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Electronic Bill Payment & Presentment Predictions

By Jim Bruene Posted on January 13, 2006
Categories: Electronic Bill Payment & Presentment

The electronic bill payment and presentment (EBPP) headlines in 2006 will be mostly about vendors offering integrated EBPP platforms, spawning in turn a clutch of M&A stories, says Ron Averette, Princeton eCom Inc.’s ceo. Expect to see the number of payments players this year dwindle.

“You’ll continue to see core processors looking to add bill pay as an ancillary capability to their other product offerings,” he says. Averette cited Fiserv’s July 2005 acquisition of BillMatrix for $350 million as an example of a big payments shop, interested in having a bill payment capability, using an acquisition as the foundation of an integrated family of EBPP products. In the coming year, he says, all of Fiserv’s competitors will be jumping into the pond.

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Pending Financial Data Protection Legislation

By Jim Bruene Posted on January 13, 2006
Categories: Legal

Data protection is probably the biggest payments-related portion on Congress’ 2006 plate, says Nessa Feddis, the American Banker’s Association’s senior federal counsel.

Whatever law eventually emerges-as many as six were proposed last year-the topic was a natural for Congress, which has had to at least appear to respond to last year’s flood of data breaches. An industry-supported bill sponsored by Sen. Jeff Sessions was passed by the Senate Judiciary Committee in October (see Electronic Payments Week, Oct. 25, 2005), but it died before it could come to a vote. "The enthusiasm for data protection [legislation] was a bit complicated by the fact that there are six committees involved," says Feddis.

Continue reading “Pending Financial Data Protection Legislation” →

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Voice Mail Option for Customers on Hold

By Jim Bruene Posted on January 11, 2006
Categories: Service

For only the second time in the 5.5 years since I became one of the first customers of online home-equity pioneer DeepGreen Financial <deepgreenfinancial.com>, I had occasion to contact customer service over an error on their end. Normally, I would use email, but this was one of those times when you need to speak to a human.

After navigating a relatively sparse phone menu, I pressed zero and found myself on hold; nothing unusual about that. After about a minute the recorded voice came on with the usual yada-yada about the importance of my call. But then I was surprised to hear the computer offer the choice of staying on the line, or leaving a voice message for a return call.

I chose to hold and my call was answered a few minutes later by a helpful service rep. Overall, I left this interaction thinking more highly of the bank, even though their error had forced me to call and spend four minutes on hold. It’s all about exceeding expectations. And it doesn’t take much to do that when it comes to banking customer service, or really any toll-free support line. So keep working on those incremental improvements, as they can pay off immeasurably in the long run.

What would be even better, given the bank’s customer base of experienced online consumers, is to also offer a special email address such as urgent@deepgreenbank.com with a guaranteed 30-minute response time. That would really leave a great impression with Internet-savvy callers (see OBR 106/106 for hundreds of more ideas to make your E-service shine).

—JB

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Bank of Internet’s Niche Banks

By Jim Bruene Posted on January 6, 2006
Categories: Bank of Internet, Strategies

Bank of Internet <bofi.com> announced today the launch of its second specialized online bank, Senior BofI <seniorbofi.com>. While it may not be the sexiest name on the planet, it does help establish the link to the more established entity, Bank of Internet, a comfort to the market it’s going after, seniors.

This marks the second specialized online bank operated by BofI, the five-year-old, online-only bank. The other is Apartment Bank <apartmentbank.com>, which caters to owners of multifamily-housing properties.

Analysis
We like BofI’s strategy of going after national niche markets with specialized services. The ApartmentBank concept is especially unique given the small total universe it serves. Looking at the recent fundings, it appears to be gaining some traction, especially in Texas, Arizona and a few neighboring states. The website lists 12 deals worth $16.6 million, half the dollar volume from Texas (click for screenshot of Apartment Bank).

We are less enthusiastic about the initial Senior Bank implementation. Given the competition for this segment, the bank will need to mount a stronger effort. Other than the user-friendly SMALL/MEDIUM/LARGE/X-LARGE font selection tool in the lower-left of the homepage (click on screenshot above for closeup), there isn’t much to differentiate the bank, or its products, from thousands of other banks, most of whom cater to seniors with special accounts and pricing.

