New Personal Finance Site: Pertuity Direct

By Jim Bruene Posted on
Categories: Personal Financial Management, Pertuity

Does it seem like every NetBanker blog post lately is a plug for our FINOVATE conference (oops…plug #1)? Hmm … maybe we are a little stuck there.

OK, here's an online personal finance startup that's NOT presenting at FINOVATE (plug #2), Pertuity, the brainchild of ex-PNC Bank exec Kim Muhota. I like the overall look (below), decked out in our FINOVATE colors (plug #3), but clearly it's a placeholder for something more substantive (see note 1).

The Dare to Compare function, while provocatively named, is basically a well-dressed financial calculator that shows you where you stand in terms of income, savings, and debt compared to the rest of the country and those in your age group. It's a nice feature, but hardly unique and certainly not enough to attract visitors, let alone bring them back (see note 2).

UPDATE: After seeing Colin's comment (below), I looked at the site again and realized that I missed the "create a new group" function that allows you to compare your income, savings and debt against other pre-defined subsets. That's an interesting angle and could create a more sticky site with users going back to see how they are growing their income/savings/debt compared to various peer groups. I look forward to seeing how this plays out at Pertuity.

The Rate Survey, Expert Advise, and Blog sections are also just bare-bones link areas with little original content so far. The site appears to have launched just last week, so we are not criticizing (yet), just pointing out the current facts.

The website says "coming in 2008," so we'll be sure to check back in six months and see if they live up to their homepage boast:

….as we gear up towards our launch in early 2008; when we will bring to market a disruptive set of products that will uncomplicate your life, simplify your money and free your dreams.

Note:
1. The homepage has an overall calm look and feel, refreshing for a finance site. But Pertuity needs to lose the clip art of the three scary "suits" in the lower right and enlarge and break up the block of 10-point type in the middle (same goes for the micro-sized font in the blog).

2. Colin Henderson blogged positively about the Dare to Compare feature yesterday (here), but so far anyway, I don't share his enthusiasm that it's "quite revolutionary."  Colin probably has a better crystal ball than I, so I'll reserve judgement until the official launch. (Also, see my update above; obviously, Colin did a better job reviewing the functionality than I.)

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Firethorn and Monitise Make Major Announcements

By Jim Bruene Posted on
Categories: CheckFree, Finovate, Firethorn Mobile, Metavante, Mobile Banking, Monitise

September, October and November are traditionally great months for new product announcements. True to form, at least five major U.S. mobile banking announcements appeared last week. Brandon McGee posts a quick synopsis here.

Of special interest were the announcements by Firethorn/CheckFree and Monitise/Metavante, all of which will be presenting at our upcoming FINOVATE conference in New York City on Oct. 2 (see note 1).

Firethorn
Firethorn ended a relatively quiet stretch with an important announcement, the addition of Ogden, Utah-based America First Credit Union to its mobile banking consortium which includes Wachovia Bank among others (see previous coverage here). The top-10 credit union has more than 400,000 members and gives Firethorn a reference account in the credit union and non-mega-bank categories. The service is expected to go live in early 2008.

We've had the pleasure of hearing the Firethorn story several times, but going into the critical fall marketing period, it will be interesting to hear an update on the Firethorn rollout with AT&T and Verizon Wireless.

Monitise/Metavante Joint Venture
Although disclosed in March of this year, the Monitise and Metavante joint venture was officially announced last week (here). Monitise crosses the Atlantic with mobile banking and payment solutions already widely deployed in its United Kingdom home market under the MONILINK brand. Its client list reads like a who's who of U.K. financial and telecom players: BT Global Services, T-Systems, HSBC, First Direct, Alliance & Leicester, Royal Bank of Scotland, NatWest, Vodafone, Orange, O2, T-Mobile and Hutchison 3G. The JV's Oct. 2 presentation at FINOVATE marks the first time the new entity, Monitise Americas, will be on stage to DEMO the new service expected be available by year-end.

