Mobile: Going All-in with PFM in Mobile Banking

becu_mx_mobileThe ongoing migration to mobile provides financial institutions a chance to reboot their approach to delivering information digitally. Digital banking v1.0 (desktop online banking) was primarily about porting paper-based statements into an online format. It was a huge change and made banking more convenient, though not really any more effective than the paper-and-call-center system it replaced.

Digital banking v2.0 (mobile banking) is where modern processing power and machine intelligence pays off. Banking becomes not only more convenient, but much simpler, less time consuming, and helps consumers make better financial decisions. But to get to those payoffs, FIs need to provide advanced features, that we in the industry call PFM (personal financial management).

But it’s hard to transition entrenched desktop-banking users to the more powerful PFM platforms. Many customers have been happily using desktop-online banking for a decade or more. And it’s a painful process to move them into what looks initially like a more complicated system.

So some FIs are gently pushing users into the future by offering ONLY a PFM-based native app. The largest U.S. financial institution to use that approach is Seattle-based BECU, the fourth largest credit union in the nation, with nearly 1 million members and 350,000 using mobile banking (up 75% in the past year).

A year ago, the credit union replaced its simple mobile-banking app with a fully PFM-integrated version powered by MX (see them at FinovateFall next week). CU members using native apps (Apple, Android, Windows) now do all their banking through a full PFM interface.

becu_mob_money_homeIt’s a good long-term move. Users expect, and need, more functionality than simple balance lookup and funds transfer. But making such a big change all at once carries risks too. With more than 200,000 users at conversion time, there ensued some initial member grumbling, inevitable with such a big change. But the latest version released in May 2016 carries the highest 5-star rating, so apparently users have come to grips with the change. You can see the reviews in the iTunes and Google Play stores. Check out the MX case study for more details.

The full-conversion approach used by BECU may be the fastest way to move customers into the future. But to minimize initial pushback and work out any UX hiccups, grandfathering the old app could provide some breathing room. Or call the new version “Pro,” charge $1.50/mo for it (waived for a few months), and let both versions live side by side indefinitely. TD Bank in Canada offers the Moven-powered MySpend app as an add-in to its regular mobile banking app (see Moven at FinovateFall next week).

Alternatively, users turned off by a the full-featured app can be referred to the mobile website with instructions on how to save it as an icon on their phone. As long as you have a reasonably responsive, well-designed site, non-power user customers will be satisfied.

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The BECU Money Manager has a start page (inset) that includes links to a tour, FAQs, new member application, online banking enrollment (required for mobile banking), location finder, and a link to the full mobile website.

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Here’s a 3-minute MX-produced video of BECU exec Howie Wu discussing the desktop PFM platform and integration:

BECU on MX

Boeing Employees Credit Union (BECU) Pitches 7.50% APR Savings/Checking Account

One of my favorite Sunday pastimes is seeing which bank dropped $25,000+ on a front-section full-page Seattle Times print ad. Over the years, there have been fewer and fewer sightings. And usually, it's BofA, Key Bank, or US Bank making the bold print buys in our market.

But today, Boeing Employees Credit Union, or BECU as they refer to themselves now that they allow anyone in the state to join, bought the entire page A10 and used most of it to say:

Shouldn't you profit from your bank rather than the other way around?

Bottom 1/3 of BECU print ad in Sunday Seattle Times 1 April 2007That's an attention-grabbing headline, especially in Seattle with plenty of anti-big-business sentiment. But it won't drive sales unless the CU can back it up with tangible benefits. And it does, with a large reverse-type rate offer for Member Advantage Savings & Checking (bottom section of print ad at right):

7.50% APY on your first $500  

Analysis
This is a great approach for going after mainstream consumers. Why?

  • They bash the banks to gain attention, always a popular strategy…even the banks do it (see here).
  • They don't waste space, or risk customer confusion, by going into detail about their credit union status; in fact they don't even use the words credit union, other than the CU in their name, instead using the generic "bank" in the headline. 
  • They pay 2%+ more on savings than even the highest-rate online bank…but it's only on the first $500. Now that won't bring in the $25,000 deposits, but it will bring in new checking accounts and relationships.
  • The extra 6% BECU pays out on the $500 balance, only costs them $30 per year…a small price to pay for a new relationship, which requires an electronic connection, either direct deposit, online bill pay, or electronic statements (of course, the Seattle Times ad drives the acquisition price up considerably).
  • The same headshot of "Cyrena S." runs in the lower-left of the print ad and in the middle of BECU's homepage (see screenshot below), nicely tying the website to the print-ad strategy.

BECU homepage with 7.50% Member Advantage pitch

A few areas could be improved, mostly within the Web portion of the call to action: 

  • The online signup option is buried at the bottom of the Member Advantage landing page (here), and uses a generic link and understated small maroon button, rather than the large red/orange "Apply Now" graphic used by most retail financial institutions. 
  • The online app appears in a small popup window and is an old school all-text version powered by uMonitor. If you want to drive online sales, the application should be more user friendly and graphic-rich. Despite the shortcomings of CashEdge's online application design (see here), its layout is easier to follow. 
  • The go-to rate after the first $500 is just 1.75%; that's a bit less than one would expect from someone spending so much money pitching "earn more" in 48-point type.
  • Although BECU appears as the top organic result in Google searches involving the credit union's actual name, it doesn't show up on the first page for generic searches for "seattle savings accounts" or even "seattle credit unions." BECU should consider supporting its print buy with search engine advertising.  
  • The 7.50% advertised APY is identical to the 7.50% APR used by US Bank to promote its home equity product a few pages earlier in the same Sunday Seattle Times section. It might help to show a competitive comparison against other savings rates to emphasize that this is a fantastic DEPOSIT rate, not merely a competitive lending rate.