Numbers: Remote Deposit Penetration at Randolph-Brooks FCU

image In an article in today’s Austin Business Journal about the coming launch of mShift-powered mobile remote deposit at Randolph-Brooks Federal Credit Union, the CU revealed its penetration number in its EasCorp-powered, home-scanner-based service, eDeposits:

Total members: 300,000
Total checking account customers: 202,000
% of checking using remote deposit: 5%
Number of remote deposit users: 10,000 (derived)
% of members using remote deposit: 3+% (derived)

The San Antonio, TX-based credit union expects more mobile users than in-home users. The product, which debuted at Finovate on Sep. 29, is currently being tested with employees before it rolls out to select customers.

imageUSAA was the first major financial institution to launch mobile remote deposits in August.  But WV United beat them to market in July earning our OBR Best in the Web award. And this week, speaking at BAI Retail Delivery, Bank of America’s Doug Brown was bullish on the feature, leading many to believe that the giant would add the feature to its mobile offering at some point (see note). And if that happens, it’s not inconceivable the feature could show up in television commercials, either from BofA or Apple.

Note:
1. In response to an audience question after his presentation, Brown said that the bank was seeing 1 million envelope-free deposits made at ATMs every day, and “there was an obvious use-case in mobile”. Note that he did not specifically say, or even directly imply, that BofA would launch it, but he also didn’t dismiss the idea. 

Best of Web: Vantage Credit Union is First to Tap Twitter for Transactional Banking

imageIn 2006, we predicted that every major bank and credit union would someday have a blog (note 1). That prediction was looking downright awful until Twitter came along. The popular, and much-hyped service, is part blog, part social network, and part text-messaging.

Financial institutions have embraced Twitter much faster than blogging because it’s low cost, drop-dead simple to implement, and relatively cost-effective to staff and manage. Our good friend, Christophe Langlois, who has been tracking social media implementations at Visible-Banking for several years, has identified 120 financial institution blogs worldwide. In comparison, Christophe is tracking more than 700 Twitter accounts. Similarly, Jeffry Pilcher’s exhaustive Twitter directory at The Financial Brand lists about 600 Twitter accounts in use by financial institutions.

Vantage CU takes the Twitter plunge
image Although Twitter can successfully be used as a simple one-way broadcast medium (i.e., microblog), it’s also a powerful two-way and group communication service (note 2). Wesabe, in 2008, and Xpenser, earlier this year, were the first online PFMs to leverage Twitter for posting transaction info to user accounts. But St. Louis, Missouri-based Vantage Credit Union took that one step further by allowing users not only to query their accounts, but also to move money between them.

At the core, Vantage CU’s Twitter service is little different than hundreds of SMS/text-message mobile-banking services already in use around the world. But for Twitter users, it allows account queries from anywhere a Twitter client is loaded: smartphone, laptop, or desktop (note 3).   

How it works
image Vantage CU posted videos showing how it works. But if you are a Twitter user, you can skip the tutorial. You’ll understand right away: After signing up for the service at Vantage (inset), simply follow the CU on Twitter (@myvcu) and send them a direct message whenever you want to see your balance, recent transactions, or to initiate a funds transfer.

While the process is relatively intuitive for Twitter users, the command-code language limits the usefulness. The results look like a throwback to the DOS command line circa 1985 (see first screenshot below). It would be much simpler if the CU offered plain English commands and account nicknames, e.g., “transfer $500 from wifechecking to mychecking” instead of “#trans f9 t0”. Ideally, the CU would support short codes for its power users and plain English commands for everyone else.

That said, it’s pretty simple to remember how to make a checking account balance inquiry, “#bal 9” (9 is the code for checking), which is the primary way the service will be used.

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Website implementation
Few members will actually use Twitter banking, at least initially. The main reason to embrace Twitter is for the publicity and brand value, especially when you are first.  Vantage takes full advantage of its first-mover position, placing a headline on its homepage, along with a Twitter feed directly below.

Other things Vantage CU does right:

  • Posted four how-to videos (although, the CU needs to choose a faster host for the videos because the Screencast-based videos run way too slow)
  • Posted FAQs, instructions, and screenshots
  • Wrote a blog post about the new service
  • Proactively reached out to bloggers resulting in great initial coverage (Financial Brand, Everything CU, and Currency Marketing) which can help bring mainstream press coverage later
  • Allows users to subscribe to the Twitter feed via RSS (directly from the CU’s homepage)

Analysis
image The PR value alone should more than justify the expense of Vantage CU’s Twitter service. And if Twitter continues to work its way into the fabric of consumers’ daily lives, the service could attract a decent following.

