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Is it Time for Digital Banking Subscription Fees?

By Jim Bruene Posted on May 21, 2014
Categories: Fee Income, Pricing

Now that we are 30 years into the online banking era (and nearly 20 years of web banking), it’s time to start making the channel pay its way (or at least contribute something). Even though your customers might think otherwise, there is no rule that says all your online and mobile banking must be free of charge.

Yet, across 10,000 U.S. banks and credit unions, only a handful are still charging for digital value-adds (other than expedited and/or P2P payments). The biggest outliers (all previously covered):

Regions Bank’s variable mobile deposit fee dependent on speed of funds availability (post)
MyVirtualStrongbox (from DigitalMailer) deployed at 11 credit unions including Belvoir Credit Union; generally free, with optional fees for extra storage (post)
US Bank’s per-item $0.50 charge for remote deposits (post)
Mercantile Bank’s $4/mo consumer positive-pay service (post)

Please tweet new examples to @netbanker.

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Make Digital Banking a Profit Center
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Most digital innovations of the past 15 years have been justified with a combination of soft dollar benefits (aka intangibles) such as retention, customer satisfaction, competitive pressure, etc. Those are vitally important. But without profits/revenues, customer satisfaction is moot.

So let’s put an end to the “100% digital banking subsidy” and start charging something to those most likely to pay — your digital power users. If that segment coughed up an optional $3.95/mo for your Digital Gold account, you’d be earning a half-million dollars annually per 10,000 subscribers. That’s money that’ll come in real handy when the CFPB caps ODs at $15 each.

What type of services might be included in this “gold/platinum/VIP/premium” account? It depends on your brand and market, but these could be relatively cost effective:

Priority service (4-hour turnaround time)
Dedicated email/text message address
Expanded “Help” hours/availability
Expedited funds availability
Higher limits
Additional security assurances/alerts/monitoring
Lengthier statement/image archives
Free intra-family transfers
Special edition (different skin) mobile banking app
Random membership perks (local deals, 2-for-1 dining, etc.)

Check out more ideas in the Netbanker archives or refer to our annual planning report (subscription).

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Note: I run a variation of this topic every year or so, along with the occasional full report.

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FutureAdvisor Raises More than $15 Million; Seeks to Grow Team

By Julie Muhn (@julieschicktanz) Posted on May 21, 2014
Categories: FutureAdvisor, Lending Club

Add another $15.5 million to the amount of capital raised by alternative investment management service, FutureAdvisor.

The Series B investment takes the company’s total capital to more than $20 million. According to reporting at TechCrunch, the funding will help FutureAdvisor reach its goal of doubling its workforce to 40 by year’s end.

The round was led by Canvas Venture Fund’s Rebecca Lynn, and included participation by Sequoia Capital. Finovate Fun Fact: Rebecca is on the board of another Finovate alum, Lending Club.

FutureAdvisor sets itself apart from its peers with its promise to bring “premium investment management” to the masses. The company’s key differentiator, in addition to targeting a more upper middle class rather than “affluent” clientele, is that its technology is designed to help people best set up and manage their current IRA and/or 401(k) accounts.

What this approach may lack in scope – competitors focus more on creating new accounts rather than managing existing ones – it gains in practicality. With 401(k) plans alone representing 18% of the more than $19 trillion U.S. retirement market, there is plenty of opportunity for an investment management service with that kind of focus.

FutureAdvisor provides investment advice as well as rebalancing services. Without charge, investors can have their portfolios optimized using FutureAdvisors investing algorithms. For actual money management services, from monitoring and rebalancing to tax-loss harvesting, FutureAdvisor charges an annual management fee of 0.5%.

Founded in Seattle in May 2010 and now headquartered in San Francisco, FutureAdvisor has more than $110 million in assets under management. Bo Lu is CEO. The company demoed its Premium Service at FinovateFall 2013. See the demo here.