For example, The Community Center is dominated by a list of DVDs for sale at Amazon, including Batman Begins, and TV shows, Lost, Firefly, and Friends (see inset). The bank loses whatever credibility it had gained on its homepage once seniors see random selections from Amazon’s inventory dumped onto the website. Seniors don’t even like to shop online, especially for DVDs aimed at 20-somethings.

The Grades
A for strategy
B for implementation of Apartment Bank
C- for implementation of Senior Bank

—JB

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Holiday Stock Picking Contest

By Jim Bruene Posted on January 5, 2006
Categories: Investment Products, UMB Bank

UMB Bank <umb.com> ran an eye-catching sweepstakes in mid-December (click on inset for closeup). Users were invited to register online to participate in a week-long stock-picking contest. The contest had its own URL <stockingstuffer.umb.com>.

The contest ran from Dec. 12 to Dec. 15. Top prize was a $1000 Target gift card with second receiving $750 and $500 going to the third-place finisher. Users were required to choose winning stocks from a list provided by the bank. Users could log in anytime during the week to see where they stood. The contest was open only to residents of Missouri, Kansas, Colorado, Oklahoma, Illinois, Nebraska or Arizona. An identical second contest ran simultaneously that was open only to UMB employees.

Analysis
Stock-picking contests are a tried-and-true way to gain Web traffic, email addresses, and add excitement to your website, and in UMB’s case to reward employees in a separate sweeps. The bank ponied up for a decent prize pool of $2250 for customers and another $2250 for employees; the graphics were superb; the "stocking stuffer" theme played well around the holidays; and the contest was interactive with the ability to log in and check standing in near-real time.

However, the one-week duration caused a substantial decrease in its overall marketing value. Usually these stock-picking contests run for several months, with leaders posted at various intervals. The holiday theme used by UMB created a natural year-end deadline, so it should have started in early- to mid-November for maximum impact.

—JB

Marketing Database –

If you’d like to learn more about the latest financial interactive marketing campaigns, check out the Interactive Financial Marketing Database from our sister publication, the Online Banking Report.

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Should You Launch a Financial Podcast?

By Jim Bruene Posted on January 4, 2006
Categories: Podcasting, Public Relations, Website Usability & Design

Podcast was voted the 2005 Word of the Year by New Oxford American Dictionary. That alone is enough to make it an interesting marketing technique, even though it’s more associated with music than banking.

So far, two U.S. financial institutions have jumped on the podcasting bandwagon:

The first financial podcaster was Stockton, CA-based Financial Center Credit Union <fccuburt.org>. Its rambling, 56-minute first effort, Personal Finance Tips, from CEO Michael Duffy, was posted on Apple’s iTunes on August 30. The program is more philosophical than factual and sounds almost unscripted, as if the CEO just sat down and talked about whatever came to mind for an hour. It’s hard to imagine anyone other than his mother or marketing manager listening to the whole thing. Since then, they’ve published two more installments of the series: a 31-minute Personal Finance Tips, posted Oct 17, and a nine-minute discussion of phishing and pharming on Dec. 14. The latter program, which did NOT feature the CEO, was a more appropriate length and dealt with facts and actionable information.
–
While the content is of questionable value, the website design is good, positioning the CU as hip and with it. The podcast series is entitled, Talkin’ About the Benjamins, and features a clever visual of Ben Franklin with the signature Apple earphones on his head (see inset above left). The credit union has a link on its homepage to a dedicated podcast page (click on inset above for closeup) that explains how to subscribe to the series via Apple’s iTunes site or to download directly from the CU site in MP3 format.
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The first bank to post a podcast was UMB Bank <umb.com> out of Kansas City. The first of the three planned recordings was posted Dec. 5, The Ins and Outs of 401(k) Retirement Plans. The bank also makes its podcast available for free downloading at the iTunes store or directly at the bank’s website. The recording is a question-and-answer session with UMB Portfolio Manager Casey Matthews. The UMB program is also relatively amateurish, with the participants nervously chuckling at their own jokes. At more than 24 minutes, it’s too long, but for a listener with little knowledge of retirement plans, it’s not a bad educational program.
In contrast to the marquee placement of FCCU’s podcasts, UMB bank buries the program in the middle of a long list of content within the News and Information part of the website (click on inset above for a closeup). This considerably diminishes the marketing value.

