Bank of America Tops One Billion Online Sessions Annnually

By Jim Bruene Posted on
Categories: Bank of America, Metrics & Market Research

Also at the Net.Finance conference today, Linda Worrell from Bank of America reported that its online channel handles more volume than the call center and ATM network combined.

Here’s the breakdown:

13.1 million active online banking customers login in to their accounts an average of 10 times per month. That’s 130 million sessions monthly, or 1.6 billion annually.

In comparison:

  • the call center handles 825 million calls annually
  • the 16,000-machine ATM network processes 840 million transactions
  • its 5,800 branches handle 600 million

— JB

If you’d like to learn more about the future of online banking, check out the Online Banking & Bill Pay Forecast: Current, future and historical usage: 1994 to 2016 from our sister publication, The Online Banking Report.

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Logout Promotions at Wachovia

By Jim Bruene Posted on
Categories: Advertising & Promotion, Wachovia

What are you doing to deal with customers who have become increasingly adept at tuning out your promotions when logging in? Wachovia for one, has been using logout-page promotions.

Today, SVP Young-Sun Yun told a Net.Finance audience of several hundred gathered in Phoenix that Wachovia places promotions on logout page. She reported that while the logout page promotions generated higher clickthrough rates, conversions were nearly two times higher with homepage promotions.

Therefore, the homepage still creates more sales, but the logout page is an important marketing device. Even with a lower conversion rate, it make sense to use the one-screen available post-login, where the user has finished their online banking tasks and presumably could be attracted to a promotional offer.

Fascinating Metric
Young-Sun Yun also told the audience that the bank’s website is now producing as many checking account applications as 111 branches, up from 42x two years ago. We’re not sure how that compares to others in the industry, but it might be a useful stat in your next budget request.

–JB

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Leveraging the Paper Bank Statement for Marketing

By Jim Bruene Posted on
Categories: Advertising & Promotion, Channel Integration

When looking for ways to drive more customers online, don’t neglect your paper statements, especially the envelope.

We recently opened a Citibank checking account and were impressed with the online banking pitches on the back of the envelope carrying our first monthly statement.

On the rear flap:

Life is different from day to day.
         So is a bank account.
          citibankonline.com

Across the main body of the rear envelope:

Receive email and wireless banking alerts on balances, deposits, and checks cleared

See bank statements online up to 7 years back.

Track paid checks online shortly after they clear.

Move money across accounts in the US or abroad

And, this is very clever. On the INSIDE of the envelope, framed inside the front window (when the statement is removed):

citibankonline.com
Sign on today!

Finally, on the rear flap of the envelope that carries business credit card statements, our favorite:

If you saw your statement online,
you’d already know what’s in this envelope.

Analysis
Using the back of the envelope is hardly a major marketing initiative. But given that it’s essentially free, why not use it at the precise time when users are thinking about their account?

—JB

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Starbucks gets Creative with Prepaid Cards

By Jim Bruene Posted on
Categories: Bank of America, Prepaid/gift cards, Stored Value Cards

Email_starbucks_cardWhen it comes to stored value cards, Starbucks is the one to watch. It’s most recent innovation: a Mother’s Day "card" with a place on the plastic where you can jot a quick note to mom (see close-up below).

Don’t you wish you would have thought of that?

The Starbucks stored value card, first introduced in 2001, is just now being positioned as a collectible. Stores in the Northwestern United States and in Japan are selling a sealed $10 prepaid card carrying the likeness of popular Mariner baseball player Ichiro Suzuki. The cards are also sold online at Starbucks.com.

AnalysisStarbucks_ichiro_card
We believe stored value gift and travel cards are a natural for online banking. They provide an interesting retail element unavailable with most banking products.

The Starbucks email (click on the thumbnail above) is a good example. What bank product would have worked so well in a Mother’s Day promo?

In additio to their marketing benefits, prepaid cards command fees and can be profitable; no small matter in the United States, the land of free online banking and bill pay. 

Starbuck_mothers_day_card_1Ironically, Bank of America recently dropped out of the retail prepaid card business, most likely due to increased state rules and regulations on dormant account fees, one of the primary profit drivers for banks.

Don’t let BofA’s move worry you. Just be thankful there are now 12 million more potential customers for the rest of the industry to share.

—JB

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The Year of the 10-Year Anniversary

By Jim Bruene Posted on
Categories: Advertising & Promotion

Ebay_10_logoDuring the next few years, expect to see tenth anniversary logos plastered all over the web, as major ecommerce players celebrate their 10th birthdays. This year we have eBay, Yahoo, Amazon, and of course Online Banking Report. And who could have imagined 10 years ago that those three retailers would book 30 million purchase transactions in the month of March alone (see table below).

Curious as to how many websites were marking their tenth, we did a little Googling and found the following:

  • 10 years online — 75 times
  • 10th anniversary online — 74 times
  • Tenth anniversary online — 18 time

Analysis
Even though it may be a bit overused, we recommend that banks use their upcoming tenth anniversaries as the basis of an offline and/or online promotion. It’s a significant milestone, especially for ecommerce and online banking, which is still viewed by the mass market as new and unstable.

