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Computer Security and ID Theft Tipping Point?

By Jim Bruene Posted on March 26, 2006
Categories: Identity Theft

It’s a long time since the public considered the phrase “computer security” to be an achievable state instead of the game it is: Forty announced data breaches since January 1, affecting banks, brokerages, schools, government offices and other institutions have taken care of that. And some of these breaches are dangerous to consumers and the payments industry, however the companies involved might try to spin the news, or keep it quiet. Consider, for instance, the March 8 event in which 17.8 million files supposedly stolen from Deerfield Beach, Fla.-based iBill Inc. were posted online. The files included names, phone numbers, addresses, e-mail addresses, Internet IP addresses, logins and passwords, credit card types and purchase amounts. iBill mainly handles payments for adult sites. The company says the stolen data wasn’t theirs, and, aside from a few blog entries, the incident pretty much escaped media notice. But the data, which was posted…

Wal-Mart Bank and Financial Protests Getting Serious

By Jim Bruene Posted on March 25, 2006
Categories: Wal-Mart

We note with some bemusement that Wal-Mart Stores Inc.’s application for a Utah industrial loan corporation charter is attracting predictable suspects, both for and against. WalMart’s plans have, of course, spread panic in the ranks of bankers large and small, which panic has reached sufficient pitch to prompt the FDIC to schedule hearings on the matter. Indeed, 40 members of Congress have signed a letter in opposition to WalMart’s application. (more…)

LoanTrust is Surprise Google Financial Advertiser

By Jim Bruene Posted on March 24, 2006
Categories: Loans & Credit, LoanTrust.org, Search Engine Marketing

The online loan-referral market must still be healthy. How else can you explain how an unknown company, providing not a single clue as to whom might run it, can afford to be within the top-three advertisers on Google searches today for "refinance" and "home equity." These search terms, each used millions of times each month (NetBanker Sep. 20, 2005), currently have three ads across the top of the Google search results. In both cases, previously unknown referral agent, LoanTrust.org, is a top sponsor. For "home equity," it's in the company of two well-known brands, Ditech and LendingTree (click on inset for a closeup). Clicking through the LoanTrust ad drops users onto a professional looking site that name-drops ING, Geico, and Equifax to build credibility (click on screenshot right for a closeup). But anyone peeking under the covers should be concerned about where their personal information will end up. For example,…

Paperless Checking Accounts

By Jim Bruene Posted on March 23, 2006
Categories: Deposits, Checking, Savings, CDs, ING Direct, Strategies

If the statute of limitations on "I told you so" is seven years, then word that ING Direct is contemplating a "checkless" checking account called e-Orange comes in just under the wire. Our Virtual Checking Accounts report, which outlined just such an account, was published six years and eight months ago (OBR 50/51) (see note 1). We've always enjoyed the ING Direct story because it defies conventional wisdom in so many ways. Here are the "rules" that the Dutch banking giant, thirteenth largest in the world, has broken: Branchless, Internet-only banks can't build a large deposit base Large entrenched financial institutions can't create a hip online brand Mass-market banks must offer checking accounts Worldwide, the ING Direct unit serves 15.7 million customers, and in 2005 it earned a profit of 617 million euros, about 9% of the parent's earnings. The U.S. version accounts for about 20% of the customer total, approximately…

Google Unveils New Finance and Investing Website

By Jim Bruene Posted on March 21, 2006
Categories: Google, Personal Financial Management, Search Engine Marketing

Google just staked its first claim in financial services, opening Google Finance <finance.google.com> today. It comes as no surprise that the search giant would look to grab a share of the considerable traffic to consumer finance sites (see chart below). Naturally, the Google effort is well designed and fast. The site uses interactive, Flash-based price charts, news feeds from Google news, and company and officer information from a number of sources. The site allows users to set up a personalized portfolio, and it links to blog postings and even to postings from Google's moderated forums (click on inset below for a closeup). The only surprise is the lack of advertising. Not only are there no banners or postage-stamp ads, but also no buried "sponsored links" to be found. We don't expect it to stay advertising free, but for now, it's a good place to refer customers to check stock quotes,…

Who’s Who

By Jim Bruene Posted on March 20, 2006
Categories: Uncategorized

New hires, retirements, and promotions at Bank of America, Marshall & Ilsley Corp., NOVA Information Systems, and Mall Networks. Tim Arnoult, Bank of America’s long-time Global Treasury Services executive, is retiring effective the end of April, and will be succeeded by Cathy Bessant, who’s been Global Marketing executive since 2002. Anne Finucane replaces Bessant. (Contact: Bank of America, 704-386-4343) Jeff Bussgang joined the board of Mall Networks, which recently closed a first funding round led by IDG Ventures Boston. Bussgang is a general partner at IDG Ventures. Mall Networks didn’t say how much money it raised in the round. (Contact: IDG Ventures, 617-534-1228; Mall Networks. 608-225-5476) Christopher S. Kenyon was named executive vice president and general manager of NOVA Information Systems’ First Horizon Merchant Services unit. Kenyon was previously First Horizon’s chief information officer. NOVA is wholly owned by US Bancorp. (Contact: NOVA Information Systems, 678-731-5064) Michael C. Smith was…

Two New Deals from First Data and TNS Inc.

