Financial Data Archive Trends

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.


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

Synovate Reports Credit Card Direct Marketing Futility


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).

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. 


First Brochure Focused on a Single Online Banking Feature

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.   


Wells Fargo’s Remote Deposit Capture

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.

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.   




Billeo’s Business Model is B2B

We finally had a chance to talk to Billeo founder and CEO, Raj Lalwani. First last Thursday, then a followup demo today.

I am happy to report the CEO is as impressive as the software.

And it turns out their business model is more B2B than B2C. Billeo will be custom-designing toolbars for banks, credit card issuers, other ecommerce players, such as retailers, travel booking sites, and yes, even billers. They hope to announce a HUGE customer win in the next few weeks. 

We think this application has great promise

We will dissect the company in the next issue of Online Banking Report (available online approximately April 12).

Previous articles can be found here.


Everbank’s Foreign Currency Deposits

Everbank_logo_1Two-time Online Banking Report Best of Web winner, Everbank landed a flattering two-page spread in the April 2005 issue of Business 2.0.

The author, David Dent, is highly complementary of the bank’s innovative strategy of allowing deposits to be held in a variety of foreign currencies. Not only has it been lucrative for currency investors, it’s been a boon to the bank.

Everbank’s foreign-denominated deposits are closing in on US$1 billion. Specifically, at year-end 2004, foreign currency deposits accounted for $850 million, or 25% of the bank’s $3.5 billion in total deposits.

This is a good example of how a small player can mine a niche using the national reach of the Internet. Look for other banks, both Internet-only, and traditional financial institutions to do the same in other areas, such as lending to small businesses, transaction accounts geared to traveling sales reps, impenetrable savings accounts for the security conscious, and so on. 

Resources: OBR Best of Web winners: 1995 to 2004

— JB

Online Banking Helper Bubbles

Ebay_bubble_helper_1Here’s a little technique we haven’t seen before, helper bubbles that popup to highlight new and/or underutilized features.

For example, in My eBay, this yellow bubble appeared on the screen pointing to a relatively new feature on the site, a drop-down box that allows the user to take various actions on items they are tracking.

Note: eBay allows you to turn off the bubble with a "Don’t show me this again" link.

A great way to highlight important features of online banking.


Affinity Banking Online from Blackwell

Bankblackwell_logoBankBlackwell, a new Internet-only bank targeting African-Americans, began it’s roll-out today, with its first press release announcing OTS approval. The bank hope to launch this summer, provided they raise sufficient capital and pass regulatory muster.

CEO James Mundy and CIO Bruce Narison briefed me on the bank last fall, and they have impressive plans. We’ll keep you posted as they lift the veil on their online banking platform.

BankBlackwell is the latest of a string of Internet-oriented banks using affinity marketing techniques. The two most prolific are: National Interbank which runs a number of banks for professional membership organizations such as the American Medical Association and The Bancorp Bank which has private-labeled banks for 40 organizations.

Affinity marketing is a proven strategy in the financial services arena, enjoying great success during the past 15 in the credit card market. We think there’s a great future in affinity-based online banking. As consumers grow more confident of web-based financial entities, they will be more than happy to take a few moments to set up an account and transfer a few grand into a higher-yield situation.


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.

Update on Billeo Bill Payment Toolbar

Billeo_billboardSince our <a href="initial report on Billeo, we’ve been using the system to pay and view bills. It’s a new category of software we’ll call toolbar-ware.

The primary user interface is an toolbar located near the top of Internet Explorer. Many of the toolbar functions call-out web pages from the Billeo server, so as you use the program it ends up being a mix of website and toolbar functions. It’s actually a bit confusing for the new user.

Part of the reason it’s not as intuitive as the Google or eBay toolbar, is that the user must learn an entirely new approach to tracking their billing. Whereas, with eBay and Google, most toolbar users are already well-versed in the nuances of using those popular sites.

Billeo_adsWe’ve also discovered their business model, running Google-like ads that run on the right of the page as you use the program. Click on the screenshot above to see the entire page. See left for the advertising section only.

Currently the advertisers running on the Billeo Billboard are ING Direct, The Wall Street Journal, Quicken Loans, and Value Line. The advertisers all stayed the same during our testing.

Bottom line: It’s a great program, and we recommend banks consider developing a similar toolbar which also incorporates banking functions, or licensing this one from Billeo. We’ll be publishing a complete review of Billeo in OBR #116, published in mid-April.

For more information:


Editor’s Note: Billeo was named "OBR Best of the Web" in the second part of its series on E-Payments (OBR 119) published in June 2005. 

eBay Personalized Email Marketing

Ebay has been on the forefront of fighting online fraud, introducing Account Guard on its toolbar in Feb. 2004 (see Online Banking Report, #105/106 and #85), as well as a number of safeguards into its service delivery over the years.

