What’s the Fuss? Amazon Already Offers Full Suite of Banking Services [Updated]

Amazon made headlines around the banking/fintech world this week following a WSJ story Monday about a rumored collaboration with Chase Bank and/or Capital One. The click-bait title, Next Up for Amazon: Checking Accounts (apparently revised from the title embedded in the hyperlink, “Are You Ready for an Amazon-branded Checking”) made it go viral in the United States, at least with news organizations.

The facts were less exciting than the headline. Apparently the ecommerce giant issued an RFP last year seeking suppliers of a “hybrid” checking account aimed at younger and unbanked customers (it’s unclear whether that is a single segment “young and underbanked” or two segments, “young” and/or “underbanked”). And there was no indication that any new product was coming now, or ever.

There is one thing missing in the 100+ stories that appeared in the wake of the WSJ piece:

Amazon already is a bank in everything but the name

Here’s a list of its current financial and payment offerings:

  • Amazon Pay: Used by 33 million to pay for goods at non-Amazon sites
  • Amazon Gift Cards: Available at brick & mortar retailers all over the country (I’ve bought more of those than all other gift cards combined)
  • Amazon Store Card, with financing option on qualified purchases: Issued by Synchrony Bank
  • Amazon Cash, a virtual debit card which allows cash deposits to the Amazon Pay wallet
  • Amazon Rewards Visa Signature Card, an affinity card issued by Chase Bank (also Amazon Prime Rewards card; see also March 13 update below)
  • Amazon Prime Reload, which pays a 2% bonus for cash deposits into Amazon Pay
  • Amazon.com Corporate Credit Line: A way for businesses to pay for Amazon purchases via monthly consolidated billing, underwritten by Synchrony Bank
  • Amazon Lending: Which has originated $3B to smaller merchants since 2011 (cited by Bloomberg, sourced to CB Insights)
  • Credit Card Marketplace: Hadn’t seen that before, includes Amazon co-branded cards along with Discover and American Express
  • Gift Card marketplace: Hundreds of prepaid gift cards from other retailers along with restaurants, travel, and entertainment providers
  • Amazon Currency Converter: For purchasing on Amazon.com in local currency
  • Amazon Allowance: Tool for parents to enable their kids to pay directly (link was broken so not sure the status)
  • Shop with Points: A number of major banking rewards programs can shop directly at Amazon with their bank-provided points including Citibank, American Express, Chase and Discover
  • Alexa: Supports banking and payments info (aka skills) from a number of financial institutions including Capital One, US Bank, and American Express
  • Teen accounts: Amazon allows teens to set up separate logins and make purchases from an allowance amount and/or request approval directly from parents (Source: Business Intelligence).
    (Update 29 March 2018) Recent news reports imply that Amazon may be looking at creating additional teen payment options, potentially in partnership with banks

The only major retail banking service missing, a stand-alone debit card (although you can already link a debit card to your Amazon account). Which I’m guessing is the core of the RFP mentioned by the Wall Street Journal.

Update (13 Mar 2018): Bloomberg reports that Amazon is planning on launching a small business co-branded card with Chase, the issuer of Amazon’s consumer card.

Bottom line: Amazon is already deeply involved in banking and payments, as are most major retailers. Gift cards, co-branded credit cards, and SMB credit products are already being used by millions of consumers. Adding a debit card and/or “hybrid checking account” isn’t going to make them any more menacing as a competitor. The prime concern for banks is whether Amazon can move payment volume from bank-issued credit cards, where the industry enjoys healthy profit margins, to debit/ACH with narrow-to-non-existent margins.

Author: Jim Bruene (@netbanker) is Founder & Advisor at Finovate as well as Principal of BUX Certified, a financial services user-experience accreditation program. 


Friday Fun: Alliant Credit Union Raises Savings Rates

In this era of low rates and stingy credit approvals, it’s always nice to get a little good news from your FI. This week, Chicago’s Alliant Credit Union made the most of its 10 basis point increase in its basic saving rate. On its homepage, the drop-down navigation menus for both Bank and Invest, included a cute graphic touted the new 1.11% APY (see above).