This year, more than 400 banks worldwide have the opportunity to celebrate 10 years online (the Jan. 1996 issue of Online Banking Report listed 425 banking websites at year-end 1995). However, only a handful (Wells Fargo, Stanford Federal Credit Union, Canada Trust for example) can boast of having hosted web banking for 10 years. 

To mark the occasion, you might consider a virtual open house, press release, or special price promotion (10-year CD, 10-year home equity loan, 10% money market account for the first month, etc.). Another idea would be to identify customers who’ve banked online for 10 years and provide them with recognition and some ever-popular logowear.

—JB

Top 5 Online Retailers, Ranked by Purchases for March 2005 (U.S.)
eBay = 21.3 million purchases (45% of U.S. total)
Amazon = 5.7 million (12%)
Yahoo! Shopping = 2.5 million (5%)
Symantec = 1.2 million (2%)
QVC = 1.0 million (2%)
———————————-
Source: Nielsen//NetRatings MegaView Online Retail

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Banking Bill Payment Guarantees

By Jim Bruene Posted on
Categories: Bill payment, Citibank, Epayments, Service

Checkfree_logoWe believe a strong bill payment guarantee is crucial, not only to the credibility of your epayments program, but by implication, to your entire online banking offering. CheckFree has offered its logo up for years, but your customers want to know what YOU will do for them; most would prefer to know nothing about CheckFree.

And your guarantee needs to be visible to both online banking users and those just thinking about it. One of the best ways to increase visibility is by creating a "bill-pay guarantee" icon that users can click through to learn more about it.

Citi_billpay_logo_1 One of the better examples is at Citibank (inset) on its logon page. When you click on the logo, a small popup appears (click on the thumbnail below):

Citi_billpay_guarantee_1*

This guarantee has great copy, you can tell the marketing department was heavily involved. Rather than just reiterating the rather droll performance guarantee,* the bank also highlights several benefits:

  • No hidden charges, in other words, unlike "free checking," bill pay really is free
  • 24/7 service with "fast response"

*Citi’s bill-pay guarantee states that payments will be processed within 24-hours and delivered to payees according to the schedule, or the bank will pay for any fees incurred.

—JB

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Premium Banking Examples

By Jim Bruene Posted on
Categories: Premium-level Products, Pricing

1st_source_premium_bankingFor years, whenever we needed to show an example of product line segmentation, we’ve used 1st Source Bank’s Premium Online Banking, a $6/mo upgrade for users if its free online banking service.

Our most recent research uncovered several more examples:

American Savings Bank
Free: Online Banking
Free: Online Banking Plus
$5.85/mo: Online Banking Premium

North Shore Bank
Free: Epay
$5.95/mo: All Pay

We’ll be covering this subject in great detail as numerous premium online banking programs are launched during the next few years. For more information on multi-level pricing, refer to Online Banking Report #109, published in August 2004.

–JB

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Yahoo Pursues Small Businesses

By Jim Bruene Posted on
Categories: Advertising & Promotion, Small Business, Yahoo

Free_yahoo_website Did you see Yahoo’s full-page ad in today’s Wall Street Journal (or was it the New York Times)? Anyway, it was on the back page of one of the interior sections, and it declared:
                —–
A free website for every small business in America.

Now, everyone reading the paper knew it was a come-on; when you go to the Yahoo Local website they try to upsell you on the $9.95/mo premium version (click on the inset for details). Furthermore, the ad probably cost more than the sum total of "free" websites given away. I don’t know if it will pay off, but it certainly got my attention.

Financial Institution Opportunities
I got to thinking, what could a bank give away that wouldn’t sound too hokey or cost too much? The free website isn’t a bad idea, especially if you wrapped some ecommerce services around it, but Yahoo and many others have been doing that for years.

What about bill payment? If you were willing to open up your bill payment system to allow payments to originate from other banks, you could mimic the Yahoo ad in your market with:

A free online bill payment for every business in <yourtown>!
(exclamation point optional)

But a lot of banks already offer free bill payment, so try this on for size:

Free lifetime storage of your checks* for every business in <yourtown> *images of course

The creatives would have a blast with that one.

Finally, since those both have system implications, here’s something anyone could offer:

Free local online directory listing for every business in <yourtown>

To pull this off, you’d need to create a database (ideally) or an even an HTML page that lists the web and business addresses for every business in your market. Bank clients could be given premium listings/linkages. And you’d need to give the directory exposure with visible links off your website.

—JB

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Financial Data Archive Trends

By Jim Bruene Posted on
Categories: Deposits, Checking, Savings, CDs, Images & Online Archives

Now that Google has doubled the free online storage for its Gmail users* to 2GB, you’d think banks would get with the program. There’s value in storing them bits. However, you are still lucky to get a year’s worth of data, and many places provide just 3 or 6 months (probably about 50k of data, if that).

