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USAA Offers Nationwide Remote Deposit Capture for Consumers

By Jim Bruene Posted on December 7, 2006
Categories: Deposits, Checking, Savings, CDs, Remote Deposit Capture, USAA

In a press release yesterday, USAA, which serves many of its 5.6 million members remotely, announced the availability of its Deposit@home remote deposit capture service. It's the first major remote deposit capture service geared towards consumers. There are no fees for the service.

Previous services have been targeted to businesses who could justify the $300 to $700+ cost of a dedicated on-location paper-check scanner (see prior coverage here). USAA's service works with any 200 dpi or better scanner hooked to a Windows 2000/XP computer, so households with a dedicated scanner or multi-function printer will not be required to add hardware.

Deposit@home has been rolling out to selected customers since mid-November. To reduce risk, the service is only available to credit- and insurance-qualified checking account customers.

It's being positioned as a replacement to the UPS/NetBank QuickPost service that was abruptly discontinued by NetBank in a cost-cutting move (previous post here). QuickPost allowed USAA customers to overnight deposits free-of-charge from any UPS Store. There is no word on when or if it will be available to all USAA checking account customers.

Because of its limited availability, it has not been featured on USAA's website. Invitations were sent by email and the option was added to the menu within online banking. However, the feature was used in an online promotion for the Lackland Airfest 2006 a month ago (see mention in upper-left here).

Here's a screenshot posted on the USAA thread at FatWallet:

Analysis
Assuming the service works as promised on in-home scanners, the ability to submit deposits remotely should help financial institutions compete for checking accounts outside their geographic footprint.

Winners: Direct banks, credit unions, and smaller banks with limited branch networks; also, remote deposit technology providers and printer/scanner manufacturers

Losers: Any financial institution that doesn't offer remote deposit options; branches

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Vehicle Auctions Hit the Homepage at Houston Federal Credit Union (HFCU)

By Jim Bruene Posted on December 6, 2006
Categories: Lead Generation, Loans & Credit, Website Usability & Design

Many financial institutions sell or auction repossessed vehicles to the public. However, not many use this by-product of installment lending as a prospecting tool on their homepage.

We came across this novel approach at Houston Federal Credit Union <houstonfcu.org> while putting together a presentation titled "Extreme Website Makeovers" for an upcoming American Bankers Associate conference. The first place we looked for inspiration was the client list of Trabian, a talented new website designer concentrating on the credit union market (grab a feed to their outstanding blog, OpenSourceCU here).

Trabian's client, HFCU, includes a link to its vehicle auctions on the right-side of its homepage (see screenshot below). Clicking on the box takes users to the main auction page where any registered user may bid on the vehicle (in this case, just a single motorcycle was up for auction).

Analysis
Everyone loves a good deal, and unlike retailers who can drop a loss-leader on their homepage to generate excitement, financial institutions have far fewer options. Vehicle auctions provide an interesting way to encourage members to check back periodically to see if they could get a smoking hot deal on a used sedan, truck, or bass boat.

It's also a good prospecting tool. Nonmembers are allowed to register on the site and bid. This provides the credit union an immediate opportunity to make a sales pitch such as the "Wish your auto loan was at HFCU instead?" in the center of the page.

The email address supplied by the bidder also enables the CU to market to the nonmember in future emails. Finally, anyone who buys the auctioned vehicle is a great candidate for an HFCU loan, which are positioned in the upper-right of the auction page (see screenshot below).

Making it even better
We love the idea, and it works well even in its relatively simple form. It would be even better with a few additions:

It would drive even more traffic with an email and RSS feed option for receiving information on new auction items and for monitoring bids.
The credit union would generate more interest by including a variety of vehicles (even if they bought a few at auction to seed the site). Today's sole entry was a 2005 Suzuki motorcycle with a buy-it-now price of $6300.
The auction format and tools are relatively crude by today's standards. For example, it wasn't obvious who the other bidders were, how long it had been up for auction, or what the next bid needed to be. There are numerous auction services that could provide a more eBay-like experience.
It would be helpful to integrate the auction more closely with the loan center so users could easily calculate monthly payments, insurance costs, etc.