Note:

1. Our FINOVATE 2007 DEMO conference is expected to sell out some time next week, so if you want to reserve a place you should register ASAP at www.finovate.com.

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Mint’s Coming-Out Party at TechCrunch 40

By Jim Bruene Posted on
Categories: Finovate, Mint, Personal Financial Management

Update (8 PM Pacific): Earlier this evening, Mint was named Best Presenting Company at TechCrunch 40 (see here) and took home the $50,000 grand prize. A good first day in the life of the startup!    

Congratulations to Mint on being one of just two financial services startups to win a spot at TechCrunch 40, the tech-startup con-fab in San Francisco that concludes this afternoon. More than 700 companies applied for the presentation slots, and just 40 were chosen. The other financial company was Cake Financial which competes with Zecco, Covestor, and Social Picks, in the "social investing" space, i.e., companies that help users track their investment portfolios and share them with others.

Mint presented in the "Productivity & Web Apps" category this morning and received high marks, scoring a 4.0 out of a possible 5.0 from 67 voters. During the first seven sessions (35 companies), only three have scored higher than 4.0. Mint also received favorable comments from the expert panel comprised of Guy Kawasaki, Esther Dyson, Roelof Botha, and Mike Arrington (blog post here).

For those of you attending our FINOVATE conference Oct. 2 in NYC, you'll have a chance to see a live demo from Mint CEO Aaron Patzer. If you can't wait until then, Mint opened its personal finance app to the public today with a public beta version. Let us know what you think.

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Payments Still a Vital Part of Online Banking Success

By Jim Bruene Posted on
Categories: Billeo, CheckFree, Electronic Bill Payment & Presentment, Finovate, iPay Technologies, Metavante

As a one-time bill payment product manager, I've long appreciated the difficulties of making online payments live up to the hype. It was one of online banking's "dirty secrets" in the 1990s that if you wanted your bill paid quickly, you'd usually be better off whipping out your checkbook and dropping the "ink on dead trees" into the so-called snail mail (see note 1). 

Thankfully, those days are behind us. Thanks to CheckFree, Metavante, Online Resources, MasterCard RPPS, and smaller companies such as iPay Technologies, Billeo Inc., Princeton eCom (now owned by Online Resources), and Yodlee, we have reached the point where most bill payment transactions are fully electronic from consumer initiation to posting by the biller. The paper has finally been wrung from the system, at least on the remittance side. There's still some work to be done on the actual billing statement itself.  

Luckily, we have six of these payment innovators appearing at our upcoming FINOVATE 2007 conference to be held in NYC on Oct. 2, although Yodlee will be showing its online personal finance manager and Online Resources will be DEMOing its virtual collection technology. If you are interested in attending the conference, please register now, since there are only 37 seats remaining. Here's the link.

Billeo Inc.
 Billeo is an outside-the-box-thinking online payments facilitator that uses the power of Web-based tools to make it easier for consumers to track and manage all their payments, both at the point-of-sale, and one-time and recurring bills. Blue-chip clients include Visa and Target among others. The Santa Clara, CA-based company won an OBR  Best of the Web in 2005 for its toolbar-based interface. The venture-backed company's innovative streak lands it on the pages of NetBanker quite frequently (see previous coverage here) and we look forward to seeing the next generation of its service at FINOVATE in three weeks.  

CheckFree
 CheckFree literally created the market for online bill payment in the United States and has worked tirelessly to help convert what was once a large paper-pushing operation into a finely tuned, almost totally electronic, process. They've been the leader not only in creating a smooth back-office system, but also in smoothing out the rough edges in the payee sign-up process, in the customer interface, and in moving billers towards bill presentment. CheckFree, which closed on its acquisition of platform-provider Corillian just a few months ago, has been swept up by Fiserv in a proposed acquisition pending shareholder approval. Every year the company raises the bar for online bill payments, and I look forward to seeing what they have in store for FINOVATE attendees.

iPay Technologies
We've written about iPay Technologies in Online Banking Report a number of times, but unless you've shopped bill payment providers in the past few years, you may not be familiar with the nimble Elizabethtown, Kentucky-based firm. The privately held, 250-person bill payment specialist now handles payments for more than 1,000 banks and credit unions with a total user base just under 500,000. The company is a full-service provider offering not only bill payments, but also person-to-person payments, interbank transfers, gift-oriented payments, and even old-school telephone bill payment. If you haven't met the management team of iPay yet, you are in for a treat. Dana Bowers and her team are a delight, and I encourage everyone to talk to them during the FINOVATE breakout session.