In keeping with our 10-year tradition of recognizing new online “firsts,” we are awarding Vantage a 2009 Best of the Web award (note 4) for being the first in the world with full-service Twitter banking.

Vantage Credit Union homepage featuring new Twitter service (5 Oct 2009)

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Notes:
1. See our Online Banking Report: Bank 2.0 (Nov. 2006).
2. For more info, see our Online Banking Report: Leveraging Twitter (May 2009)
3. However, text-messaging users would likely prefer to make balance inquiries directly from their phone’s SMS function, rather than t
aking the time to open the Twitter app or website. The most likely user is someone already using Twitter who decides to do a quick banking inquiry while Tweeting. 
4. OBR Best of the Web awards are given periodically to companies that pioneer new online and mobile banking features. It is not an endorsement of the company or product, just recognition for what we believe is an important development. Vantage Credit Union is the 75th recipient since we began awarding it in 1997.

WV United Federal Credit Union is First with iPhone-based Remote Check Scan & Deposit

imageIn June, we reported on USAA’s upcoming iPhone app that will support remote check deposits. But it looks like they were beaten to market by tiny WV United FCU headquartered in Charleston, WV. Haven’t heard of WV United? They have just six employees, $11 million in assets, and 3,000 members.

But somehow they were able to pull off something that no other financial institution has yet to accomplish, accepting paper check deposits via a native iPhone application (iTunes link, see note 1 and 2). The application was added to the iPhone App Store on July 4, and the CU wasted no time in heralding the innovation with a homepage banner (see screenshot below).

imageThe application could not be simpler. Users take a picture by pressing the button on the left (see inset), verifying that the image is readable, then uploading with the button on the right. WV United uses the member’s mobile phone number to apply it to the correct account. The latest iPhone OS 3.0 is required.

The credit union also accepts deposits via in-home scanners using secure file transfers powered by LeapFile (co-branded site here).

It appears both services simply send images to the credit union where an employee manually converts them to ACH items. According to the E-Deposit customer agreement, the first 10 items each month are free; a $1 fee per item for the remainder of the month is charged. This allows for collection of a bit of fee revenue from small business members, while enabling most consumers to use it free of charge.

Certainly, fraud possibilities exist. But the CU’s normal deposit-processing controls should mitigate most of the risk (see E-Deposit funds availability policy here). 

Mitek Systems introduced a mobile remote-deposit system last year (post here), but it’s not yet in production at any financial institutions. 

imageAnalysis: Although not a feature that will see widespread usage, mobile check deposits will prove convenient for certain customers, especially mobile small businesses. More importantly, it helps differentiate between online and mobile services.

So, for raising the bar in mobile banking, we are awarding WV United with our first OBR Best of the Web award for 2009 (note 3). In the 12 years we’ve given the award, WV United is by far the smallest financial institution to win. 

WV United FCU homepage with iPhone banner (11 July 2009)

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iPhone app landing page (link)

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Notes:
1. Sometimes it’s nice to be small. WV United has six employees total, according to NCUA data. Most large banks would have a project team larger than that just to do the feasibility study on mobile remote-deposit capture.
2. For more info on the importance of iPhone applications for financial services, see our recent full report: Online Banking Report: Mobile Banking via the iPhone.
3. OBR Best of the Web awards are given periodically to companies that pioneer new online and mobile banking features. It is not an endorsement of the company or product, just recognition for what we believe is an important development. WV United is the 74th recipient of the designation since we began awarding it in 1997.

Best of the Web: Zions Bank’s Holiday Gift Planner Wraps Personal Finance into a Neat Package

imageAs I was publishing my earlier post on the Thanksgiving message on the Zions Bank homepage, I noticed a small Holiday Gift Planner banner in the lower left corner (see inset below). Expecting to find a pitch for Visa or MasterCard gift cards, I clicked on it and was surprised to find a very cool holiday microsite called at MyHolidayGiftPlanners.com (see screenshot 1 below and note 1).

imageThe gift planner is a personal financial management tool for planning, budgeting, and tracking holiday gift expenditures. Users create a gift list for each person by entering a budget amount per person, an estimated cost for each planned gift, and then later the actual amount spent.