Analysis
The question isn’t really whether to podcast or not, but rather whether audio/visual content should be added to your website. The answer to the second question is a resounding YES. It’s time to leverage the high-speed Internet connections enjoyed by the majority of your customers with professional audio and video content. There are numerous programming tools that can be used; the most common is Macromedia FLASH, to develop good audio and video programming.

There isn’t really a pressing need to provide the information in the proprietary iPod format. The number of users who will want to download your sales pitch and listen to it on the train ride home can be counted on one hand. However, given the hype surrounding everything iPod, it’s not a bad idea to post your work as an iPod recording.

If you do end up with a podcast, keep these tips in mind:

Keep it short and to the point: Strive for a tight, overall length of no more than 5 to 10 minutes. If the subject matter needs more time, break the broadcast into multiple parts.
Make it professional: Listeners expect a degree of professionalism from their bank that they don’t expect from other podcasters. If you can’t afford to hire a pro to develop the program, try tapping into the eager broadcasting majors at a local university or community college. At the very least, develop a script and practice before broadcasting.
Use a Q&A format: We like UMB’s format, pairing an interviewer with a bank expert. Had they kept to the 10-minute limit, it would have been worth listening to.
Lose the humor: Banking is serious. It’s OK to use some humor in advertising and promotion, but a broadcast from the bank should not include any attempts at humor, and NO laughing at your own jokes.
Post it at iTunes: Easily explain how to find it, so that users can quickly subscribe to future broadcasts.
Most important, marry the audio broadcast with visual aids: UMB’s 24-minute podcast on retirement savings would be much more effective with supporting visuals, especially as they run through several examples of after-tax returns of various investment options. A standard webcast using PowerPoint and an audio presentation would be far more effective, although less likely to land you a write-up in the local newspaper.

—JB

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Know Your Banking Customers, Especially Reporters

By Jim Bruene Posted on January 2, 2006
Categories: Public Relations, Security & Privacy

Remember the old saying (usually attributed to Mark Twain), "Never pick a fight with someone who buys his ink by the barrel." An unnamed "national bank" has created an enemy of LA Times reporter Steve Lopez, who so far, has not publicly identified the bank that refused to reimburse him for the $2000 drained out of his account after an ATM-card-skimming incident. But given his location, and the hints in the article, it’s probably Wells Fargo, BofA, or WAMU. Given our personal experience with the relatively strict Wells Fargo credit card authorization guidelines, combined with the relatively small WAMU checking account base, our money is on BofA as the culprit.

In this particular case, the bank did the right thing initially, crediting the reporter’s account for the $2000. However, it reversed the amount four weeks later, sending a form letter with no explanation. In a followup call, the bank service rep told Mr. Lopez that he had not returned phone messages from bank investigators, so they concluded the disputed ATM withdrawals were "authorized and posted correctly."

Action Items
This type of bad publicity is entirely avoidable:

Prevention: Your ATM system should not allow four $500 withdrawals in three days, unless the customer has a history of large cash withdrawals.
Notification: All large ATM withdrawals should trigger alerts, first by email, then by phone if the withdrawals continue.
Communications: Make sure you communicate the results of your ongoing investigation clearly to the customer. Customers should receive a stream of emails, letters, and phone calls keeping them apprised. If possible, all emails should be posted to the customer’s online banking account to create a paper trail.
Most of the above steps are relatively expensive to implement if not supported by your current systems. So you might want to consider a fourth item:
Flag reporter accounts: Treat reporters like VIPs, making sure their accounts are flagged, and that you bend over backwards to give them the benefit of the doubt when disputes arise.

—JB

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Marketing Promotions on Your Banking Website

By Jim Bruene Posted on December 28, 2005
Categories: Advertising & Promotion, Website Usability & Design

There are many ways to boost the sales effectiveness of your website, from the navigational layout to copywriting and security assurances. But one area that deserves attention is the design, layout, and placement of the homepage promotions, along with landing page displayed when clicking through for more information.