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Wallaby Financial Teams Up with CreditCards.com to Launch WalletUp

By Julie Muhn (@julieschicktanz) Posted on May 21, 2014
Categories: Wallaby Financial

Do you know which combination of credit cards is best for you? Wallaby wants to help.

Wallaby Financial has announced that it has partnered with CreditCards.com to provide a new service called WalletUp. WalletUp leverages Wallaby’s technology to identify what the company calls the “ideal mix of credit cards” to help consumers get better rewards and save money.

Using the app is pretty straightforward. Add your cards into the app, pick your preferences (airline miles, cashback, other rewards), and WalletUp does the rest: comparing your credit card “portfolio” to another mix that might better suit your needs.

A short FAQ accompanying the announcement anticipates the question of how WalletUp differs from Wallaby’s Wallet Boost. And, in short, the answer is CreditCards.com. As Wallaby notes, CreditCards.com has significant access to credit card offers and rewards made available, for example, as part of sign-up bonuses – which can then be part of the “ideal credit card mix” calculation. This gives WalletUp functionality that Wallet Boost does not have.

WalletUp is free and available from CreditCards.com. Check out the app for yourself here.

CreditCards.com is owned by the Bankrate Online Network, an online credit card market that boasts of more than one million unique web visitors each month.

Wallaby Financial was founded in August 2011, and is located in Pasadena, California. Co-founders Matthew Goldman and Todd Zino are CEO and CTO, respectively. The company demoed its Wallet Boost technology at FinovateSpring 2013. See the technology in action here.

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Finovate Alumni News– May 21, 2014

By David Penn Posted on May 21, 2014
Categories: Cortera, Credit Sesame, Expensify, Fiserv, FutureAdvisor, Heckyl Technologies, InComm, Ripple, Wallaby Financial

Expensify’s new mobile release now lets you use the Wingman feature on your phone.

InComm launches mobile platform for mobile wallet providers and merchants.

Heckyl opens for business in London.

Cortera launches new receivables management tool, Cortera Open Receivables.

Pymnts.com interviews Chris Larsen on how Ripple Labs simplifies B2B payments.

Wallaby Financial teams up with CreditCards.com to launch WalletUp.

FutureAdvisor raises more than $15 million; seeks to grow team.

Fiserv to participate in University of Connecticut Business School’s Financial Accelerator Program.

Credit Sesame earns spot on the 2014 Red Herring Top 100 Most Promising Companies list for North America.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

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FinovateSpring: Behind the Scenes with Tactile Finance, Visible Equity, and Vorstack

By Julie Muhn (@julieschicktanz) Posted on May 20, 2014
Categories: Tactile Finance, Visible Equity, Vorstack

In our third FinovateSpring Behind the Scenes feature, we’re taking a look at three companies that demonstrated for the first time on the Finovate stage. We sat down with Tactile Finance, Visible Equity, and Vorstack to capture more information about their solutions.

If you missed our first and second Behind the Scenes features, you can check them out here:

Tactile Finance

What they do

Tactile Finance’s Tacfi makes the mortgage process easy to understand and more transparent for borrowers. It helps the borrower navigate mortgage options and connect with lenders.

Stats

Launched in April 2014 at FinovateSpring
Tacfi’s target user is any home buyer, whose average age is 35 to 40 years old

The experience

To sign up for Tacfi, users only need to provide their name, email address, and create a password.

They start by entering details of the home they’re interested in, such as the home price, property taxes, and other monthly expenses such as condo fees.

The calculator shows users what their mortgage payments will look like over time.

From here, users can save the information about their loan, have the option to determine the amount of the home loan for which they are eligible, or can proceed to get a real quote from a lender, based on the information they entered into the mortgage calculator.

Visible Equity

What they do
Visible Equity helps financial institutions determine their compliance with fair lending laws, which apply to all parts of the lending process including pre-application, underwriting, loan pricing, post closing activities, and modifications.