The tool does all the math, tracking progress against each recipients’ gift list and how the total holiday budget is faring (see screenshot 2). It even includes a space for capturing gift-buying notes (see below). This year’s list will be archived to provide a handy reference for next year. Hopefully, the bank will use email to draw users back next year.

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Consumers could do the same thing on a spreadsheet or within most personal finance programs. However, Zions has built an elegant solution that is faster and more convenient. I’ve always done this for my kids on a piece of paper which I inevitably lose and/or leave out on the table where anyone can read it. I look forward to keeping this list bookmarked and password-protected on my computer this year. 

Anyone can use the program, you needn’t be a Zions customers. It takes seconds to sign up inputting name, email address and password (see screenshot 3). The site gently cross sells credit cards to pay for itself. There’s a banner that runs across the top of the planning page (screenshot 2) and a link to special cardholder discounts on the main page (screenshot 4).

Zions should turn the planner into an iPhone/Android app to help users track gift purchases on the go and avoid the need to print the list prior to the trip to the mall.

obr_bestofweb Bottom line: The Zions gift planner is a great example of how to creatively use branded financial management tools to both help customers and create synergy with banking products. We’re giving Zions our sixth OBR Best of the Web 2008 award for creating a simple solution to help customers avoid holiday overspending, a pesky personal finance issue that is top-of-mind this year. 

 

1. Homepage of Zions Bank’s gift planner (28 Nov 2008)

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2. A credit card cross sell runs across the top of my personalized gift planner

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3. Email address is captured for future marketing purposes

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4. Credit card discounts are displayed along with an credit card application

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Note:

1. Evidently the planner was available in early December last year. The first blog mention was 7 Dec 2007.

Online Banking Report Looks at New Security Technologies that Promise More Peace of Mind

image With bad news pouring down from all corners of the financial services world, it’s a difficult time to be a bank marketer no matter what condition your financial institution is in (see note 1).

imageBut besides sending reassuring emails to your customers, highlighting your strong balance sheet on your website (see inset), and for the few with blogs, dropping the occasional rosy post into the RSS or Twitter feed (note 2), what’s a banker to do?

When fear is rampant, little things can make a difference. Your customers have long been nervous about banking online. Most aren’t afraid enough not to use it, but lingering doubt remains.

Now might be a great time to follow the lead of ING Direct, Firstrade, and Muriel Siebert and introduce a software solution that provides extra security for online banking. While it won’t make a Fannie Mae shareholder any happier, it’s reassuring in these times that at least there are no crooks stealing your username and password.

obr_bestofwebOnline Banking Report publishes Security 4.0 (note 3)
In the latest Online Banking Report, we look at several promising software solutions that allow even malware-infested users to connect safely to their bank. Both solutions earned OBR Best of the Web designations (note 4): 

  • Rapport from Trusteer, now being distributed by ING Direct in the United States and Canada (previous post here)
  • SafeCentral from Authentium, being distributed by Firstrade and in testing at several major banks (Finovate Startup demo video here)

Online Banking Report: Security 4.0 Tabl of Contents Sep 2008We also take a closer look at Bank of America’s SafePass (previous post here), which is an easy way for customers to add an extra security layer to their login, although it won’t prevent certain malware to hijack the session. See the inset for the complete Table of Contents.

Online Banking Report subscribers may download it now here. Others may download abstract here, or purchase here. Cost is US$495. 

Notes:
1. But be thankful if your financial institution is not in the headlines right now. I’m in the hometown of WaMu and the headlines this morning were not pretty.
2. Blog post from Verity CU on 16 Sept.; Twitter update from First Federal today   
3. Our fourth full Online Banking Report on security/privacy; previous reports were #119, #93/94, and #48
4. OBR Best of the Web awards are given periodically to pioneering online banking features. It is not an endorsement of the company or product, just recognition for what we believe is an important development. Trusteer and Authentium were the 71st and 72nd recipients of the designation since we began awarding them in 1997.

New Online Banking Report: New Models for Lead Generation

imageOur parent publication, Online Banking Report, has published a new report: New Models for Lead Generation: How auctions, community recommendations, product placements, and specialized search provide alternatives to Google AdWords.

Not only is this the longest report title in our history, it’s the first time we’ve looked specifically at lead gen sites (click on the Table of Contents right, to download the abstract).

obr_bestofwebThe report was inspired by MoneyAisle, an auction-based retail deposit market, that debuted June 9. Although a few kinks need to be worked out, we are impressed by its work and are awarding it the second OBR Best of the Web this year (see note 1 and Credit Karma below).