Metavante
Metavante, wholly owned by Marshall & Ilsley, but on a path to be spun out later this year, is involved in almost every aspect of banking from risk management to loan originations and of course payments and online banking. The company's Products and Services page lists 78 items. I've had the opportunity to participate in its user conference the past three years, and it's mind-boggling to see the breadth and depth of its products displayed in one event. Its latest is a joint venture with leading UK-based mobile-provider Monitise, another FINOVATE presenter (press release here). On Oct. 2, Metavante will be demonstrating its Immediate Payments service, something that customers have long valued. It will be interesting to see how Metavante delivers on this tricky payment capability.

Note:
1. For those of you new to the bill-payment business, the reason snail mail beat online payments was that prior to the turn of the century, the majority of "online" bill payments were actually sent via snail mail, often from remote locations, that took longer to traverse the country than if the consumer had sent it themselves.

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M-Com’s Customer Base

By Jim Bruene Posted on
Categories: M-Com, Mobile Banking

 

As mentioned in Brandon's post earlier today, New Zealand-based
M-Com has amassed an extensive client list in the Australia/New Zealand market. Whether they can make the leap to the United States is unknown, but we should find out soon, since the company is targeting some well-known U.S. banks.

 

ANZ Logo

ANZ – Mobile Phone Banking
ANZ BankAnywhere Case Study – mobile phone banking
Customer Site – ANZ Mobile banking

BNZ LogoBNZ – Mobile Credit Card Payment
BNZ PayAnywhere Case Study – M-Credit

ETSL Paymark Logo

ETSL – Mobile Payment Platform
Electronic Transaction Services Limited (ETSL / Paymark) is the transaction-processing business of New Zealand's leading banks.

ETSL/Paymark PayAnywhere Case Study – Paymark Remote
Customer Site – ETSL mobile payment engine

National Bank Logo

National Bank – Mobile Phone Banking
The National Bank – BankAnywhere Case Study – mobile phone banking
Customer Site – National Bank mobile banking

Telecom – Mobile Prepay Bill Payment
Logo TelecomTelecom customers can top up their prepay mobile phone credit, using their everyday bank account, via a simple text message instruction.

Telecom – M-Billing Case Study – Mobile Phone Recharge
Customer Site – Telecom M-TopUp

Logo WestpacWestpac – SMS Banking
Westpac – BankAnywhere Case Study – txt banking
Customer Site – Westpac SMS Banking

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Bank of America Launches SafePass, but You’d Never Know From its Website

By Jim Bruene Posted on
Categories: Bank of America, Public Relations, Security & Privacy

If you were in the office yesterday, you probably heard about Bank of America's announcement of SafePass, an optional out-of-band authorization technique for high-risk online banking transactions. It was all over the news, including the trades, blogs, and a few mainstream press articles. Here's the press release.

The system, common in many countries, but available only at Citibank in the United States (previous coverage here), sends users a 6-digit code via text message. The code is then entered at BofA's website to authorize larger transfers, new bill-pay merchants, new accounts for funds transfer, or to login from a new computer, not previously "registered" for online banking. VeriSign developed the technology.

The service will roll out across the BofA empire this year, with many customers having it as soon as next week. Next year, a wallet-card token "SafePass card" will be offered for customers who don't have text-messaging capabilities on their phones.

Analysis
SafePass is a solid enhancement to security, at least perceived security, since it probably won't do much to cut down on actual fraud losses. It's already pretty difficult to get through BofA's security gates and pull money out of someone's online account. The bank did the right thing in making it optional. Only the paranoiacs, road warriors, or those with unusually high transaction amounts will want to undergo the extra steps.   