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Top 25 Web 2.0 Financial Websites

By Jim Bruene Posted on December 5, 2006
Categories: Bank 2.0, Investment Products, Personal Financial Management, Prosper, Zopa

Since its September launch, Your Credit Advisor <yourcreditadvisor.com> has posted several trendy lists to attract traffic to its credit card application portal. The latest entry, "Top 25 Web 2.0 Apps for Money, Finance, and Investment."

The article includes helpful summaries of each site's capabilities. It's a good jumping-off point to do a little outside-the-box thinking about Web-based finance (see also, Online Banking Report #135/136, "How to Web-2.0 your Online Banking").

This list includes:

Two loan sites: Zopa and Prosper (see previous coverage here)
Six personal finances sites: Three we've covered: Dimewise, foonance, ioweyou (see our previous coverage here) and three new entrants: NetworthIQ, MedBillManager and Wesabe, a fascinating social money site we'll cover later this week
Five real estate sites: Homethinking, iiProperty, Rentometer (owned by iiProperty), Trulia, and Zillow (see our Zillow coverage here)
Two miscellaneous sites: PayScale, cFares
Ten investment sites: BullPoo, Motley Fool's CAPS, DigStock, FeelingBullish, GStock, MoneyTwins (foreign currency), SaneBull, StockTickr, WikiFinancial

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Yet Another Direct Bank: WT Direct from Wilmington Trust

By Jim Bruene Posted on December 5, 2006
Categories: Deposits, Checking, Savings, CDs, Direct Banking

It may be premature to give the direct banking trend a cynical acronym such as YADB, meaning "yet another direct bank" (see Note 1). However, it's getting more difficult to distinguish one 5% high-yield offer from the 27 others (see Note 2).

The latest top bidder on Google (see End Notes) is WT Direct <wtdirect.com>, a new direct banking brand from Wilmington Trust. Its sole product is a 5.26% APY savings account. To encourage trial, the bank pays the advertised rate on any balance for the first 60 days. On day 61, the rate drops 466 basis points to 0.60% unless you've stored $10,000 or more in the account. The bank clearly discloses both rates.

The homepage is direct and to-the-point (see Note 3). While not as flashy as ING Direct or iGObanking, it communicates the benefits in an efficient manner. The landing page from its top-ranked Google ad (see Note 4) is better, with a chart showing how it beats ING Direct.

The application is well conceived (see below), with few of the problems identified in our earlier critique of iGObanking's online app (see previous post here). The one improvement we'd recommend: Divide the personal info section into two steps, first getting the "public" info (name, address, email address), then asking for the private stuff (SSN, driver's license, etc.).

End Notes

1. Modeled after YASN, a term used in tech circles for "yet another social networking site."

2. In BankDeals' weekly high-rate summary, 27 banks were identified as offering 5% or more APY on online savings accounts (see post here).

3. WT Direct homepage screenshot (click to enlarge)

4. WT Direct search ad on Google (4 Dec. 2006 search on "savings account gifts" from Seattle P.I. at 3 PM PST)

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Holiday Gift Ideas From My Bank?

By Jim Bruene Posted on December 4, 2006
Categories: Credit Reports & ID Theft Protection, Credit/Debit Cards, Equifax, Fee Income, ING Direct, Investment Products, National City, Stored Value Cards

Who'd have guessed banks would become a popular source of holiday gifts, other than good old-fashioned greenbacks of course?

Now that niche audiences can be targeted with online promotions during the holidays, many financial institutions are marketing financial products packaged as gifts. Prepaid Visa/MasterCards are the hottest item, but there's also potential in other areas.

Gift cards
The second most popular gift item this year, after apparel, is expected to be prepaid cash cards. While the majority of the $20+ billion purchased will be direct from retailers, hundreds of banks and credit unions, such as Boeing Employees Credit Union (BECU) have joined the fray (see email below). If marketed right, financial institutions could gain a significant share of total sales. See our previous post here about integrating gift cards into online banking for more information.

Credit reports
Equifax is taking advantage of the giving season to market credit reports and/or FICO score gift certificates. The cost is $20 for a three-bureau credit report, $15 for the FICO score and explanation, or $30 for both (see email below). An even better gift would be a year of credit monitoring.

