward.

While I’ll reserve judgement until I can actually use the service (it’s still in private testing), I’m impressed with the company’s thinking and encouraged that it appears to have successfully navigated the regulatory minefield and will make it off the ground in early 2009.

We’ll cover it in more detail at launch.

Note: For more info on the market, see our Online Banking Report on P2P Lending.

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Bank of America Launches a Blog…Finally

By Jim Bruene Posted on January 6, 2009
Categories: Bank 2.0, Bank of America, Blogs

What better way to start the new year than to blog about a blog. And it’s big news. Bank of America, through its Center for Future Banking (see note 1), launched a blog called The Future Banking Blog. The blog, quietly began after Thanksgiving (note 2), has averaged about 2 posts per week, about right for a banking blog (note 3).

The content so far has been wholly unrelated to Bank of America or its products. The blog is part academic, part strategic, bringing insights from the Center’s joint team of MIT academics and BofA business execs.

The design however, is pure Bank of America (see below). It uses the BofA color palette and includes a prominent powered by logo in the upper right. It’s also housed under a bank URL <futurebanking.bankofamerica.com>.

All in all it’s a good effort, positioning BofA as a thought leader in the upside-down world of commercial banking circa 2009.

Note:
1. The Center is seeking an Executive Director. The position was posted on Dec. 16, but given the holiday, it’s not too late to toss your name in the hat.

2. Hat tip to Colin Henderson at The Bankwatch for writing about it.

3. For more info on financial institution bloggin, see our Online Banking Report on Banking and Social Media.

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Chase Bank, Mint Top the Charts with New iPhone Apps

By Jim Bruene Posted on December 22, 2008
Categories: Apple, Chase Bank, iPhone, Mint, Mobile Banking

No one knows for sure how Apple compiles the list of its top-selling iPhone apps, but it’s related to how many are sold during the past few hours. I’ve seen speculation that the measurement period is 2 hours (see note 1).

But there is no doubt about the benefits of rising to the top. The winner receives prime exposure in the iTunes Store and on the iPhone itself (see screenshots below).

I’ve checked the Finance category rankings dozens of times since the store opened in July, and the top app had always been Bloomberg with Bank of America usually the runnerup.

But Friday, a new top seller emerged in the Free list in the Finance category (note 2), Chase Mobile while Bloomberg and BofA were each knocked down a spot to numbers 2 and 3. The Chase app was released just one week ago (12 Dec). But by Saturday morning (20 Dec), Chase had already been replaced at the top by online personal finance startup Mint, which released its iPhone app Monday (15 Dec), but it didn’t show up in the iTunes store until 1 AM Friday. Mint stayed at the top all weekend and is still number one now (10 AM Pacific, 22 Dec).

In the screenshot below and right, you can see the free publicity derived from holding the top spot. Also, note that you should put your name into the application. Bank of America, ranked number 3, neglected to include its name in the title, so it loses some branding value. Although, they would have to use BofA to fit into the space.

Chase App (link to iphone App)
The Chase app itself is attractive and is similar to Bank of America’s with a login button to the website and an ATM/branch-finder utility. As of this evening, 64 reviews have been posted with an average 3.5-star rating out of five, slightly better than the 3-star rating of Bank of America’s iPhone app with similar features.

Mint App (link to iPhone app)
As expected from a company that is carefully using design to help distinguish it from the pack, Mint’s new app is great looking. Across all aggregated accounts, the mobile app shows account balances, transactions, and progress towards budget goals. A nifty alerts icon on the bottom provides a convenient way for users to keep tabs on important info on the go.

Another difference from most banking apps: Mint lets users choose whether they want password protection enabled after their initial login. If you choose to log out, then the app erases all data in memory, and you must log back in next time. If you choose not to log out, then your data remains visible until the next visit with no login required (note 4). This is a great convenience, but something that may not be allowed at regulated financial institutions.

Some users have reported trouble with the app on older phones. On my first-generation iPhone running version 2.1 software, the Mint app wouldn’t download. But once I upgraded the iPhone software to version 2.2, it downloaded flawlessly and all functions worked perfectly. In Mint’s forum, some users were reporting problems with the Budget feature, but it seems to work fine for me (forum thread) (note 3).

Top Apps in the finance category of iTunes’ App Store
(7 PM Pacific, 19 Dec 2008)

Top free finance apps list displayed on iPhone:
at 7 PM Pacific, Fri. Dec. 19 at 2 PM Pacific, Sat. Dec. 20

Chase Mobile iPhone app Mint iPhone app main screen
main screen (19 Dec 2009) (19 Dec 2009)

Notes:
1. That 2-hour window could be about right. When I made this screenshot, the new Mint app was at number 10; two hours later (9 PM) it had risen to number 5 (see screenshot above). By 9 AM Saturday morning (20 Dec) it had risen to number 1.

2. The App Store divides the top apps into two categories, free and paid. The top 20 free apps are listed on the right side and the top 20 paid apps are listed on the left. The apps in the middle are listed by newest first.

3. These operating system incompatibilities, a real problem in pre-1995 online banking services, had largely been left behind when banks embraced the Web in the mid-1990s. Unfortunately, mobile banking will add to your tech-support costs.

4. Mint also reminds users that they can choose to lock their entire iPhone for extra security.

5. For more info on the market, see our Online Banking Report on Mobile Banking.

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