So while it may be ho-hum in terms of fraud reductions, SafePass is brilliant marketing (note 1). It's a tangible and easily understood copy-point as to why one should choose BofA over the other 15,000 U.S. financial institutions. Think of the bragging rights they now have (all firsts are U.S. only):

  • First to integrate mobile messaging into the authentication process
  • First to offer optional extra security
  • First to safeguard the process of adding a new bill payment payee
  • Potentially first to offer choice of token or mobile text message for out-of-channel authorization
  • Only bank able to put "SafePass" on their website—a very good name
  • Able to say, "no one has more security options than us"
  • Able to say they are a "pioneer in security enhancements"
  • Able to they "put the customer in charge of their own extra security"
  • And so on …

Congratulations to Bank of America for once again raising the bar in online security.

Rant
While I like what the bank has done, once again I find it astonishing that even 48 hours after releasing the news in a press release here, THERE IS NOTHING ON THE BofA WEBSITE ABOUT IT. A site search for "SafePass" pretending to be from North Carolina, New York, or California results yields just a single obscure business insurance product. Bank of America's search doesn't even return the press release announcing the service!

SafePass is also not mentioned in the bank's security, online banking, or mobile banking sections. I've worked in a Fortune 50 company, so I understand all too well how hard it is to sync advertising, PR, sales, and so on at a huge company. But with 22 million active online banking users, you'd think BofA would be a leader in syncing its website to its marketing plan. 

Am I being overly critical?  It's certainly worth writing about. 

Note:

1. For more information on the synergy between security and marketing efforts, see our full report on the subject at Online Banking Report.

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Online Personal Finance Heats Up: Part 2

By Jim Bruene Posted on
Categories: Digital Insight, Finovate, Intuit, Personal Financial Management, Yodlee

One of the biggest themes at our upcoming FINOVATE 2007: DEMOing the Future of Online Finance (here) is the interesting developments in the online personal finance space (see lineup below).

As we mentioned last week, the race to add personal financial management (PFM) features to online banking sites is just getting started. To some extent, every bank and credit union supporting online banking already offers extensive personal finance functionality. Think back on how the average person managed day-to-day finances prior to 1997: telephone calls, ATM slips, or in my case, the moment of terror once per month when opening the monthly bank statement.

But now that everyone offers base level PFM, the new race is to provide advanced features to hold on to customers, attract new ones, and potentially cross-sell complimentary products such as debt consolidation, mortgage refis, insurance and so on (see note 1). We also hope to see some fee income from the new features, either through elevated checking account fees, or with premium online banking surcharges (note 2). The latter appears unlikely to happen in the United States unless Bank of America starts charging fees.

At FINOVATE we'll see demos from five key players:

  • Two industry veterans, both two-time OBR Best of the Web winners, will be launching significant new versions this fall: Digital Insight (Intuit) and Yodlee
  • Two "class of 2007" new startups: Jwaala (coverage here) and Mint (coverage here)
  • And Geezeo, which recently changed its name and moved aggressively into personal finance (coverage here)

Digital Insight (Intuit)
 One of the most intriguing acquisitions in online banking in the past ten years was Intuit's purchase last year of online banking platform provider Digital Insight (see coverage here and here). Everyone expected the merged companies to push hard on personal finance, the core of Intuit's much-admired brand. I've had a chance to see the Personal FinanceWorks and Small Business FinanceWorks demos several times and came away impressed. Combined with the depth of Digital Insight's client base, these products have a chance to become the online banking standard within a few years. Intuit is a two-time OBR Best of the Web winner with its Web-based tax services.

Yodlee
Yodlee used to be known as "that account aggregation company." But over the years they've worked hard to shed that image and morph into a full-service financial tools provider. The company offers account-opening tools, bill payment services, personal financial management, long-term archives, and, yes, account aggregation, although it's now more integrated with the company's other services, especially its MoneyCenter personal financial manager. MoneyCenter is the engine behind Bank of America's MyPortfolio which helped Yodlee win its second OBR Best of the Web (see coverage here).    