With the click of a button, its software can detect unfair and biased lending practices, which can often times lead to fines, degraded ratings, lawsuits, and negative impact on the brand. Visible Equity gives institutions a way to mathematically prove that their lending practices are in compliance.

Stats

Serves 300+ clients
Analyzes over $120B in loans daily

The experience

Occasionally, financial institutions have lending policies in place that result in unintentional bias against certain groups such as age, race, gender, geographical location, etc.

The screenshot below shows a loan pricing discrimination analysis that has been generated to determine discrimination against race. The table shows loan count by race and breaks down the interest rate to show the difference between the actual rate and the expected interest rate.

Lenders can view all outstanding loans and are able to sort by loan attributes.

Visible Equity’s responsive design web platform can be optimized for viewing on a tablet or mobile device, so lenders have a portable way to view and share metrics, data, and charts.

Vorstack

What they do
Vorstack is a cyber defense platform that helps online security professionals more efficiently target fraud. Its system helps them deal with the massive volume of emails they receive by automating reports based on the fraud in question.

Additionally, the open-source nature of Vorstack’s platform enables sharing of details under certain parameters with a trusted circle of other security professionals. Using this collective intelligence, Vorstack helps target fraud more quickly and efficiently.

Stats

Raised $5.2 million in Series A funding
15 employees
Launched for financial services at FinovateSpring 2014

The experience

Security breaches, such as the recent ones reported by popular retailers, not only impact end consumers, they also take a toll on security professionals. Shortly after such breaches, security reps at banks can be inundated with emails asking if the institution should be concerned, and what areas are impacted.

The Vorstack platform functions as the graphic depicts below. Information is gathered, organized, analyzed, then is returned to the user, outlining potential areas of fraud concerns.

The screenshot below shows the dashboard where the security professional can view a break down of the number of fraudulent events they should be concerned with. It combines data from multiple organizations in order to give visibility of potential fraudulent activity before it happens.

The Events section of the platform enables the security professional to take a closer look at both global and local events on an individual basis.

We’ll continue featuring more companies behind the scenes in the coming weeks so stay tuned.

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Finovate Alumni News– May 20, 2014

By David Penn Posted on May 20, 2014
Categories: FinovateSpring 2014, Jumio, Linkable Networks, PayPal, Thomson Reuters

MyBankTracker looks at PayPal’s new design.

Linkable Networks unveils multiple omni channel SKU-level card-linked offer solutions to support all retailer types and sizes.

European Bitcoin exchange Safello to integrate Jumio’s identity document verification technology.

Thomson Reuters announces enhancements, upgrades to Accelus Risk Manager.

FinovateSpring 2014: Lights! Camera! Demo Videos! See all 67 presentations from our San Jose conference.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

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Best of the Web: Frost Bank Launches Actionable Two-Way Debit Card Alerts

By Jim Bruene Posted on May 19, 2014
Categories: Alerts & Messaging, Best of the Web

Frost Bank is cool. The $25 billion regional bank has long been an innovator, pushing forward on multiple digital fronts (see notes 1, 2). Its latest innovation quietly rolled out to customers at the beginning of May, is the two-way actionable debit card alert. This service probably seems like a no-brainer to customers, especially those born after 1990, but it’s not at all easy for an FI to pull off.

While Frost is not the first to position alerts as a two-way communication channel (note 3), it is the first to allow customers to simply reply back to a text message to freeze their debit card against further charges. The action also triggers a call from a Frost banker to resolve the situation.

Because this “raises the bar” for proactive customer communications around debit card use, we are awarding it our first Best of the Web for 2014 (note 4).

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How it works now (v1.0)
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1. Consumer establishes alert thresholds and preferences (inset)
2. Bank sends triggered text-message alert
3. If the user suspects fraud, they reply back with the code provided in the alert (screenshot below)
4. Frost puts a temporary hold on the card
5. Frost banker calls customer and resolves (customer can also unblock account on their own)

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What’s next (v2.0)
___________________________________

Frost Bank’s new feature is a great customer-centric solution that reinforces the bank’s position of consumer advocacy. It’s a perfect first step to a more proactive fraud-warning system.