By Jim Bruene Posted on March 20, 2006
Categories: Mergers & Acquisitions

Two new deals, from First Data and TNS Inc. First Data Corp.’s TeleCheck Services Inc. unit has bought ClearCheck Inc., which sells and services return check management systems, for an undisclosed sum. The ClearCheck business will become part of First Data’s Commercial Services division. (Contact: First Data, 713-331-7359) TNS Inc. was tendered a non-binding buy-out proposal on March 13, 2006, from a management group led by Chairman and Chief Executive John J. McDonnell Jr. at $22 a share in cash, or about $527 million. Capital IQ rates TNS’s enterprise value at $579 million. The company has formed a Special Committee of its Board of Directors to negotiate the deal, and hired Deutsche Bank Securities Inc. as its financial advisor. A class action suit was filed on March 13 against TNS and its directors trying to enjoin the deal on grounds that TNS’s directors violated their fiduciary duties in the deal.…

New Products and Services from American Express, Visa and More

By Jim Bruene Posted on March 20, 2006
Categories: Uncategorized

New products and services from American Express, First Data, Visa USA, and more. American Express Co. says that this year, the IRS will allow businesses to pay balances-due on their federal business taxes (Form 940, annual employment, and Form 941, quarterly employment business taxes) with an American Express Card. Businesses get double rewards from Delta Airlines and Starwood Hotels when they pay their taxes this way. (Contact American Express Co., 212-640-5503) Commerciant LP launched a new device it calls the Mobilescape 5000, a wireless handheld device that accepts and processes both checks and credit cards. (Contact: Commerciant LP, 713-725-5526) The Financial Services Technology Consortium says it’s completed setting interoperability standards for banks to adopt when they communicate about fraudulent checks. More information on the Check Security Features project is available at www.fstc.org. (Contact : Financial Services Technology Consortium, 781-235-3424) First Data International says it signed new card -rocessing contracts with…

Banking Continues to Become More Rewarding

By Jim Bruene Posted on March 20, 2006
Categories: National City, Rewards Programs

One thing about operating in competitive markets, when one player hits on a good idea, it's not long before others follow suit. It looks like National City <nationalcity.com> wins the honor of first-to-copy-Citi-Thankyou-Points. The Cleveland-based bank today unveiled its comprehensive Points program <nationalcity.com/points> with a multi-media barrage including television, print, billboard, and transit ads. Its website includes a large, animated points-gathering graphic in the upper right (see the series below). With rewards ranging from a $5 Starbucks card (2000 points) to cruises (420,000 points), there is something for everyone. The standard domestic round-trip air ticket runs 100,000 points. The program covers both personal and business accounts allowing, according to the company, a typical business owner to amass 140,000 points per year across both personal and business accounts. The program revolves around spending, paying two points per $1 spent on a National City credit, signature debit card, or line of…

Paper Checks Remain “Business as Usual”

By Jim Bruene Posted on March 16, 2006
Categories: Bank of America, Electronic Bill Payment & Presentment, JP Morgan Chase, Order-to-Pay Systems, Payment Cards, US Bank, Xign Corp.

When the last paper check is dropped in the mail, it will be a business check. All signs point to that day being over the horizon.Not that no efforts are afoot to squeeze business checks out of the payments system. At least a dozen companies around the world are trying to automate business payments with so-called order-to-pay software systems, including, in the U.S., Bottomline Technologies, Harbor Payments, and Xign Corp.. Various business payment card systems continue to emanate from the nation’s banks. And advocates of routing business payments through the automated clearinghouse have been working diligently at the task for years. But checks remain stubbornly alive: According to the Federal Reserve's landmark 2004 Payments Study, total check volumes between 2000 and 2003 only declined from 41.9 billion items to 36.7 billion items. And according to the US Census Bureau's 2005 Statistical Abstract of the United States, consumer payments made by…

Banking the MySpace Generation

By Jim Bruene Posted on March 16, 2006
Categories: MySpace, Strategies

There are 63,198,783 members in MySpace as of 9:45 am Pacific Time today. Even if you subtract 25 million or so phony entries, you still have a vast audience, making it the fifth-most popular place online (trailing only Yahoo, Microsoft, Google, and eBay). And it's not all teenagers. According to the member search, there are 1,054 male and 634 female members aged 45 to 50 within five miles of my Seattle home. Of course, in the same vicinity there are 2,958 22-year-old males and more than 3,000 females of the same age (search results stop after 3,000 hits), so it definitely skews younger. Financial institution opportunitiesForget about the over-30 crowd, you already understand what they need. But what about the younger group, the 21-and-over post-college crowd just starting jobs and beginning a 70+ year stretch of consuming financial services. What do they want in a bank? Ultimately, they want what…

Credit Report Marketers are Faster than Google!

By Jim Bruene Posted on March 15, 2006
Categories: Credit Reports & ID Theft Protection, Equifax, Experian, Search Engine Marketing, TransUnion

In thousands of searches using Google and other search engines, I've succeeded in stumping them a few times, receiving no results on my search expression. However, today I saw something I'd never witnessed before. A Google search for "VantageScore," the new joint credit score from Experian, TransUnion, and Equifax (NetBanker March 14) returned the following (click on the inset for a closeup): Zero mentions of the term Two ads placed against a search term that returned zero documents (click on inset for closeup). But I guess it had to happen: savvy credit report marketers are moving faster than Google's spider to lay claim to a new term. --JB