Prosper’s Year-End Loan Numbers

By Jim Bruene Posted on
Categories: Uncategorized

Prosper, the first, and so far only, person-to-person loan marketplace in the United States, ended the year with 140,000 members and $27 million in loans booked (see screenshot below).

It's a good start for a company yet to see its first birthday and is slightly above our projections made last March (see Online Banking Report #127). However, the company will have to do something to boost revenues (see note below) if it hopes to see its third birthday. We expect to see a broadening of its products and services in 2007 (see previous coverage here).

Prosper homepage with year-end numbers CLICK TO ENLARGE

Note:
Prosper's revenues in 2006 are estimated to be approximately $300,000, primarily from the 1% loan-origination fee assessed to borrowers.

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Email: Bank of America’s "Ring in the New Year" Credit Card Balance

By Jim Bruene Posted on
Categories: Bank of America, Credit/Debit Cards, Email Marketing, Email Samples

Here's a timely email from Bank of America, inviting its credit card customers to start the year off with a 3.99% balance-transfer offer. But the savings won't last long, since the rate resets after August 2007.

Here are the specs:

  • Subject: Use your Bank of America® credit card today.
  • From: Bank of America [BankofAmerica@loyaltyemail.bankofamerica.com]
  • To: jim@netbanker.com
  • Product type: Credit card balance transfer
  • Offer: 3.99% through August 2007 (cash advance fee NOT waived)
  • Customer type: Mailed to current credit card customers
  • Personalization: Full name and last 4 digits of account number

Screenshots:

Email body


Bank of America email with 3.99% credit card balance transfer CLICK TO ENLARGE

Landing page

Bank of America landing page from credit card email CLICK TO ENLARGE

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Holiday Bank Marketing Continued

By Jim Bruene Posted on
Categories: Advertising & Promotion, Bank of America, Citibank, PNC Bank

As mentioned last week (here), U.S. banks are starting to get more creative with their websites, with 12 of the 30 largest (note 1) injecting a bit of holiday spirit into their websites.

This year, three of the top-30 banks had major holiday themes running on their homepages; in 2004, none did. And today we viewed another nine with minor holiday sprinkles, making 12 in total. Two years ago, four banks had minor holiday-themed promotions.

We expected to see more banks marketing gift cards, one of the hottest holiday gifts, especially during the last few days before Christmas. Only four banks mentioned gift cards on their homepages on Dec. 24 (note 2):

  • National City
  • BB&T
  • North Fork Bank
  • Commerce Bank

Here is a rundown of those with major holiday themes:

  1. Citibank: Citi had the best overall holiday theme as  it continued pushing its 5% e-Savings Account, with a clever 5% "ornament" hung next to traditional Christmas decorations (see screenshot below).

    Citibank holiday homepage CLICK TO ENLARGE

  2. PNC Bank: Runner-up was PNC with its unique brand of holiday marketing, a tongue-in-cheek look at the cost of the items listed in the popular Christmas song, Twelve Days of Christmas. It's a holiday tradition at PNC which has been tracking the holiday index for 22 years (see screenshot below).

    PNC Bank holiday homepage CLICK TO ENLARGE

  3. Bank of America: The largest online bank used a holiday theme, and $100 off a Dell PC, to encourage users to join the other 20 million BofA customers using its online banking. Customers hitting the bank's homepage were greeted with an animated banner displaying a wrapped package, which after two seconds changed to the Dell deal (see before and after screenshots below).

    Showing before and after package animation:

    Bank of America holiday homepage before CLICK TO ENLARGE

Bank of America holiday homepage after CLICK TO ENLARGE

Other top-30 banks with holiday-oriented images on their homepages:

  • Chase Bank: snow globe with 0% credit card offer
  • Wells Fargo: packages
  • Washington Mutual: snowball with 30-second credit card application
  • Citizens Bank: packages with a debit card rewards promo
  • National City: snowflakes with gift card promo
  • BB&T: packages with a gift card promo
  • Countrywide Bank: snow and packages with a loan promo
  • North Fork Bank: Radio City promo with $15 off coupon and gift cards
  • Commerce Bank: packages with gift card promo

Notes:

  1. According to Online Banking Report's list of the 150 largest U.S. financial institutions as of 31 March 2006 (link here).
  2. Searches conducted during late morning (EST) on Dec. 24, 2006, from a southwest Florida IP address. Although gift cards were not mentioned on US Bank's homepage on Dec. 24, we had seen them advertised on previous visits, although not necessarily on ithe homepage.