Ebay_personalilzed_email_4The auction giant recently elevated the personalization in its emails, incorporating name and eBay username, in an effort to help users recognize genuine messages.


View closeup of personalization


If you’d like to learn more about the future of financial email messaging, check out Email Marketing in Financial Services: Leveraging the Inbox from our sister publication, the Online Banking Report.

Charter One Bank Screws Up their Email Messaging

Charter_one_message I first wrote about the benefits of email alerts in the third issue of Online Banking Report nearly ten years ago (OBR 3, June 1995). Since then I’ve enjoyed watching the service unfold, and I’ve never met an alert I didn’t like — until this week.

An email messaging pioneer, Charter One Bank, with a suite of email/fax/voice alerts named OBR Best of the Web in 2003, laid an egg this week.

I’ve had an account there for years and have received seven or eight hundred daily mini-statements in that time. Surprisingly, those daily messages have remained absolutely the same. No advertising, no service messages, no cross-sales. Not even a holiday greeting.

Imagine my surprise when last week I received, in addition to my daily statement, a New Message Alert (click on screenshot above) that said in part:

On March 21 a new message was delivered to your Online Banking Message Center. Please click here to view this important message.

Surprisingly, it didn’t occur to me that this could be a phish (it wasn’t). I really was afraid something had gone terribly wrong with my account. I couldn’t remember my username or password and the "lost password" function returned an error message. So I had to wait until I was home where it was written down.

As I anxiously logged into my account, expecting the worst, I wondered how I would cover the check I’d just written off the account. The first thing I did was check my balance. Phew, it was what I expected, just enough to avoid monthly fees. Then I crossed my fingers and navigated to the secure message center where the all-important message waited.

Imagine my "customer experience" when I found that Charter One had sent me on this harrowing chase only to inform me that (click on screenshot below):

Effective April 10, 2005, Charter One Bank’s Online
Banking service will no longer process one-time or
recurring online transfers to or from a passbook
savings account.

Charter_one_message_center_1 Not only do I not have a passbook savings account, I have no other accounts beside checking, so I am ineligible to make any type of transfer on the system. What a terrible waste of my time.

Seven days later, I get yet another message insisting that I log back into the site for another "important message." This one wasn’t much better. The bank was alerting me to an upcoming bill payment service slowdown. Never mind that I had never sent a bill payment nor activated the service in more than two years of maintaining an account at Charter One.

Moral of the Story
As a consumer, after enduring two false alarms, I feel this way about the bank:

1. They do not know me as a customer.
2. They do not care if they waste my time.
3. They have no ability to send targeted email.
4. They lack a basic level of common sense.
5. They do not know how to communicate through email.

It would have been so easy to keep this from happening. The bank could have done any of the following:
a) Sent these message only to users of the specific accounts/functions
b) Assuming their system doesn’t allow (A), they could have sent the entire message to my Internet email address so I didn’t have to login to see it
c) Not sent the message at all to my Internet email and simply posted the message within the online banking area

The email relationship with your customer is powerful, yet extremely fragile. A few irrelevant "important information" messages, especially if a website login is required to access the message, can kill the entire channel.


Citibank’s Impressive Follow-up Sales Effort

Citi_free_ipodCitibank has woken my sick-in-bed wife the last two mornings, calling to remind me to submit my paperwork to fund the new checking account I established online two weeks ago.

She’s not so thrilled with the bank, but I’m impressed with its tenacity.

Here is the scorecard of bank followup efforts:

  • Email = 1 (about 2 weeks after application…almost missed it, thought it was a phish)
  • Mail = 1 (technically not a reminder, it was the sig card and new account kit)
  • Phone = 3 (first about 1 week after application, then number 2 and 3, about 2 weeks after application

It’s an impressive follow-up effort. I’ve applied for a number of accounts over the years and I can recall receiving only one telephone call, from Salem Five back in 1995, and that wasn’t even an application, just a sales lead. The last time I tried to start a checking account, with Washington Mutual, I never heard from them, not so much as a single email or letter thanking me for my application. As far as I know it’s still sitting in limbo on some backup tape.

Sorry for the delay Citibank, I really do want that iPod, so I will be sending my $2500 deposit ASAP.

Action Item
If a company with as much experience as Citibank has found it to be profitable to make follow-up phone calls on unfunded new accounts, you should consider doing it as well. However, you may have more luck than Citi does using email followups. Citibank’s brand in an email message is practically worthless these days after the pounding it’s received from phishers.