Investment accounts
For years, ShareBuilder has marketed "the gift of stock" during the holidays. This year, many of its partners, such as National City Bank, are offering a $50 gift card as a bonus for new accounts (see screenshot below). That way grandma and grandpa can give junior something that's good for him, an investment account for the future AND something he'll actually like, $50 to spend at the mall.

Piggy bank 2.0
For the younger set, ING Direct has for a year been selling The Savings Machine, a toy bank/calculator/ATM machine. And judging from the note on its website,* it's proving to be a popular Deal of the Month with a lower $17.95 price tag which includes free shipping (see inset). Several years ago, ING Direct reported nearly a million dollars in sales from its online merchandise store <shop.ingdirect.com>, an inexpensive way to get its name on the street.

*Note by the "Savings Machine" product page today: All orders placed from 4 Dec to 11 Dec will be shipped out the week of 11 Dec due to the large amount of backorders.

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Intuit’s Billion-Dollar Online Banking Play

By Jim Bruene Posted on December 2, 2006
Categories: Intuit, Personal Financial Management, Small Business

Intuit merger graphic on its fi.intuit.com website Intuit's bold move to purchase online banking pioneer Digital Insight came as a surprise, both to analysts and shareholders. Reactions were mixed, with shares drifting downward after the 8 AM EST announcement Thursday, ending the week off 3% (see chart here; Intuit presentation on the acquisition here).

Although the software developer has made a few forays into selling bank technology, including owning a bill payment processor in the mid-90s, it has generally stayed focused on packaged software for consumers and small businesses.

Just two weeks ago, I met with Intuit execs at the coming out party for its financial institution services unit at the China Grill down the hall from BAI's Retail Delivery Conference in Las Vegas. They were excited about several new services built on the Teknowledge unit purchased last year (see previous post here).

Analysis
Only time will tell whether the acquisition makes sense for Intuit. It's a savvy company that understands the personal finance space as well as anyone, so I tend to believe they know what they are doing.

Regardless of what it does for Intuit's share price, the merger is bound to shake up the online banking product offerings at banks and credit unions, especially for smaller businesses, the Quicken and QuickBooks crowd.

In September, we published a report predicting significant growth in personal finance functionality in online banking services (see Note 1). This merger should further accelerate that growth. As Intuit integrates Quicken, TurboTax, and QuickBooks features into the Digital Insight line, other platform providers will feel pressured to keep up.

This is good news for U.S. consumers who've generally NOT been able to enjoy the benefits of tightly integrated personal finance and online banking.

End Notes:

(1) See Online Banking Report #130/131, Personal Finance Features for Online Banking: Why MySpendingReport Trumps Free Bill Pay

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The iGoBanking/CashEdge New Account Application Needs Improvement

By Jim Bruene Posted on December 1, 2006
Categories: CashEdge, Deposits, Checking, Savings, CDs, Forms & Loan Applications

As mentioned earlier this week (previous post here), Flushing Financial's new Internet offering iGoBanking features a great price, modern homepage design, visible rates, and an overall good user experience.

At least until prospective customers decide to buy. Once the user clicks the grammatically challenged link, "iGo Open a New Account," things go downhill quickly. The application (see screenshots right and below), hosted by CashEdge (see related post here), fails to maintain the user experience from the bank's homepage.

In fact, the application is a circa 1999 all-text affair that leaves you wondering if the graphic designers at CashEdge are on strike. Here are a few of the problems:

No Customer Service or Help on the application
No telephone number
No way back to the homepage, the bank's logo is NOT clickable
Overall lack of design and graphics, even the logo in the top looks like a low-resolution version
The application steps are hardly visible because the white font is too thin to be easily read through the blue background
Social security number required on first page
Application is massive in length for a simple savings account (see screenshots below); we realize the need for regulatory compliance and security, but it should be either shortened or broken into smaller steps to maintain

For more on best practices in application design, refer to Online Banking Report (#104).

