Intrust Pays $6 Per GB for Online Archives

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

If you are wondering how much it might cost to enable long-term or lifetime archives for your customers, here’s a data point from an article in today’s American Banker about the pros and cons of pooling image archives with other banks.

Intrust_logoIntrust says that it’s latest 5-terabyte upgrade cost just $30,000. Doing the math, that’s $6 per gig for approximately 5000 gigabytes of storage. Here’s the exact quotation attributed to Jim Simon, Intrust’s VP of operations:

Last summer (Intrust) put its entire (image) archive online as a result of a five-terabyte storage system upgrade that cost just $30,000.

Analysis
At $6 per GB, storage space for online archives is already so inexpensive that it won’t be long (2 to 3 years) before real-time online access to 7+ years of image/statement history is the norm in banking; and by the end of the decade, we expect most financial institutions to offer lifetime archives.

So if you want to use lifetime archives as a point of differentiation, you better move fast. You only have a one- or two-year window before it’s just another me-too upgrade.

For more information:

—JB

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Honor System for Bank Remote Deposits

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

Psecu_upostFew innovations of the past five years can top Pennsylvania State Employees Credit Union’s (PSECU) Upost@Home service. Launched in late 2001, the service allows qualified members to enter deposit items online for instant credit to their account. Members then send the paper items to the CU through the mail for reconciliation.

The service was named an OBR Best of the Web winner in 2003 and earned the #23 spot on the OBR list of the Top 25 Innovations of All Time (see OBR 103).

Now the service is being marketed to other financial companies through PSECU’s CUSO affiliate, eCU Technologies. The service is already in place at Southland Civic Credit Union and Deere and Company Credit Union.

As part of the marketing effort, eCU has released updated metrics on the usage at PSECU and the estimated cost savings:

Total deposit sessions: 700,000
Total deposit dollars: $300 million
Deposits per session: $430
Total losses: $13,000
Losses as a percent of deposits: 0.4 basis points (0.00004)
Losses per deposit session: $0.02
Savings per deposit session (vs. teller or ATM): $1.14
Total program savings: $800,000

Action Item
Specific results from three credit unions along with program details will be discussed at a free Webinar May 23. We urge you to attend.

—JB

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Communicating through RSS/XML feeds

By Jim Bruene Posted on
Categories: RSS, Service

Looking for an alternative to email for marketing and service communications?

Bank_of_montreal_newsfeedAs more users subscribe to RSS (Rich Site Summary or Really Simple Syndication) or XML feeds to automate the process of reading online news, blogs, and other information, they will expect their financial institution to support this communications technique.

Bmo_xmlfeeds_allThe only bank XML feed we’ve seen so far is Bank of Montreal, which publishes its Online Banking News as an XML feed. Bank of Montreal has published 15 items since the feed became available in early March, including interest rate changes, usage tips, and security warnings (click on the thumbnail left to see all 15 items published).

The bank pubicizes the feed on its online banking login page (see inset right). Bmo_feeds_link

Analysis
According to the Pew Internet Project, only six million U.S. users were receiving RSS feeds in November, 2004, approximately 5% of total Internet users. Even if that number has doubled by now, it still a small minority of users.

However, now that Firefox and Apple’s Safari browser contain built-in RSS readers, it’s only a matter of time before Internet Explorer supports this feature. IE users can still use RSS feeds, but they must download a toolbar add-in such as Feed Scout (www.bytescout.com), use an aggregation site such as BlogLines (www.bloglines.com), or download a standalone newsreader such as Feed Demon (www.download.com). 

Once newsreaders become incorporated in most browsers, we expect usage to skyrocket. Most ecommerce players are expected to published feeds to support customer service and sales. For example, Amazon already offers XML feeds in more than 100 categories, updating users on new items in everything from mystery books, to hip-hop CDs, and action-figure toys.

Banks looking to project a modern image might as well get ahead of the curve and start sending service messages via XML feeds in 2005. It’s a good way to get information out to users who no longer receive or trust your email messages. Producing an XML feed is a relatively inexpensive project with little downside. If resources are too tight, make sure you add it to your 2006 plan.

For more information:
Wikipedia definition
Walt Mossberg’s Personal Technology column (5/5/05 Wall Street Journal)

—JB

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ING Direct and the Internet-only Banking Redux

By Jim Bruene Posted on
Categories: Deposits, Checking, Savings, CDs, Direct Banking, ING Direct

Ing_on_bankrate_1During the height of the bubble, there were dozens, perhaps hundreds of banks secretly planning to launch Internet-oriented brands. But the strategy fell out of favor with the very public downfall of WingspanBank, which lost funding during a corporate restructuring at Bank One; followed by the collapse of NextCard, which went belly-up after a ill-advised bet on sub-prime credit.

But despite these public failures, there was never anything wrong with the underlying strategy. Quite the opposite. Direct banking has been a viable business model ever since deposit deregulation in the 1970s. The Internet only makes it easier to reach and serve customers.

Case-in-point: ING Direct, still not five years old in the United States, has amassed 2.5 million accounts holding $29 billion in deposits at year-end 2004, making it the 30th largest financial institution in the United States. If they continue to grow at the same pace, they should be close to cracking the top-20 by this time next year. Their laser sharp focus on savings accounts, trendy branding, and consistent high rates has put them on the map.