Notes:

1. For more info on online personal finance, see Online Banking Report #132/133 and #142/143.

2. For more info on premium online banking pricing, see Online Banking Report #109.

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Chase Goes with SMS for Mobile Banking

By Jim Bruene Posted on
Categories: Chase Bank, Mobile Banking

The virtual-ink had barely dried on our substantially lowered forecast for SMS banking adoption in the U.S. (here; check out the comments as well), than the ever-aware Brandon McGee had the scoop that Chase, the third-largest U.S. bank, had quietly made SMS banking available to its customers.

We still don't know if it's a market test, or a full-blown launch, but we do know that this puts SMS back on the table again in the United States. Here's the bank's clever tagline:

Text Your Account. It Texts You Back.

Although Chase hasn't yet linked its SMS banking to the home page, it's not too hard to find at <chase.com/mobile>.

Note: For more on SMS and other types of mobile banking, see our full Online Banking Report on the subject here.

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Types of Financial Institution Blogs

By Jim Bruene Posted on
Categories: Blogs, Royal Bank of Canada

I am in the process of creating a table for the next issue of Online Banking Report, our 13th annual planning guide. The table (see draft below) is designed to show the wide variety of blog types available to banks and credit unions (see note 1). It's a tabular update to the "45 Reasons for Banks to Blog" article in our Bank 2.0 report.

Many (most?) blogs could be classified in two or more categories. For example, Royal Bank of Canada combines student marketing, event awareness, and recruiting at its RBC p2p site where the bank is soliciting entries for six college-student bloggers to create video and text content for its student site (screenshot below; note 2).  

Here's the list so far. Am I missing anything? A $5 Starbucks card for anyone who comes up with a new blog type for this list or who provides an example to fill in the ??? holes in the table (please leave in comments below):

 

 Type  Financial Institution Examples
 Contest  RBC's (Canada) Next Great Innovator Challenge & RBC p2p
 Recruiting  Quicken Loans What's the Diff?
 Product focused  Student Loandown from Wells Fargo
 Community building  Piedmont Credit Union
 Community service  Vancity Change Everything
 Board report  The Boardcast from UFirst Credit Union
 Students/kids  Stagecoach Island from Wells Fargo; RBC p2p
 B2B  Wells Fargo CEO (Commercial Electronic Office)
 Special interest  Bank of Internet MyRVBank.com
 General  PayPal, Tech CU, Verity CU and 30+ others
 Single employee effort  Mobile Banking from Huntington Bank's Brandon McGee
 Credit education  Credit Bloggers from Credit.com
 Shareholders  ??? (see note 3)
 Real-estate owned, repos  ??? 
 Branch manager  ???
 Real estate  Zillow, Redfin
 CEO/exec blogger  Tinfoiling by Gene Blishen, Mt. Lehman CU (Canada)
 Events/sports  ???
 Online banking tips & tools  ???

 

More information and links to the above blogs can be found in the "blogs" topic here.

Notes:

1. For a thought-provoking editorial on how blogging can be incorporated into financial institution websites, check out Ron Shevlin's latest here.

2. Hat tip to Colin Henderson for posting about RBC p2p here.

3. ??? means I don't know of banking or credit union examples for these blog types; $5 Starbucks cards for the first commenter to fill in the blanks.

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OK, Two Major U.S. Financial Services Firms Not Named Wells Fargo are Blogging (Quicken Loans)

By Jim Bruene Posted on
Categories: Blogs, Careers, Quicken Loans

An interesting aspect of blogging is that when you get something wrong, you are quickly called on it, oftentimes through public comments. While I hate making mistakes, I like the fact that it's easy to correct the record with an update to the original entry.