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BancorpSouth Mobile Banking Trial

By Jim Bruene Posted on
Categories: Cingular, Firethorn, Mobile Banking

link to BancorpSouth website While doing a little end-of-year cleaning, I came across these screenshots from November. They are from Google's cache of BancorpSouth's <bancorpsouth.com> website on Oct. 22, 2006. The pages are no longer available online.

They detail the bank's efforts to recruit 400 volunteers to test mobile banking from their Cingular cellphones. This is the program engineered by Firethorn Mobile (see previous post here.)

The first page below explains the trial, and the second page is the application required to participate. To be eligible, customers had to meet the following requirements:

  • Be BancorpSouth online banking customers
  • Be current Cingular Wireless customers
  • Use a Motorola V-series or SLVR phone
  • Have Internet access from this wireless phone

Participants who completed all three surveys doing the 4- to 6-week trial were to receive a $100 Visa gift card.

See the screenshots below for more details (click to enlarge).

Main BancorpSouth explanation of the mobile banking trial (click to enlarge)

Details on Bancorpsouth's mobile banking trial CLICK TO ENLARGE

Application to participate (click to enlarge)

Bancorpsouth application for the mobile banking trial CLICK TO ENLARGE

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More Supply than Demand at Zopa

By Jim Bruene Posted on
Categories: Loans & Credit, Prosper, Zopa

link to Zopa homepage In a blog post today, person-to-person lender Zopa told its U.K. lenders that, due to a seasonal "lack of creditworthy borrowers," it would take a bit longer to lend out their money this month. However, the company predicted a seasonal upturn in January as more good borrowers looked for funds. The company reminded lenders that they still earn 4.25% on idle funds held by Zopa.

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Who Cares about the Bank Branch “Experience”?

By Jim Bruene Posted on
Categories: BAI Retail Delivery, Channel Integration, Umpqua Bank

Editor's Note: I've been sitting on this post for a few weeks because I don't want to sound like I'm on a virtual soapbox. But since so many influential banking execs were in attendance, I feel it's important to provide an alternative view. So…

<Climbing on soapbox> Am I the only one who thought the "branch experience" keynote at November's BAI Retail Delivery Conference was about 5 to 10 years behind the times?

Sure, I like the Umpqua Bank story as much as the next person, probably more so. I went to CEO Ray Davis's talk in a back room at Retail Delivery about ten years ago and was blown away by his retail innovations. It's in the top four or five most memorable presentations I've ever heard, and I'm glad the strategy has worked so well for them.

And I'm all for remodeling branches to keep up with times, but the Microsoft-produced video he showed, which was shot in Umpqua's Pearl District branch in Portland, was so far-fetched it bordered on ludicrous. (Note: This was Microsoft's "vision" of banking's future, not the bank's. Umpqua merely provided the futuristic location. Here's Microsoft's press release.)

The video – intended to demonstrate how in the future a fully networked high-tech, high-touch branch could serve customers better – was visually appealing, and, if there was no Internet, it might even be on the mark. But why would the wired diva in the video pay $20 to take a cab to a branch to complete her mortgage application? Surely she would have logged in, perhaps via video conference if needed, and handled it from her home or office, saving not only the $40, but also the half-hour trip. 

Umpqua succeeded because it's a great community bank, not because it had its own brand of coffee and Starbucks-like interiors. Those gimmicks grabbed attention and brought in new customers, but the bank thrived because it created an environment where its front-line employees were able to pay attention to customers and serve them better than its mega-bank competitors.

But today it would be a waste of resources to embark on a strategy similar to Umpqua's. By the time it would become fully implemented, 2009/2010 at the earliest, the world will have moved still further from the old apply-for-your-mortgage-in-our-lovely-branch model.