Screenshot: iGoBanking application page 2 (click to enlarge)

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E*Trade Bank and Flushing’s iGoBanking Join the 5% Online Savings Account Club

By Jim Bruene Posted on November 29, 2006
Categories: Deposits, Checking, Savings, CDs, Direct Banking, E-Loan, E*Trade, Search Engine Marketing

<Updated 12/1/06 with more details>

Two new entrants in the so-called high-yield savings market launched this week:

E*Trade Bank <etradebank.com>: Its new 5.05% Complete Savings Account was advertised in the Wall Street Journal today and took next-to-top honors in Google search results for "best savings accounts" (see end note 1, screenshot below).
iGoBanking <igobanking.com>: The new online brand from Flushing Financial launched Monday with a 5.3% rate on an online savings account (see end note 2, screenshot below).

iGoBanking (click to enlarge)

As previously reported, Flushing Financial launched its entry into the online savings market. The 5.3% APY no-minimum account ranks as the fourth highest in the nation according to the Bank Deals blog (see list here). The rate leader continues to be E-Loan's at 5.5% (see our coverage here).

However, iGo can claim the highest no-minimum rate in the nation since E-Loan and the others require at least $5,000 to qualify for the higher rate.

The bank will focus on deposits, CDs, and savings in 2007 and may expand to home equity and mortgage lending in the future.

Analysis
The website is attractive and relatively well designed. The online application is hosted by CashEdge (see related post here). Unfortunately, the outsourced application fails to maintain the look and feel of the main website and may cause a few applicants to second guess their decision to sign up (click here for a more thorough analysis of its application design).

E*Trade Bank (click to enlarge)

E*Trade's Complete Savings account builds on the direct bank's lineup of award-winning products (see previous coverage here). The bank flat-out understands the market and the medium.

The landing page for the new savings offering is brilliantly laid out with Google-like simplicity using just 25 words of copy (other than the table and the below-the-fold fine print). Notice how they show specific competitive prices, including high-yield market leader ING Direct. But what most consumers will remember from the chart is the "6X national average" rate.

Finally, the "Open an Account in Minutes" and "Free, one-click transfers to and from any institution" address user concerns on both those issues. And the small padlock with E*Trade's protection guarantee helps users understand security issues.

End notes:

Search conducted at noon PST, Nov. 29 from Seattle IP address (see screenshot below).
Source: American Banker, 29 Nov. 2006 (article here)

Google search results for "best savings account"

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CashEdge Claims 25% Share of 2006 Online Account Openings

By Jim Bruene Posted on November 28, 2006
Categories: BAI Retail Delivery, CashEdge, Forms & Loan Applications

I had a good chat with CashEdge <cashedge.com> VP Neil Platt at BAI's Retail Delivery last week. The company is busy working on a much-needed channel integration initiative so that account applications begun online can be completed with a phone call or even a branch visit, with no need to start all over from scratch.

The company hopes it can capture half of what it estimates is 70% of completed online applications that go unfunded
(see chart inset).
If that's true, the payback for the solution, at least at larger financial institutions, will likely be measured in months, if not weeks.

Other projects in the works:

Cross-selling other bank products during the new account-opening process
Facilitating other types of applications, such as loans
Improving risk management by tapping additional data sources outside the credit bureau

CashEdge is a great example of a specialist that carves out a profitable niche in a relatively narrow, but risky area of online operations, new account funding. Thanks to big clients such as Citibank, the company is on track to facilitate one million online account openings this year, about a quarter of the estimated 3.5 to 4 million new checking and savings accounts opened this year online (Note: CashEdge estimates).

The company ranked number 101 in INC Magazine's list of the 500 fastest growing private companies. According to the published figures, the 177-person company grew from just over $1 million in revenues in 2002, to approximately $10 million in 2005.

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Boeing Employees Credit Union Email: "BECU Gift Cards Make the Perfect Holiday Gift"

By Jim Bruene Posted on November 28, 2006
Categories: Credit/Debit Cards, Email Marketing, Email Samples

Boeing Employees Credit Union <becu.org> starts the holiday shopping season off with an email pitch for its prepaid MasterCard gift card. At $2.50 each, they are a bit less expensive than one hanging in Safeway for $4.95. However, the CU neglected to disclose dormant account fees, a significant issue with consumer advocates.

It's too bad you can't order the cards online. Ideally, members should be able to order with a single click (or two) right from within the online banking function. Maybe next year.