But auctions were not the only new lead-gen model we looked at. Others included:

The report, which includes a 10-year forecast for auction and personal finance community involvement, is available as part of an annual Online Banking Report subscription or it can be purchased individually for $495 here.

Next month: New security technologies your customers are going to love, or not.

Screenshot: Credit Karma offer page: Countrywide’s high-yield savings offer is rated positively by 53% of Credit Karma users and earns a composite score of 63% which also factors in clickthrough rates and exclusivity, see box in upper right (9 July 2008)

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Note:
1
. The first winner in 2008 was SmartyPig (here). Best of the Web awards are given for new products/features that “raise the bar” for online banking. It is neither an endorsement of the company, nor the product itself. See previous coverage here.

Social Networking Meets Savings Accounts: SmartyPig Launches this Week

Update March 6: I added two clarifications pointed out in the comments. First, that normal ACH deposits to your own SmartyPig account are free of charge. Second, that the retailers bonus on withdrawals to their gift cards is UP TO 5% (not a flat 5%). 

imageHow about this recipe? Take a basic FDIC-insured savings account, spice it up with automated electronic transfers and email communications, mix in gift/debit cards, wrap the whole thing up in a social network, and top it with a memorable name. What do you have? SmartyPig, the most innovative financial service we've seen since Prosper launched two years ago.

The site is in the final week of private beta. To register, you still need an invitation code. The company asked me not to publish it, but it's OK if I distribute by request via email. Send a note to info@netbanker with "SmartyPig" in the subject line. Or simply wait until after this weekend when the site goes into public beta.

How it works:

image1.  Users create savings accounts at the site. Deposits are held at West Bank, a Des Moines, IA- based financial institution with $1.3 billion in assets. Funding is through ACH (electronic) transfers from outside bank accounts. SmartyPig currently pays a high, 4.3% APY on deposits. 

2. After the account is established, users are encouraged to create savings goals funded through automatic monthly ACH transfers until the goal is met.

3. Now here is where SmartyPig diverges from a typical bank account. The savings goals can be made public or kept private. Public goals can be funded in part, or entirely, by outside contributors. Think of grandma and grandpa contributing birthday money to help junior buy a new bike. Contributions are funded through credit card charges with a maximum charge of $500 and a per transaction processing fee of $4.95. To make sure grandma's $50 doesn't go to a Mario game, the money cannot be withdrawn until the savings goal is met (or canceled by the primary account holder).

4. After goals have been met, the user can elect to take the funds out in the form of a MasterCard debit card or a gift card from a retail partner such as Amazon.com. Participating retailers add up to 5% bonus to the savings goal so that $1000 saved for the plasma TV is worth $1,050 if redeemed via Amazon gift card. That's a great added incentive to use the service.

Gift Cards
SmartyPig gift card SmartyPig also sells gift cards that can be redeemed towards new or existing savings goals. These cards, issued in denominations of $25 to $500, are meant to be given as gifts or employee incentives. They cannot be redeemed outside the SmartyPig system. Physical card are produced and delivered for a processing fee of $4.95 plus delivery fees of $5.95 or more. Or consumers can deliver a virtual card through email to eliminate the delivery charge (but the $4.95 processing fee remains the same). 

Summary of Fees

  • Your own deposits: Free (via ACH transfer)
  • Public contributions: $4.95 flat processing fee for each contribution made by an outside contributor. Contributions can be from $25 to $500 and are funded via credit card.
  • Gift cards: Gift cards incur a $4.95 processing fee and an optional $5.95 shipping fee. The shipping fee can be avoided if a virtual gift card is chosen which is fulfilled via email.

Analysis
Although, not everyone is going to want to go through the extra steps to save this way, we are impressed with SmartyPig and are awarding it our first OBR Best of the Web award for 2008 obr_bestofweb(see note 1). We like how it's part gift registry, part savings account, and potentially a big help in getting users in the habit of saving for larger goals. The look-and-feel is very Web 2.0 and should resonate with teens and twenty-somethings.

There are a few rough edges that need better explanation and/or minor redesign. For instance, there is no way to simply add funds to a savings account without first setting up an automatic funding plan. But the site isn't even officially launched yet, so these issues should be ironed out during the beta period. 

The processing fee for outside contributions of $4.95 per transaction is a bit on the high side (there is no fee for funds transfers from your own bank account). One could argue that it's worth price of a triple mocha for the convenience and benefits of the savings account. But for smaller deposits of $50 to $100, it's a pretty high percentage of the overall deposit.