In May, Online Banking Report will publish a report on the state-of-the art in online archives at financial institutions. You can get a sneak peek at the notes we’ve compiled so far by downloading this file (23-page Word doc):

Download statement_archive_study_for_obr_119.doc

Of the 100 or so banks and credit unions we’ve looked at, most hold data for less than one year. Here are the storage champs according to a quick look at the data:

  • Transaction data: 2 years — tie between Charter One Bank and Commerce Bancshares (Kansas City)
  • Estatements: 3 years — Bank of America
  • Check images: 5 years (according to customer service, 7 years according to its website) — E*Trade

We’ll scrub the data, summarize it, and explain the implications and opportunities next month.

Also I am looking for commentary on the subject. If you’ve got a comment on the pros, cons, or business case for online archives, send me an email.

—JB

*Google Gmail is still in beta, if anyone needs an "invite" to open an account, just drop me a note.

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Synovate Reports Credit Card Direct Marketing Futility

By Jim Bruene Posted on
Categories: Advertising & Promotion, Credit/Debit Cards, Email Marketing, Metrics & Market Research

Card_solicitations_1

Synovate reported the results of their annual tracking study of U.S. credit card solicitations. Like the number of branches, the totals just keep growing, despite the inevitable decline in their effectiveness.

In 2004, the U.S. card issuers sent a record 5.25 billion solicitations, to about 75 million households (71% of all U.S. households). It averaged 5.7 offers per month, or 70 annually. And you don’t need a degree in economics to predict the results: record low response rate of 0.4%, down 2/3 from as recently as 6 years ago (1.2% response in 1998, see chart above).

Analysis
It’s almost surprising that the average household gets less than 6 card offers per month, we’ve gotten that many in a day. And no one here has responded to an offer since the last century. 

But I digress. The point is that financial services marketing departments all over the country are looking for cost-effective alternatives. If you figure traditional DM costs $1 per piece when you load in all costs, the acquisition cost has increased from $80/acct in 1998 to $250/acct in 2004. 

And thanks to the spam overload and phishing hype, it doesn’t seem like email will be the answer anytime soon.

What’s left? It’s that captive audience called online bankers. Here is a group of customers you know extremely well, thanks to tracking their bill pay activity, and that come to you several times a week on average. Grab some of that DM budget this year and show what kind of sales you can deliver. 

—JB

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First Brochure Focused on a Single Online Banking Feature

By Jim Bruene Posted on
Categories: Epayments, Personal Financial Management, Wells Fargo

Wells_fargo_my_spending_reportTen years after becoming the first bank in the world to post customer statement data on a website, Wells Fargo’s in-branch collateral shows just how far the online banking industry has matured.

Instead of putting a generic online banking brochure in the branch, which would hardly get a second look these days, at least in our Seattle neighborhood, the bank has created an entire take-one brochure showcasing its innovate new feature My Spending Report that we looked at Feb. 17.

The My Spending Report brochure is a statement-stuffer sized 4-panel, 4-color creation printed 2/05 and entitled:

Look at your finances in a new way.

Also on the cover:

Introducing My Spending Report, exclusively from Wells Fargo.   

Inside, the left panel explains the spending report and cross sells credit and debit cards with an umbrella program called, The SmartSpender Plan, which includes:

  • My Spending Report
  • WellsProtect fraud protection
  • Wells Fargo Rewards on select card accounts

The right panel shows a screenshot of the report depicting checking, debit card, credit card, and bill payment activity.

Update on Website slacking
In February, we were critical of the bank for announcing a new feature that had no visibility on its website. That has been corrected. Now the first result for a a search for "My Spending Report" links users to this explanatory page.   

— JB

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Wells Fargo’s Remote Deposit Capture

By Jim Bruene Posted on
Categories: Deposits, Checking, Savings, CDs, Remote Deposit Capture, Wells Fargo

Last year, NetBank was one of the first banks to talk about allowing business customers to deposit checks directly via scanner, so called remote image capture or remote deposit capture.   

Bony_remote_depositNetBank has yet to go live, but several others have including: First Tennessee (the first to go live in March 2004), Bank of New York (announced 08 Nov 2004, see inset), HSBC (announced 08 Nov 2004), Wachovia (announced 13 Dec 2004), BB&T (announced 10 March 2005, live 01 April 2005).

Also, know to be implementing or testing: PNC, E*Trade Bank, Bank of America, LaSalle Bank, JPMorgan, BB&T, Mellon, Citibank, Key Bank, Zions, and Glenview State Bank (IL).

Now you can add Wells Fargo to that list.

Last week, the online banking pioneer announced its extremely well named remote deposit capture service, Desktop Deposit. The service allows businesses to scan checks into their PCs using a USB device from the bank. No word yet on pricing and availability.

Analysis
Remote deposit capture, either at the customer's PC or at a scanner-equipped ATM, has the potential to negate one of the branches last roles, check cashing. It could be especially appealing to small businesses who benefit from the obvious time savings (no more trip to the bank) and better cash flow (no stashing checks away until the weekly bank run).

But the more important benefit to businesses are the improved record keeping and easier resolution of billing disputes. Images of deposited items are available immediately online and can be easily searched, retrieved, and forwarded, should a question arise later. Finally, the business retains the original paper item for a back-up paper trail.

And given the large value to the business, banks should be able to increase checking account and/or online banking fees for remote-capture clients, thus profiting from a process that wrings paper checks out of the system.   

Resources:

 

— JB

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