So I was glad to see the comment yesterday from Ann-Marie Murphy (here) informing me, and the world, that Quicken Loans has been publishing a blog for more than a year. Making them, not PayPal, the second major U.S. financial-services company to blog. And after looking at it, I was doubly glad she took the time to comment, because it's a top-notch blog and it gives me the chance to do something I've always wanted to do, work Dave Matthews Band into a blog post. I figured if Ron Shevlin can blog about the Grateful Dead four times (here), I can at least slip in one DMB mention.    

The well-designed Quicken Loans blog is called "What's the Diff" and is run under its own URL <www.whatsthediff.com>. It features stories written by employees, and guest bloggers, about making a difference in the world. Published entries win a slick t-shirt.

It just so happens that the most recent entry chronicles the experience of Quicken summer intern, Mark Messing, as he helped push stuck vehicles out of the mud-filled parking lot at the Cuyahoga Falls DMB concert (see note 1). It's well written and exudes a positive, can-do attitude that leaves the reader with good feelings about the company.   

The Quicken Loans blog is more of a recruiting tool than a marketing device. Notice the big red button on the right asking, "Are you the difference?" That's designed to attract high-achievers to apply for a position with the company. Clicking on the button brings job candidates to an attractive "careers" landing page that carries the same "The Diff" theme, and has its own URL <www.quickenloanscareers.com>. It's very well done. That attention to detail in the recruiting process no doubt helps it achieve its position in the Fortune and ComputerWorld 100 best places to work. 

The only gripe I have with THE DIFF is the 3-column layout with the blog entries in the middle. While not uncommon, blog readers tend to expect the posts to be in the far-left column. This non-standard layout makes it slightly harder to navigate for first-time visitors. But this layout does help expose more content, so it's not a terrible tradeoff.  

Grade: A+

Note:

1. Like Mark, I've been stuck in the endless line out of the parking lot at The Gorge here in Washington state, most recently this past Sunday night. But instead of waiting in line for an hour, we got out of our car and visited with some friends we'd met that night. Now that's not a good enough story to make the What's the Diff blog, but it does help me win a bet!

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Online Personal Finance Heats Up: Part 1

By Jim Bruene Posted on
Categories: Finovate, Jwaala, Mint, Personal Financial Management

The race to become the next Quicken of online finance is heating up this fall with several launches expected before year-end (note 1). At our upcoming new products conference, FINOVATE 2007, you will be treated to live demos of five leading personal finance apps. Three are newcomers: Geezeo, Jwaala, Mint, and two are industry veterans launching new online versions, Digital Insight (Intuit) and Yodlee. Here are brief profiles of two newcomers. We'll look at the other three in part two on Friday.

Jwaala
 Jwaala, out of Austin, Tex., made a splash in March when it debuted on Amplify Credit Union's site, winning our OBR Best of the Web award in the process (see post here). The specific feature to win recognition (see note 1) was the personalized RSS feeds available to MoneyTracker users. The natural language search is also a significant improvement over typical expense manager search functions.

Jwaala, which was a finalist in the TechCrunch 20 start-up conference, has also built a simple Google-like, text-based ad server into its MoneyTracker interface. It allows CU and bank marketers to run relevant marketing and educational messages next to transaction data and query results (see screenshot #1 below). Amplify CU, which is an investor in Jwaala, has given the service considerable marketing play with several links on its homepage (see screenshot below) and a series of instructional/marketing videos accessible from the MoneyTracker landing page (here).

Mint
Mountain View, Calif.-based Mint is still in limited private beta, so we can't say much about its online personal finance manager. However, the company says this about itself:

Mint is building a free, simple, and secure personal finance web-app. Designed to be effortless, Mint consolidates your financial life in one place. Easily see how much you have, how much you owe, and where your money goes. Advanced alerts notify you before you bounce a check or forget to pay a bill. Patent pending algorithms even show you personalized ways to save and make more money. If your finances could use organization without effort, Mint is for you.