In terms of overall design, we recommend banners and links that attract attention without dominating the page. Since most visitors are at your site to find specific information, say CD rates, you don’t want a banner for auto loans dominating the page, potentially sending users to another site that’s easier to navigate.

You also need to be mindful of your image. Do you want to look like Overstock.com, pitching special offers and deals, or do you prefer a more understated tone, like a professional adviser? You want the homepage to reflect your overall marketing strategies to the online segment.

There are several approaches that have gained popularity in the past several years. Today we’ll look at one of the best approaches:

Small "postage stamp" banners in the lower portion of the screen, but above the fold (click on inset above for closeup). For example, Wells Fargo’s layout for the past three years displays square banners in the lower-right corner. Currently, two of eight possible choices are shown when the user arrives at the site (click refresh a few times to cycle through all eight).

Each banner leads to a well-crafted landing page with more information about the product or service. Not all of the banners are product pitches. For example, one describes an online feature, My Spending Report (NetBanker Feb. 17); another is service oriented, reminding users that they can access accounts 24/7 even during the holidays; while another (see Landing Page below) is designed to save the bank money by encouraging users to receive electronic statements instead of paper ones (click on the banners below for a closeup).

Gallery of Wells Fargo homepage banners displayed Dec 27, 2005

Landing Pages
It’s one thing to get your banner noticed, but then what? Users that click for more information should be led to a specific page, called a landing page, that reinforces the banner and provides more information. If the ultimate goal is a product sale, then the landing page should act as a funnel, delivering users to a single, actionable step, BUY. Extraneous navigational choices, like cracks in a plastic funnel, simply cause leakage of an extremely valuable commodity, interested prospects.

Wells Fargo has a separate landing page for each of the eight banners shown above. At left (click for closeup), you can see the one created for the "FREE online statement delivery" banner. In this case the bank is hoping to boost usage of online banking, and specifically the online statement feature, which has the potential of not only improving account retention, but also cutting printing and postage costs as users elect to turn off paper statements (required in this case).

—JB

If you’re in need of more financial interactive marketing ideas, check out the Interactive Financial Marketing Database from our sister publication, the Online Banking Report.

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Desktop Financial Marketing Demand

By Jim Bruene Posted on December 27, 2005
Categories: Desktop Presence, Metrics & Market Research

In a study released by market researcher Compete, Inc. <compete.com>, online users surveyed overwhelmingly said they wanted more information from their financial service providers, and they were willing to download a special application or plug-in to facilitate the information exchange (click on inset to see closeup of Southwest Airlines DING service).

Key findings:

73% would like to be made more aware of new offerings and services
69% would download a desktop application so that they could receive useful information from their financial services provider on a regular basis
78% would do so if the program protected them from fraud
5% would be unwilling to go online to receive information from financial services

Analysis
The success of Southwest Airline’s DING service (NetBanker Dec 5), which puts Southwest right on the computer desktop, along with toolbars from eBay, Google, and most recently Bank of America (NetBanker Dec 12), have not gone unnoticed in the financial services community. Until email trust issues are solved, which may take three or four years, a direct connection to the user’s desktop makes good business sense. As Compete’s data shows, more than three-quarters of consumers said they would download a desktop application, as long as they felt it would be a security improvement to do so.

Financial institutions should try to add a "safe and secure" theme to all account management tools, from email alerts to electronic statements and more.

—JB

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Holiday Bill Pay Sweepstakes

By Jim Bruene Posted on December 26, 2005
Categories: Advertising & Promotion, Epayments

To increase electronic bill payment usage, both Digital Insight and Online Resources are sponsoring holiday usage sweepstakes that client banks can offer to end-users. Modeled after similar programs at MasterCard and Visa, the promotions provide an incentive to pay bills online. By pooling the entries from all participating banks and credit unions, the prize pool is bigger than if a single financial institution sponsored it individually.