What's far more important going forward is the "out-of-branch experience" – online, phone, and mobile-phone hybrids. You will have ten, twenty, even 100 times more interactions with your customers outside the branch than inside.

Yes, those branch interactions are still vitally important, especially if they involve a new account or serious service issue. But branches will never again be the driver of customer satisfaction they once were. Bank on it. <Stepping down now>

For more information:

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First Direct Bank’s Holiday Pop-up Marketing

By Jim Bruene Posted on
Categories: Advertising & Promotion, Citibank, Deposits, Checking, Savings, CDs, First Direct, Website Usability & Design

Citibank_holiday_homepage_esavings_1I am a sucker for holiday graphics on websites. It doesn't have to be dramatic, a few snowflakes or candy canes in the background is fine. For example, Citibank's e-Savings banner on its homepage today (see inset, click to enlarge). Just like a holiday wreath on the door of the branch, it shows your customers and employees that you have some holiday spirit.

Unlike two years ago (see prior post here), this year many banks and credit unions are running holiday promotions for gift cards and other products (see rundown here) and/or have dropped holiday sprinkles into their websites. The most dramatic is the popup from U.K.'s First Direct <firstdirect.com>. This is over-the-top, but it brings a grin, not a bad thing during the end-of-year rush.

First Direct homepage with popup showing (click to enlarge)

First Direct home page with holiday popup CLICK TO ENLARGE

Close-up of popup after choosing "let it snow" option
The loud holiday music that accompanies the snow globe can be turned off with the button in the lower right. Selecting "all snowed out" or "bah humbug!" from the first screen displays a brief "seasons greeting" message before automatically closing the popup.

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Citibank Teams with mFoundry for True Mobile Banking

By Jim Bruene Posted on
Categories: Citibank, mFoundry, Mobile Banking

Link to mFoundry I spoke with mFoundry CEO/Founder Drew Sievers last week. If you want to get energized over the possibilities of mobile commerce, this is the guy to talk to.

Although mFoundry already has more than 100,000 users of its mobile application, we were most interested in its recently announced deal with Citibank. The bank is set to launch a full mobile banking application in Q1 2007 that encompasses both SMS-based banking and what we call True Mobile Banking (TMB), a banking application running on the mobile device (see definitions here).

While mFoundry's CEO cannot confirm which functions Citibank will use, the vendor's mBanking platform includes the following: 

  • account inquiry
  • transaction summary
  • funds transfer
  • bill payment
  • ATM/branch locator
  • password generator

The platform also supports advertising and service functions (download spec sheet here).

How it Works
The mFoundry approach uses both text messaging for alerts and simple inquires and a complete downloaded application that mimics Web-based online banking (i.e., True Mobile Banking). With True Mobile Banking, the user's phone carries a unique identifier that is registered with the bank (factor one); and before receiving data or initiating a transaction the user must log in with a password or PIN (factor two).

When the user logs in, current balance and recent transactions are automatically downloaded and displayed, satisfying most user needs within seconds. The application times-out after a certain length of time and more importantly, no data is retained on the device itself, so security is nearly perfect. If the phone is lost or stolen a call to the bank will deactivate the service, although as long as the password or PIN has not been revealed, there is little security risk. 

Analysis
As mentioned in our post three weeks ago (here), it's taken nearly a decade for me to jump on the mobile banking bandwagon. Earlier efforts were too hard to use and had limited appeal, primarily to a small group of PDA-toting geeks.

However, now that even basic mobile phones can use the service (see note 1) and top brands such as Citibank, Cingular, and MasterCard are poised to pump millions into educating the market, mobile finance should take off rapidly (see note 2). 

End Notes:

  1. mFoundry says its service works across more than 200 different phones at the five major carriers, AT&T, Cingular, Sprint, T-Mobile, and Verizon. Sure enough, even our relatively inexpensive 2-year-old Sanyo is on their list of supported phones.
  2. In order to download the mobile application, users select their carrier and phone type from sliding menus (see screenshot below, from mFoundry's My Mobile News).