And clicking on Learn More takes you to a page proclaiming rates “15.9x times the national average (I feel like they could just say “15x,” the extra 0.9x just makes it harder to read and is meaningless). See screenshot below.

Bottom line: If you got it, flaunt it. Have a great weekend! (and go Venus!)

P.S. Congratulation Alliant on being named “best HSA for spending” by Morningstar.

Author: Jim Bruene is Founder & Senior Advisor to Finovate as well as Principal of BUX Advisors, a financial services user-experience consultancy. 

Feature Friday: Discover’s Interactive Checking Account Comparison

discover checking comparison

Discover’s responsive page dedicated to selling its Cashback Checking is a thing of beauty from top to bottom (though we have some suggestions on a few of the finer points of the UX). We especially like the interactive comparison to the competition. Discovers starts by comparing its fees to Chase, Citi, and BofA. But the card giant makes it easy to compare against four other major brands (US Bank, Wells, Capital One and Fifth Third). Simply click on the + sign in the empty fifth column on the right and choose one of the brands from the popup (see below).

The table works on smaller screens including smartphones. But you can only compare to one other bank at a time. Users select the competitor with from a drop-down box.

Bottom line: If you clearly offer better price/value, then by all means flaunt it. While Discover makes a great case here for its Cashback Checking, it could be even better with more benefits listed (e.g., mobile deposit for one) and a tool to calculate financial savings and rewards. But overall, excellent work!

Author: Jim Bruene is Founder & Senior Advisor to Finovate as well as
Principal of BUX Advisors, a financial services UX consultancy. 

Banking Opportunity: Synced Joint Accounts

simple shared account

One thing we are looking forward to this year is the launch of Simple’s (part of BBVA) Simple Shared checking account. When the beta was announced last September (2016) and the company said it would be launching “some time in 2017.” See screenshots above.

The account promises to help users track their individual purchases, while also maintaining a shared transaction area and goal(s) that includes an Our Safe-to-Spend number across both users. Users would be able to simply transfer money to each other as well. And interestingly, it appears that any two people (and maybe more?) will be able to sync their Simple accounts together, it won’t have to be an actual legal joint account. That’s exactly how it should be.

Innovating in the Deposit Business
The deposit business is relatively straightforward. There are checking accounts, debit cards, and savings accounts (most paying a negligible amount of interest). So how does a bank differentiate itself in this absurdly low interest-rate environment? Branding, trust and location have been the traditional drivers and are still vital. And every decade or so a new technology comes along and there is some jostling along the way until everyone offers it (ATMs, VRUs, debit cards, online banking, mobile banking, etc.).

But even in a world where every FI offers the same basic product lineup, there are still ways to add value and increase market share and/or margins. Synced joint accounts, like Simple’s Shared Account. Married couples are the biggest opportunity, but there are other segments as well: Parents that need to sync with their kids. adults that need to sync with their aging parents, employers with employees, advisors with their clients, and so on.

There has been progress on this front. Many (most?) business accounts offer ways to enable third-party accountant/advisor access. Person-to-person transfers make it easy to send money to kids at college. And PFM solutions such as Mint, allow money-tracker couples to keep an eye on their spending across multiple accounts.

Bottom line: Existing solutions are often difficult to use, missing key features, and not fully integrated within big-name financial brands. Simple, which already offers a state-of-the-art checking account with Safe to Spend balance forecasting, natural-language search, and overall great UI, is expected to raise the bar considerably when Shared Accounts launches. I look forward to using it.

Author: Jim Bruene is Founder & Senior Advisor to Finovate as well as
Principal of BUX Advisors, a financial services UX consultancy. 