But I do have some concerns there will be too many false alarms generated. It is so easy to forget pre-authorized debits; be surprised by charges made by your spouse; or legitimate, but strange-sounding merchant names.

Ideally, there would be a way to first ask for more info on a charge, rather than a black or white hold. It would be great to text back “huh?” and get a plain language explanation of the charge, for example:

This charge was made at 1:00 PM at the Subway near Northgate Mall. Are you sure you or someone in your family didn’t buy lunch there this weekend?

You began paying $9.95 per month to this merchant in February. This merchant markets a subscription music service. Did you, or anyone else in your family, start a subscription to it in the February timeframe?

BillGuard offers quite a bit of this “explanation layer” on card transactions, another reason to be looking at what they are doing (most recent post).

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Frost Bank’s debit alerts landing page (18 May 2014, link)

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Notes:
1. We first covered Frost in 2005, when it was offering lifetime statement archives at a time when most banks dropped your data off the site after a few months (June 2005 post). We also loved their PFM-ish Momentum checking account launched in 2008, about the same time as Mint launched (July 2008 post).
2. Earlier this month, Jeffry Pilcher called Frost Bank “… one of the most beautiful brand identities … .” (see right, post)
3. In 2010 (post), Chase Bank won Best of the Web for its 2-way text-message alerts; however, that was limited to initiating funds transfers through its normal text-banking service.
4. This is the first OBR Best of the Web for Frost Bank. Since 1997, our Online Banking Report industr
y newsletter has been periodically giving OBR Best of the Web awards to companies that pioneer new online- or mobile-banking features. It is not an endorsement of the company or product, just recognition for what we believe is an important industry development. In total, 91 companies have won the award. Recent winners are profiled in the Netbanker archives.

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FinovateSpring 2014: Lights! Camera! Demo Videos!

By David Penn Posted on May 19, 2014
Categories: Best of Show, EyeVerify, FinovateSpring 2014, Interactions, Loop, Motif Investing, Ondot, PrivatBank, SaveUp, Stockpile

The demo videos from FinovateSpring 2014 are now available in our Video Archive. Check them out here.

Here’s your chance to relive FinovateSpring 2014 in its new home in what was a very sunny San Jose. Every single video from the two-day event is here, arranged alphabetically from Artivest to Zumigo.

You’ll see and hear every presenter, every screen capture, every device display (from mobile payment fobs to smart watches and Google Glass), and every innovation that our 67 presenting companies had to share.

And if you’ll be checking out our presenters for the first time, then sit back and enjoy our unique, demo-only format in action.

This is also a great opportunity to see (or see again) just what it took to win the hearts and minds of our audience of more than 1,200 fintech professionals who voted for Best of Show. As a reminder, our FinovateSpring 2014 Best of Show winners are below. Click on the company logo to see the award-winning demo.

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Dashlane Raises $22 Million; Announces 2 Million Users; $1 Billion in Transactions Enabled

By David Penn Posted on May 19, 2014
Categories: Dashlane

Starting the week’s fintech news with a bang is password management innovator, Dashlane. The company, which was recently highlighted by the Wall Street Journal’s Personal Technology column as “the best way to manage online passwords,” announced that it had raised $22 million in funding.

The major infusion of capital represents the company’s biggest single investment to date, and takes the company’s total funding to $30 million.

For the most part, the new investment comes courtesy of a new investor, Bessemer Venture Partners, who led the Series B round along with current investors, FirstMark Capital, Rho Ventures, and Dashlane co-founder Bernard Liautaud. Dashlane reportedly will use the capital to bring on more talent and to explore other product possibilities related to identity management and payments, as well as to assist in expansion into both Latin America and Asia.

Available on both PC and Mac, as well as on iOS and Android, Dashlane’s technology is renowned for its ability to help consumers store and manage passwords. Additionally, Dashlane also enables secure storage of credit card and ID information, provides automatic password generation, tools to test password strength, smart autofill, and alerts to let users know of possible security breaches to their online accounts.