Downloading the mobile application at mFoundry

2. The next issue of our Online Banking Report will contain a mobile banking forecast.

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billQ Uses Account-Specific RSS Feeds for Bill Payment notices

By Jim Bruene Posted on
Categories: Best of the Web, Bill payment, billQ, Personal Financial Management, RSS

For the past few months, I've been more or less obsessed with RSS feeds (see our latest full report on the subject here). All of a sudden every information-delivery problem seems solvable with a feed.

And there is enormous potential for feeds in everyday banking which primarily involves simple information queries: What's my balance? Did my check clear? Was my mortgage paid? 

The first account-specific financial feed
I've been on the lookout for the first financial institution with account-specific feeds. That search continues, but a non-bank has been using feeds for bill-payment-status updates: previous OBR Best of the Web winner billQ <mybillq.com> (see previous coverage here).

The company has an "RSS Feed" option on its list of automated bill-payment-tracking mechanisms which also include an iCalendar subscription, an Apple OS X widget, or a toolbar applet (see screenshot below for billQ subscription options).

billQ bill subscription options CLICK TO ENLARGE

When using the RSS feed option, bills automatically appear in the user's newsreader software. Below is an example using the Newsgator Web-based reader:

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Mobile Banking & Payments Terminology

By Jim Bruene Posted on
Categories: Epayments, Mobile Banking

In 2007, we'll be spending more time researching mobile banking, payments, and finance applications. So that we all understand each other, here are some of the key terms that will be used:

General terms/acronyms:

SMS >>> Short message service (also known as text messages, texts, SMSes, txts): A service available on most newer mobile devices that permits the sending and receiving of text-only messages; also can be sent to and from personal computers or even landline phones

MMS >>> Multimedia messaging service: An evolution from SMS, allowing messages to contain multimedia objects such as images, audio, video, and rich text 

CSC >>> Common short codes: Special short telephone numbers of just four to six digits used typically by businesses to make it easier to send text messages their way (the Mobile Marketing Association has a helpful primer here)

WAP >>> Wireless Application Protocol: An open, international standard for applications that use wireless communication; primarily used to enable Web access from mobile devices

Mobile IM >> Mobile instant messaging: Similar to desktop instant messaging, but slimmed down to fit on a much smaller mobile device screen

Banking & finance terms:

SMS or text alerts: Simple one-way messages from the financial institution or payments provider to the mobile user with account-specific information

Mobile payments: Payments initiated through a mobile device, could be via SMS, WAP, or a device-specific application

Mobile banking: Online banking functions performed via a handheld mobile device (PDA, cellphone, etc.); the general term that encompasses WAP Banking, SMS Banking, or True Mobile Banking (see below)

WAP banking: Accessing secure online banking functions through a mobile device's browser

SMS or text banking: Two-way messaging; for example, using text messaging to query the server for account-specific information and have it returned to the mobile device, or responding to a bank-initiated text message to initiate a transaction

True mobile banking: Our term for banking functions delivered through a downloaded application run locally on the mobile device

Sources: Online Banking Report, Mobile Marketing Association, Wikipedia

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Wells Fargo Launches Two More Blogs

By Jim Bruene Posted on
Categories: Bank 2.0, Blogs, Wells Fargo

Evidently, Wells Fargo has found blogging religion. Not only is it the only major U.S. financial institution with a blog, but it now has not one, not two, but FOUR public blogs.

Here's the lineup:

Previously reported:

  • Guided by History: The bank's first blog, a community service resource that began in March.
  • The Student LoanDown: An excellent blog launched in September to support the bank's student loan business. We've reported on it here and here.

Launched in August, but not previously reported:

  • Commercial Electronic Office (CEO) Blog: This B2B blog supports the bank's Commercial Electronic Office business portal. It launched August 10, but is not listed on the bank's blog index page <blog.wellsfargo.com> or on the bank's main website. Our initial reaction: The CEO Blog is an all-business affair with 39 posts in four months, a good rate for a business blog (see screenshot below). We'll take a closer look in a future post.

Wells Fargo CEO blog CLICK TO ENLARGE

Newcomer:

  • Stagecoach Island Community: Another good-looking blog (see screenshot below) launched Nov. 27 supporting the bank's Second Life-inspired virtual world Stagecoach Island (see our coverage here).

Wells Fargo Stagecoach Island blog

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