Opportunity Knocking: Senior Checking Accounts

Despite being AARP-eligible (50+), it took a conversation at Finovate with Theo Lau of AARP (see her guest post last month), to understand how poorly banks market to the older population (a demographic that controls 83% of the country’s household wealth).

senior-clip-artProblem 1: Let’s start with the name. What’s the most common name for accounts geared towards older customers? Senior checking. When I was a 30-something bank product manager, that sounded reasonable to me. But guess what, more than half of older adults hate being called seniors. What name do they like? Baby boomers (favored by 71%). Yet, there is just one lone Baby Boomer Checking account in the country. Step forward Texas Telcom Credit Union, you are the winner!

Problem 2: What’s worse than seeing the word Senior splashed across the top of the page? The clip art (sample above). It generally shows a smiling couple looking bewildered at a computer screen, or looking like they are having way too much fun on the golf course. Those images do not make your product more attractive to older customers. They are just tired cliches. We are all for artwork on webpages, but for older adults, we think it’s better to try something other than mature faces. For example, 1st Bank uses a graphic that appeals to all ages and demographic: $0.


Problem 3: What’s the incremental value? If you are going to market a special account to me, it better have something special. As much as I like 1st Bank’s graphics, there’s really no significant benefits over the bank’s plain old checking account, which are also fee-free. The one difference is interest, but at the current rate of 1 basis point, that’s more of an insult than a benefit (seriously, don’t call it interest-bearing if my after-tax gain is just a nickel per month per $10,000). You can add something simple, even a T-shirt, water bottle, or 2-for-1 dinner coupon. But there has to be something to set it apart.

But adding value for the older segment seems rare these days. It took 30 minutes of searching before I found a “seniors” checking account with a tangible benefit compared to the FI’s other checking accounts. Community Resource Credit Union gives its 55-and-older members a free safe deposit box, money orders, travelers, and cashiers checks (see below).


Bottom line: Don’t bother offering Senior checking that differs from your other accounts by name only. It’s disingenuous, off-putting to customers, and embarrassing to your staff who have to explain it. But DO offer an account targeted to your older customers, a Baby Boomer account, that includes SOMETHING that sets it apart. Preferably something your older customers truly value, such as extra security or a dedicated customer service support line.

Friday Fun: Berenstain Bears Bring Banking to the Under-10 Set

berenstain-cu-book-coverI thought I’d left behind Berenstain Bears 15 years ago when my youngest graduated to Animorphs books. But they made an appearance today when I discovered how they are helping kids get involved with saving and managing money. And before you dismiss their appeal, did you know the Bears have sold 300 million copies in a 54-year run which includes 300 titles!

Three years ago, Franklin Mint FCU, through its CUSO CUNFL, developed a financial literacy program based on the series. It includes a book written by none other than Mike Berenstain himself, called Berenstain Bears Visit a Credit Union. It is licensed to other credit unions to appeal to grade schoolers.

obee-cu-cub-account-benefitsThe book is in use at a number of credit unions, but none more prominently than O Bee FCU in the Tacoma, Washington, area. Its Berenstain-themed Cub Account for under-12 members includes a 7.5% rate on the first $500 in savings, an important feature so you can use something other than pennies to show your youngster the benefits of savings. More impressive for the kids, every branch-deposit earns a free Dairy Queen ice-cream cone coupon (see inset for full list).

O Bee also offers a classroom financial literacy program with visits from the bears themselves, along with a jumbo version of the book to read to the class.

O Bee Credit Union’s Cub Account landing page


Bottom line: Efforts aimed at banking the kids of your customers are a clear win-win. It’s the right thing to do; kids, and their parents, need these services. And it helps keep both the child and their parents as customers for the rest of their lives. See our previous posts for more examples.

Savedroid Launches Intelligent Savings App


Straight outta beta, savedroid’s intelligent savings app is now available for free at Google Play.

“Saving has been a super boring and complicated subject,” savedroid founder and CEO Dr Yassin Hankir said. “Many prefer to go to the dentist than to speak with a financial adviser. We change that. With savedroid, saving is finally integrated into the daily lives of users and is fully automated.”

savedroid_app_1Savedroid enables users to set behavior-based rules called “smooves” that help steer a small amount of money toward savings for various goals. For example, set aside $1 for every cup of coffee you buy at your favorite cafe, or $5 every time you spend more than an hour on social media. The savings strategy works as well for short-term goals like a vacation a few months from now or longer-term goals like saving for college. Hankir added: “We make saving exciting, convenient and rewarding, and thus particularly suitable for the target group of millennials.”