It would be nice if the company could lower the fee, perhaps by creating an ACH funding option. Another way to reduce costs is to lower the 4.3% APR. I'm not sure the savers attracted to this account really need that high of a rate. A lower interest rate combined with lower fees might make the service more palatable overall.   

The company may have to tweak its business model going forward. But the real lesson here is that savings accounts can be made stickier with automation and incentives. Leave it to the Iowans to show us the way (note 2). 

Screenshots

1. The main account screen: I set up a savings account for my son. Then set a savings goal of $300 for a new bike. SmartyPig requires that the savings goal be funded in equal monthly withdrawals from the linked checking. It would be helpful if you could opt out of the automated savings plan so that the savings goal could be funded manually. 

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2. Public goals: If you opted to make your savings goal public, anyone can find it by searching via email address under the "Friends' Goals" tab on the top (you can see this one by searching for jim@netbanker.com).  SmartyPig widget

Users can publicize their goals with a widget (see inset, and link at bottom of screen above) or by sending email to friends.

After making a contribution, the following screen is displayed.

SmartyPig contribution thank you screenshot

 

Note:

1. Online Banking Report (OBR) Best of the Web awards are given for products that "raise the bar" in online financial services, usually for pioneering a new feature. Recent winners are covered here. Five awards were been handed out in 2007: two for Wesabe, and one each for Jwaala, Buxfer and Obopay. In the past 10 years, 67 companies have won the award.

2. Full disclosure: I was born and raised in Iowa and my brother lives within a few miles of the SmartyPig world headquarters.

KeyPoint Credit Union Launches on Facebook through mShift Platform

Link to Key Point Credit Union KeyPoint Credit Union is the first financial institution to launch full-fledged account access through Facebook. Using its mobile banking engine powered by mShift, members can view account balances within their Facebook account (see screenshot below).

To view their balance within Facebook, users must add the KeyPoint application to their Facebook account. The first time it's used, users must log in to their Key Point account using their normal username and password. On subsequent visits, balance info is automatically displayed with no login, provided the user is logged into their Facebook account.

In addition to balance info, the KeyPoint application displays content taken from the credit union's homepage.

Analysis
Even though the application is relatively simple, we are giving it our OBR Best of the Web award, the second one this week, and the sixth in 2007 (see previous coverage here). Placing account balance info within Facebook is a great way to demonstrate commitment to social networking members. There are privacy issues with displaying data without a banking login (note 1), but it's reasonable to let your customers decide for themselves if they are comfortable with this setup.    

Screenshots
KeyPoint Facebook application prior to first authentication session:

Key Point Credit Union Facebook application

After initial authentication, account balance info is automatically displayed:

Key Point Credit Union Facebook application

Note:

1. Other Facebook users cannot see the balance info, but someone sharing the computer might see it.

MySpace Meets Quicken: What’s Happening in Social Personal Finance

Link to Online Banking Report

Last week, I promised to provide more details on the conclusions in our latest Online Banking ReportSocial Personal Finance: Will social networking revolutionize personal finance? It was mailed to subscribers last Friday, so it should be making its way through inter-office mail as we speak (or download here). 

Here are the major themes/conclusions from the report:

  1. Social networks are the new main street; so banks that want to be where their customers are should NOT ignore social networks.
  2. There are many ways to bring social networking concepts into mainstream banking sites, for instance blogs and forums allow conversations to take place with both customers and employees participating.
  3. The leaders in the space now are startups such as Wesabe and Lending Club. But what they gain in social networking savvy, they more than give back in lack of trust. So financial institutions are still incredibly relevant in social personal finance.
  4. In the future, social networks may become so trusted that they can function as a virtual credit union, bringing together members to provide each other with financial services (e.g., P2P lending) or using their clout to negotiate deep discounts with financial providers (e.g., affinity credit cards).

 Social personal finance innovators profiled in the report include:

  • Buxfer — Named OBR Best of the Web in the report for several pioneering features, including login via third-party APIs, transaction input via email, file appending, Google gadget, and budget alerts
  • Wesabe — Also named OBR Best of the Web for its integration of personal spending records with the wider community

We also looked at Mint, Geezeo, Lending Club, Wells Fargo, and Intuit's new Personal FinanceWorks and Small Business FinanceWorks.

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For more information on the report see the landing page here or download the abstract here. And for Colin Henderson's take at The Bankwatch, go here.