Screenshot (click to enlarge)

Classification

Type: Marketing email for prepaid debit
Product: Prepaid debit cash card (MasterCard)
Offer: None (cost is $2.50 plus the cash value)
Customer Type: Sent to nonmembers
Personalization: None
Links: None
Call to action: Toll-free phone, branch

Header

Date received: Tues 11/28/2006 6:08 AM
From: BECU [reply27974@enews.becu.org]
To: Jim Bruene
Subject: BECU Gift Cards Make the Perfect Holiday Gift

Comments

Even if gift cards cannot be ordered online, the credit union should include a link or URL for more information. Since many email recipients will automatically go to BECU's website to purchase, it would be helpful to specifically mention the cards cannot be ordered online, and why.
The opt-out and CAN-SPAM disclosures could be better designed.
Add disclosures for any monthly fees that kick in if the value is not used by a certain date.

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Wells Fargo to Redesign its Homepage

By Jim Bruene Posted on November 27, 2006
Categories: Website Usability & Design, Wells Fargo

In our opinion, the Wells Fargo homepage has been the gold standard for the past three years, ever since the launch of its tabbed navigation in June 2003. It was one of four large-bank homepages earning an A in our Report on Financial Homepage Design in October 2003 (see Online Banking Report, 101/102). The navigation, copywriting, and usability are still top-of-the-line, but the look and feel is a bit dated, especially the banners running along the bottom.

According to a small-text warning at the top of the page, the site is being refined, and users "may see a different homepage for the next few months" (see screenshot below).

Analysis
The bank's homepage design has been essentially unchanged for more than three years, so it's about time for a remodel.

What we don't quite understand is the reasoning behind the cryptic message at the top of the page. With spoofing a continual problem, the bank may not want users to be concerned if they see changes. However, this message probably does more harm than good.

The main problem is lack of information. The bank doesn't say what type of changes to expect, or even when they might happen. Most importantly, they fail to communicate why they plan to dribble out incremental changes instead of launching a redesigned site all at once. (And a quick search on "home page redesign found nothing at the bank's site.)

There may be very good technical and/or marketing reasons for the iterative process, but they should be explained. At minimum there should be a link to an FAQ page. As it stands, users can't be sure if an odd-looking Wells Fargo is a spoof or a new design.

Don't leave users hanging! It creates only more uncertainty, not to mention additional emails and calls to customer service.

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ING Direct to Launch Online Checking Account in February

By Jim Bruene Posted on November 27, 2006
Categories: Advertising & Promotion, Deposits, Checking, Savings, CDs, Direct Banking, ING Direct, Strategies

As previously reported here, direct-banking giant ING Direct (U.S.) <ingdirect.com> will soon be in the checking account business with the Feb. 1 launch of Electric Orange.
(No word on whether the German band of the same name will be part of the launch event.)

In an interview published yesterday in Delaware's The News Journal, CEO Arkadi Kuhlmann revealed important details about the effort:

It would be made available to about 10% of the bank's 4.4 million customers in December
The nationwide launch is scheduled for Feb. 1
ING Direct is planning to add 500 workers at Wilmington's headquarters to support the product, an expansion of more than 50% from its current headcount of 900
The account will NOT have paper checks, but it will allow customers to print one from their home computer if necessary
The interest rate will be 3%, about a third less than its savings rate of 4.4%
Surcharge-free ATM access will be provided through the Allpoint network of 32,000 machines

Product postioning
While the account sounds relatively standard for an online-only checking account, the ability to print a check from home is an interesting feature we haven't seen before. It sounds like ING Direct will be marketing ease-of-use benefits, most likely centered on the bill payment function.

The catchy name combined with ING Direct's marketing flair (see picture right from its Chicago cash-cow promotion) should make for an interesting product launch. We'll be paying close attention here and testing the account as soon as possible.

Analysis
There is little reason for most consumers to choose a branchless bank for their main checking account when they can get free checking PLUS branch services at their local financial institution. ING Direct has long understood this and has not squandered resources on a limited-appeal product.

However, with more than 4 million customers, they have a large enough base to make a profit on a checking account, even a (relatively) lightly used one.

Due to the bank's ease of use and well regarded brand, it should be able to convince a portion of its base to use Electric Orange checking as an auxiliary account, perhaps as the household bill-pay account.

If the bank moves 5% of its $47 billion in savings deposits into the checking account, it would save $3.5 million annually in interest expense. Add another $3 billion in net new deposits at a 3% spread and Electric Orange pulls in $10 million per year, enough to cover expenses anyway.

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