The savedroid app comes with a virtual MasterCard courtesy of a partnership with Wirecard, which also processes payments for users by way of an e-money account. “In Wirecard, we have found a reliable and experienced partner for this process, [one that] fulfills all the relevant technical and banking standards,” Hankir said.

Founded in 2015 and headquartered in Frankfurt am Main, Germany, savedroid made its Finovate debut at FinovateSpring 2016. The company raised $1 million in seed funding last month in a round led by the investment and development bank Rheinland-Pfalaz (ISB) and featuring the participation of several angel investors.

BECU Helps Parents Teach Savings Ethic with 6.17% APY

smartypig_retailgiftcardBack when my kids were able to save—both are in college now, so that’s not happening—ING Direct and others offered interest rates that actually created an incentive to save. My oldest even enjoyed 5% rates for a while, quite helpful in showing how the “free” $5 to $10 per month he earned at the bank grew his total over time.

But today’s middle-schoolers and younger teens have come of age in an absurdly low interest-rate environment (see note 1), with little chance to experience the joy of compound interest. SmartyPig (inset, note 2) and others have created savings bonuses centered around merchant gift cards. That’s a clever way to add value, but it can also send a mixed message, “Hey Junior, save $250 and you’ll get an extra $5 if you spend the whole thing at Best Buy.” For parents who’d like their kids to hold onto that cash (at least until college), few options exist, other than bribing your kids with parent-funded bonuses.

But a few financial institutions have addressed the forlorn kiddos and their disappointed parents by dramatically boosting the rates paid on the first few hundred of a balance. For example, in the greater Seattle area, BECU pays 6.17% on the first $500 deposited in its Early Saver account (see screenshot below). Granted, the rate reverts to pretty much zero (0.1%) after that, but kids at least get enough interest every month ($2.50/mo on $500 balance) to make it feel like it’s worth holding the money at the credit union (note 3).

Bottom line: Your customers’ children are your future. It’s worth investing in services to keep them at your FI for the next decade or six. If the $30 annual subsidy is beyond your budget, enable parents to pay for the rate bonus. Let parents “boost” the interest paid on their child’s account as much as they want. To provide an extra incentive, you could match parental contributions up to a certain point (e.g., $10/year).


BECU Youth Savings landing page (link, 11 Jan 2016)
Note: BECU has elevated Youth Banking to one of six choices on its Everyday Banking primary navigation item.





1: For example, Bank of America currently offers 1 basis point interest on a child’s account, which means your child’s $1,500 average balance earns 1 cent per month!
2. Social Money, owner of SmartyPig, was acquired by Q2 Holdings last month (Dec 2015).
3. BECU offers a similar boost for the first $500 banked by 18+ year-old members as well, but the rate is only 4%.
4. Off topic: BECU has done a great job optimizing its homepage for responsive design. Open it in your browser and then shrink the window and watch how it resets. Very nice!

Tuesday Tactics: Creating an Interconnected Family Bank Account

Yodlee_tandem_positioningA major consequence of ubiquitous digital banking will be a long-term improvement in customer retention, at least for the “primary” bank/checking account. Digital natives will perceive little need to change banks as they move from home to college and then to multiple jobs. Assuming you keep them satisfied and connected to family members, today’s 15-year old might stick with their primary bank or credit union for seven or more decades.

But you can’t retain a customer who never opens an account.

That’s why I believe FIs should do their best to get an account started for every child in every customer household, probably bundling them into a “family wrap account” which could carry a premium fee (though the individual kids’ accounts should probably come at no additional fee).

And the family account needs to be fully connected and in sync with the parents, guardians, and other current and potential family members. That enables real-time money movement along with expense tracking. And yodlee_tandem_streamas children grow into adulthood, the accounts should be able to be easily be converted into their own family account, and the cycle can be repeated with their kids.