This success has not gone unnoticed around the country. They are frequently discussed at industry gatherings and internal planning meetings. However, you aren’t likely to see many of its more traditional competitors jumping on the high-deposit bandwagon. It doesn’t make sense for them to alienate their customers and branch employees by offering higher rates online. And they are not about to reprice their entire deposit base to compete with ING Direct and the other high-rate institutions.

Emigrant_direct_on_bankrateHowever, I think you will see smaller banks look to the Internet for growth using new brands or brand extensions. In perhaps the most aggressive launch since ING Direct in 2000/2001, Emigrant Savings practically owns the deposit real estate at BankRate.com. In a recent visit, the bank’s Emigrant Direct brand not only had the top banner, they also bought the skyscraper on the left-hand side, effectively "framing" the entire content screen (click in the inset for a better look).

Note to ING Direct, check your skyscraper ad at BankRate.com (see above). Emigrant Direct has hung a small ad on the bottom of your banner that looks like part of your ad. I hope you are at least getting a discount from BankRate.com. 

—JB

If you’d like to learn more about the future of online banking include internet-only, 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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Getting Online Banking Users to NOTICE Your Homepage

By Jim Bruene Posted on
Categories: Website Usability & Design

Online banking users often visit their primary bank’s website several times each week. Outside of webmail and chat services, few companies have this much traffic from their customers.

However, most online banking customers only touch down on the homepage for the briefest of moments; typing in a username and password then moving on. The challenge is to get them to notice your marketing and service messages.

One possible way to move those logging in eyeballs off the username/password corner, is to post easily-scannable, interesting, and ever changing information in a different area of the homepage, enticing the eyeballs to wander. In the banking world, there are few content choices available that fits this criteria.

Weather information.

Time_tempThe time/weather sign in front of the bank branch used to be, and still is in some places, a common sight on main street.

Why not take that same approach online? Place a personalized weather "sign" some distance from your login area. If you have the capability to move content elements around, test different locations and see which cause the most click-throughs on other sales and service elements.

Analysis
Thankfully, most banks have retreated from the idea of becoming a news and information portal. It’s just not possible to compete with CNN.com, Yahoo Finance, and others in disseminating news and investment info.

However, weather is another matter. Almost everyone is interested in the subject matter; it takes only a few seconds to absorb, so it’s not distracting; it’s dirt cheap to post on your website; it changes constantly; and it can be easily personalized to the user’s zip code.

Apple_weatherAlthough it still carries negative connotations as an example of bubble-induced folly (e.g., at Net.Finance this week, a Wells Fargo exec told how in 2000, the bank was actually seeking suppliers for "horoscopes and weather info."), the latest upgrades to Apple’s OS X, Tiger, include a cool dashboard, which includes among other things, a weather display (see inset).

For more information, see OBR 85.

— JB

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Financial Search Engine Marketing Conversion Rates

By Jim Bruene Posted on
Categories: Advertising & Promotion, Search Engine Marketing, Yahoo

Yahoosearchmarketing_logoDisappointed in your conversion rates on prospects attracted to your site via search (paid or natural)? Compete and Yahoo Search Marketing (formerly Overture) released results of new research at the recent Net.Finance conference.

Compete_logoThe study looked at a pool of 75,700 searchers who conducted 250,000 financial information searches. Of that total, just 5,640, or 7.5%, ended up submitting an application for a financial product. Since they are often looking at more than one provider, your "expected" share would be less than 7.5%.

So if you are closing 5% or more of your visitors, you are hitting it out of the park. Even a 3 or 4% close rate is exceptional. On the other hand, if you are closing 2% or less, your creative and/or offer may be lacking.

—JB

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Online Bank and Mortgage Lead Generation

By Jim Bruene Posted on
Categories: Advertising & Promotion, Lead Generation, Sales Techniques

One subject that doesn’t get enough attention, online lead generation.

Now that most bank websites get more traffic than its branches, at least if you measure total number of visits*, you should be committing resources to maximizing the number of leads generated by your website.

Most banks have the low-hanging fruit covered with prominent phone numbers and website inquiry forms. But what about those prospects less willing to initiate a sales interaction?

Amerisave_logoMy favorite presentation from the recent Net.Finance conference, and one I almost didn’t attend because I thought it would be focused on offline activities, was Evaluating Online Lead Generation and Management, from Dave Herpers, Chief Marketing Officer at Amerisave, an online mortgage originator.

If you ever have a chance to hear him speak, I highly recommend it. Previously he was marketing director at DeepGreen Bank and also did a stint at Bank of America, so he has a great background in online lending.

Besides the fascinating discussion of the methodical generation and processing of online and telephone leads, he provided a number of ideas that financial services companies can use on their website to improve the number of leads available to sales people.

Action Items
As customers research products and use your online tools, allow them to have any of the results emailed to them for future reference. Customers like it because they don’t lose all the work they’ve done and it’s serves as a reminder as to where they found all the great info.

Mr. Herpers suggested the following email functions:

  • Email me the results from the mortgage/refi/HEQ calculator
  • Email me my estimated closing costs
  • Email me the rate info I was just looking at
  • Email me info on the products I was just looking at

Any customer who uses the email functionality becomes a valuable product lead.

Other lead generation opportunities:

  • Contact Me buttons
  • incomplete applications
  • Request a Consultation form
  • Rate Alerts

Amerisave_rate_searchAmerisave reports that there best leads, other than telephone calls which are always first priority, are those from customers preforming rate searches at its website (see inset).

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

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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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