Some highlights of the two programs:

Digital Insight <www.diproductsite.com/q4_05_pay_anyone/splash/splash.html>

One single prize of $30,000 across all participating financial institutions
Three-month duration: One entry after paying 10 bills between Dec. 1 and Feb. 28
One additional entry for each payment greater than $10 (maximum 10 additional entries)
No more than one payment per payee per month counted towards total

Online Resources <www.orcc.com/sweeps/holiday05>

One grand prize of $5000, two first prizes of $250 gift cards, plus one second prize of $100 for each participating financial institution
Two-month duration: One entry for every bill paid between Nov. 1 and Dec. 31, 2005

Analysis
We like the concept behind both programs. Fourth quarter usage sweepstakes and bill pay marry very well. The Online Resources program is easier to understand with virtually no fine print (click on screenshot right for a closeup); however, it featured a stingy $5500 prize pool (not including the $100 for each participating bank/credit union).

In contrast, Digital Insight offered an eye-catching $30,000 grand prize, but offered no smaller consolation prizes (click on inset left for a closeup of the contest rules). It also required 10 payments before the user was entered into the drawing, a detriment to lower-volume, casual users.

Other Bill Pay Sweeps

RBC Centura <centura.com> is offering a total prize pool valued at just under $10,000, with a grand-prize trip to the ACC basketball tournament (valued at $3500) and 100 runners-up earning $50 in ACC merchandise. Users receive one entry each day they pay a bill between Dec. 2, 2005, and Feb. 17, 2006 (click here for screenshot).
In another basketball-themed promotion, University Credit Union <ucu.org> in Southern California is giving away tickets to UCLA basketball games, and a grand prize of a John Wooden autographed ball, to members using bill pay in Oct/Nov/Dec. Users receive one entry per bill paid (click here for screenshot).
PNC Bank <pncbank.com> has been running a bill payment sweeps for its business customers since mid-year. Each month, one out of every 100 new bill pay customers receives their choice of an iPod, $300 Marriott travel card, or $300 Staples card. In addition, each month the same prize choice is awarded to one existing customer who paid a bill that month. The sweeps ran from July 1 to year-end. (click here for screenshot).

—JB

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Everbank Goes on the Offensive Against Latest Phishing Scheme

By Jim Bruene Posted on December 20, 2005
Categories: Everbank, Phishing, Security & Privacy

If you are a smaller bank or credit union and are phished for the first time, you might consider the approach Everbank took in response to a phishing incident today.

The bank took the unusual step of sending an email to its customers warning them about the fraudulent email (click on the screenshot below for a closeup). They even included a copy of the phishing message at the bottom of the warning. The bank also posted a small red-outlined box on its homepage (see inset) with a link to the same email message.

Analysis
Although it may seem futile to send an email warning about a fake email, we think it’s a good idea if the phishing episodes are infrequent. The big targets such as Citibank or PayPal can’t do this, not with dozens of attacks every month; however, smaller companies should consider proactive email communications, but no more than a few times per year, otherwise customers won’t pay any attention.

Most users will realize the Everbank response is genuine, because it doesn’t ask for any customer information, especially when they compare it to the fake message at the bottom of the screen.

Yes, some customers will be even more confused. But hopefully their calls to customer service will provide you with a chance to put them at ease. There are costs associated with these anti-fraud efforts, but that’s part of the trust involved in being in the banking business.

—JB

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Unique Identity for Business Banking

By Jim Bruene Posted on December 19, 2005
Categories: Advertising & Promotion, Small Business

There are several ways to make it easier for business banking customers to find the right area of your website:

Complete unique URL such as Abbey National’s <anbusiness.com>
Business/biz appended to the URL such as Vancity’s <vancity.com/MyBusiness>
Business added within the URL such as Barclay’s <www.business.barclays.co.uk> or LaSalle Bank’s <vip.lasallebank.com> for its private banking area
Use cookies to automatically display the business area when users type your normal URL. Wells Fargo uses this technique. When homepage visitors choose the Small Business area, a small text link asks, Make this the first link you see on wellsfargo.com (click on inset for a closeup) which sets a cookie to redirect users to the Small Business area each time they go to the main bank site.

Analysis
All of these techniques are trivial to program and can help differentiate your business offerings from your personal product line. We especially like Abbey National’s unique business URL that can be a memorable device in print ads and direct mail. Also, anyone with a separate business offering should consider the optional user-set cookie approach of Wells Fargo.

—JB

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