Building it

We’ve seen a number of youth-oriented platforms at Finovate, but they have rarely focused on inter-connectivity and communications. Two exceptions are Yodlee’s Tandem app (inset) which debuted at FinovateSpring 2013 and FamZoo, which demoed its new platform the same year. Watch their demos and be inspired (Yodlee, FamZoo).

For more info on the mobile side, see yesterday’s post.

Mobile Monday: Turning Spending Management Into a Positive Experience

moven_wheelMany people closely track their spending because they have to. They live paycheck to paycheck and there is no choice. A few track it because they are masters of control, and they love the sense of order that results from processing each transaction. But almost no one tracks spending for fun or fulfillment.

If a bank, card issuer, or fintech startup cracks that barrier into entertainment, they would surely be en route to fame and fortune (or at least a demo slot at Finovate). If I knew how to make expense tracking fun, I wouldn’t be writing about it here. I’d turn it into a startup, or at least a consulting practice.* So for what it’s worth, here’s my five-point plan for making banking fun.**

1. Go all-in on mobile
This is probably obvious to most readers. But I still encounter people who still believe that money management is best done on a desktop. True, it’s easier to design for the big screen, and real keyboards are nice, but it’s just NOT how people interact with digital providers today. For example, 76% of Facebook’s and 88% of Twitter’s ad revenue last quarter was on mobile (source). What more do you need to know?

2. Remove the login
You cannot engage mobile users multiple times per day with a standard username/password system. Thankfully, logging in via fingerprint is becoming a handset standard. Bank of America said last week it was about to adopt TouchID on iOS, so the log-in problem should eventually be going away. And for non-biometric handsets and/or users, a 4-digit PIN entry is a pretty good workaround.

3. Stream the transactions
Users should not have to do any work to see each new transaction in reverse chronological order. It should be just like an email system showing new transactions at the top. Unread ones should be super-easy to identify by staying boldface until viewed. For extra credit, adopt the gmail standard, identifying Priority transactions at the top of the stream.

4. Gamify the spend
Once you’ve laid the groundwork with #1, #2 and #3, it’s time to do the tough part of making tracking fun, or at least interesting enough to hook users. I look to Fitbit and Starbucks for inspiration. I probably look at my Fitbit app 7 to 10 times per day to see how I’m doing against my weekly goals; in comparison, I probably open a mobile banking app about 1 or 2 times per month. Why does Fitbit get 20x the engagement? Because it’s a POSITIVE experience. Every time I open it up I’m literally steps closer to my goal. That’s positive reinforcement. In comparison, every time I look at my banking app, I’m one more step removed from my goal of spending less. That’s a negative.

Banking is never going to be as fulfilling as step tracking, but it doesn’t have to be a downer at every login. FIs need to provide positive reinforcement instead of negative. Moven does as good a job as any along these lines by showing a red/yellow/green color-code rating on each expenditure to help users instantly understand what they are doing. And there are lots of ways to begin quantifying spending once users stop being afraid to log in for fear of always getting bad news.

5. Reward the save
Once users start seeing tracking as a positive experience, positive behaviors can be rewarded. Starbucks does a great job getting me to change my behavior by delivering custom offers and rewards to the mobile app. Before the mobile app, and more importantly, mobile ordering, I was a once-or-twice per-month customer. Now, it’s my seventh day in a row inside a store in order to win “14 bonus” stars (value about $7 if I use them to score a sandwich).

Until interest rates get back to something that you can actually measure, financial institutions need to overhaul their rewards programs to provide incentives for beginning savers. I realize how challenging that is based on the near-zero margins currently in the deposit and debit-card business. But there are ways to do this, such as providing retailer discounts when savings goals are reached. See SmartyPig/Social Money (post) or Finovate demo.

*Just kidding, Finovate employees do not invest in or advise fintech startups (outside the Finovate event-coaching process).
**By “fun,” we are not saying money management will compete with television or Facebook. The aim is to make banking useful on a daily basis, perhaps the equivalent of checking the weather forecast.