Said Emmanuel Schalit, Dashlane CEO:

“Hundreds of millions of web users still manually register, login, and checkout on desktops and mobile devices, and leave themselves vulnerable to online security threats in the process. Dashlane elegantly solves this problem for consumers.”

As noted in Mashable’s report of the Dashlane funding, the company saw a surge of interest in its soutions shortly after the panic over the Heartbleed bug broke out earlier this year. Emmanuel said that although there was a spike in interest (and one that has “died down”), the company continues its rapid growth.

And as a testament to this growth, Dashlane also has announced that it has surpassed 2 million users of its platform, enabling more than $1 billion in transactions.

Founded in 2009 and based in New York City, Dashlane demoed the instant login and checkout features of its technology at FinovateFall 2012. See a video of the company’s presentation here.

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Finovate Alumni News– May 19, 2014

By David Penn Posted on May 19, 2014
Categories: Dashlane, Fiserv, Geezeo, Kony Solutions, MasterCard

Geezeo announces HTML5-inspired redesign of mobile PFM app.

Dashlane raises $22 million; announces 2 million users, $1 billion in transactions enabled.

Raymond James Bank N.A. chooses Fiserv for extensive enterprise banking.

MasterCard to acquire Indian payments processor, ElectraCard Services, for undisclosed amount.

Kony releases new Mobile Backend-as-a-Service
(MBaaS) to reduce the cost and complexity of building enterprise mobile apps.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

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Geezeo Announces HTML5-Inspired Redesign of Mobile PFM App

By David Penn Posted on May 16, 2014
Categories: Geezeo

“In with the new” for fans of Geezeo’s personal finance management solutions.

The company announced today that it has leveraged HTML5 to redesign its mobile PFM app. The new design ensures that the company’s white-label PFM solution remains simple and easy to navigate, as well as being optimized for both iPhone and Android.

In addition to the redesign, the mobile PFM app now comes with Rapid Tagger. This feature allows users to tag transactions, gamifying the process of managing money, helping instill positive financial habits, and creating higher user engagement with the technology.

Integration into existing mobile banking platforms is one of the factors that sets Geezeo apart from its PFM peers. Said Geezeo CEO, Shawn Ward, “just like online banking, we strongly believe that PFM needs to be integrated into the existing mobile banking platform.”

“We offer clients flexibility because we can handle the product build or a client can roll their own.”

This approach has helped Geezeo win over a number of credit unions in the past year. We reported on an agreement with GRANCO FCU in January, deals with West – Aircomm FCU and Apex Community FCU last December, and new relationships with three different credit unions last fall.

Some of the features of Geezeo’s mobile PFM app are:

Cash flow calendar
Budgeted spending targets
Savings goals
Net worth tracker
Custom alerts
Account aggregation
Transaction tagging/categorization

Geezeo was last on the Finovate stage in 2010, demoing its Enterprise Marketing Platform as part of the Fall conference in New York. See video of the presentation here.

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Finovate Alumni News– May 16, 2014

By Julie Muhn (@julieschicktanz) Posted on May 16, 2014
Categories: BodeTree, Intuit, Jumio, MiiCard, PayPal, SocietyOne, Swipely, Temenos

Google Play Store now accepting PayPal.

Intuit buys Invitco to help bookkeepers put bill processing in the cloud.

SocietyOne, an Australian peer-to-peer lender, mulls entering NZ market, is talking with ‘multiple parties’.

miiCard graduates from SixThirty accelerator.

Swipely tops $2 billion in annual sales managed; launches Summer ’14 release.

Bermuda Commercial Bank picks the T24 core banking system, Model Bank, from Temenos.

Pymnts.com interviews Ingrid Pinheiro of Jumio.

FinSMEs talks about BodeTree with CEO and co-founder Chris Myers.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

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