After putting our name on its mailing list several months ago, we finally received an invitation to its private beta Saturday. I am about to sign up, but since I will be sworn to secrecy, I wanted to finish this post first, so that I wouldn't have to worry about accidentally revealing a feature. As we mentioned in our previous post (here), you can learn quite a bit about the product and the company's outlook by reading the active Mint blog (see screenshot #3 below) which has published 102 articles in its 6-month history, an amazing amount of content for a company that hasn't yet launched its product.

Notes:
1. For more information, consult two recent reports from Online Banking Report: Online Personal Finance and Social Personal Finance.

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

Exhibits 

Screenshot 1: Jwaala interface showing personalized "marketing bar" (4 Sept 2007)

 

Screenshot 2: Amplify CU homepage with links to Money Tracker (5 Sep 2007)

Amplify CU homepage 5 Sep 2007

Note: Amplify makes great use of video to sell the benefits. Check out the video tour of its "cafe style" branch (on the Amplify homepage here, click on the "play video" button to the right of the branch photo).

Screenshot #3: Mint blog main page (5 Sept 2007)

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Finally, a Major U.S. Financial Services Company Not Named Wells Fargo is Blogging (PayPal)

By Jim Bruene Posted on
Categories: Bank 2.0, Blogs, PayPal

Update: Quicken Loans has also published a recruiting blog for the past year (thanks Ann-Marie, see comments below and NetBanker post here).

I've been a big proponent of blogging. In my Online Banking Report on the subject published last fall (here), I predicted there would be 300 financial institution blogs by the end of this year. While there is no definitive listing, OpenSource CU's blogroll lists just 15 CU company blogs. Even if you add the CU employee blogs, MySpace pages, and four blogs from Wells Fargo, the grand total is less than 100 today, and unlikely to get much higher than that by year-end.

Why the slow start? Having worked inside several banks, I do not underestimate the difficulty in creating a new communication channel. And from what I've heard, many banks and credit unions just don't believe the benefits, which are largely intangible, will outweigh the costs. And with so few banks blogging, Wells Fargo being the only major in the U.S., it's hard to show examples to demonstrate the power of the blog.

That's why we were happy to see one of our favorite companies, eBay's PayPal unit, launch a blog a few weeks ago (here). As you can see it's not too fancy, and they post to it only a few times each week. But it really hits the mark, in my opinion.

Here's why:

1. Humanizes the organization: The initial posts are by various department heads or senior staff and discuss briefly what they do and a major initiative each is involved in. Each post has a small head shot in the upper left that increases the credibility of the posting (see screenshot below).

2. Educates in a more interesting way: PayPal managers are obviously excited about their projects as their enthusiasm comes across in the writing and makes the reader interested in the subject. For instance, last week CIO Michael Barrett posted seven paragraphs (here) on improving the safety of your online computing experience. It's a good way to get a simple message across, that users should use up-to-date operating systems and browsers. Usually, that advise is buried  five layers deep in a security FAQ.

3. Sells with a more "consultative" approach: Several of the blog entries are designed to "sell" but again, when the head of consumer marketing blogs about the latest program, as Hillary Mickell did about PayPal's back-to-school shopping portal (here), it's much more believable than a banner ad slapped onto the homepage (see screenshot below).

4. Communicate during an outage or severe service problem: The most recent entries (here and here), both posted on the Sept. 2 holiday, informed and reassured customers about the problems with subscription services.

The challenge is generating readership. Would I subscribe to the blog if I was a consumer making an occasional PayPal purchase? Unlikely. But if I'm a merchant, and the PayPal system is an integral part of my livelihood, you can bet I'll pore over every word (note 1).

So, financial institutions, if you want to get into blogging, find the communities where you really make a difference and start speaking to them (see note 2).

Note:

1. The press and analysts will subscribe, spurring articles on your company such as this one.

2. Although perhaps just a shade too critical of the industry for my tastes (see the first comment for some balance), Verity Credit Union's latest post (here) speaks from the heart about the sub-prime lending fiasco and the CU's "Keep the Dream" fund to help at-risk borrowers keep their homes. Great post. Great program. Unfortunately, I couldn't find anything on the website about it.

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