Deposits, Checking, Savings, CDs

“Forever Free” Banking Online

By Jim Bruene Posted on
Categories: Deposits, Checking, Savings, CDs, Halifax Bank, Strategies

Zios_freebanking_iconIf you were to chart the top-10 events in bank-marketing history, one of them would be the March 1990 launch of AT&T's "no-annual-fee-for-life" Universal Card. Today, an annual fee waiver hardly rates a bullet-point in a three-page direct-mail piece. But 16 years ago, the offer was so successful it caused massive application backlogs that made the 6:00 PM national news. In its heyday, the card attracted one million new accounts per month. However, the marketing stalled once the fee-free strategy was widely copied, and the portfolio was sold to Citibank in late 1997.

I've often wondered if there was a similar opportunity online to recreate the success of AT&T's offer. Probably not, but I do think "free forever" online banking would attract attention and generate new enrollments. To make it profitable, you might make a bundled credit account a requirement (the requirement could be waived in the event of a credit decline).

Halifax_uk_freebizbanking_1
At first glance, UK-based Halifax Bank <halifax.co.uk> has an unbelievable "free forever" business banking program. But you can see the pesky asterisk in the upper right. Reading the fine print, the account is only free if you keep at least 5,000 pounds on deposit and write fewer than 100 checks per month.

The problem is that U.S. consumers have seen so many free-checking offers, it's not such an attention grabber any more. One way to get past consumer skepticism is to provide a longer list of freebies than they've ever seen before. For example,

  • No checking account monthly fees
  • No check-writing fees
  • No ATM fees
  • No teller fees
  • No telephone call fees
  • No online banking fees
  • No funds-transfer fees
  • No NSF/OD fees*
  • No late fees*
  • No returned-check fees*
  • No PIN debit fees
  • No signature debit fees
  • No credit card fees
  • No ACH fees
  • No archive-access fees
  • No statement fees
  • No direct-deposit fees

*If open credit available

Feel free to use this idea and let me know if it works.

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Citi Direct Bringing in $1 Billion Per Month in New Money

By Jim Bruene Posted on
Categories: Citibank, Deposits, Checking, Savings, CDs

Bernstein_conf_logo
According to remarks made by Citibank CEO Charles Prince at the Sanford Bernstein investor conference, the bank's new high-yield savings account, currently yielding 4.75% (see NetBanker May 19), is bringing in $1 billion per month in new money. He characterized the deposit total as, "the equivalent of having opened 23 new branches."

His exact quote, available via webcast (comments start at the 47:45 mark of the webcast) was, "In the first ten days after the launch, we had ten times the volume we predicted. Today, literally only a few weeks after the launch, we've raised 3 billion dollars in deposits." He also said that two-thirds of that was "new money to the institution."

These numbers are in line with the industry forecast outlined by Citibank.com director Catherine Palmieri a month ago (see NetBanker May 5) of $250 billion in 2006. If that forecast holds true, $20 billion per month into high-yield savings, Citibank is bagging 7% to 8% of the market. 

—JB

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E*Trade on MySpace

By Jim Bruene Posted on
Categories: Advertising & Promotion, Deposits, Checking, Savings, CDs, E*Trade, MySpace

Etrade_myspace_ad1_1 E*Trade is running a clever teaser advertisement on MySpace today. The 200 x 175 pixel ad in the right-middle area of the user's homepage asks, "Are you willing to accept a $1.50 fee to see this ad?" (click on the inset right for a closer view).

Etrade_myspace_ad_1Choosing "yes" results in another screen saying, "Are you sure?" while selecting "no" yields a "Good." Either way, a pitch for E*Trade's ATM rebate program is the final screen (click on inset left for a closeup). Users clicking through end up on the landing page shown below.

Etrade_myspace_landing Analysis
Although it took me a moment to figure out the premise, that a $1.50 fee to view an ad is as absurd as paying that to use an ATM, it's a clever campaign. The company is sure to get good click-throughs, at least on the teaser ad. Whether the company signs up enough good checking accounts is another matter. But if you are courting young online users, you must take a look at MySpace (see
NetBanker March 16).   

—JB

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Huntington’s Online Game Boosts Blue Jackets’ Affinity Marketing Efforts

By Jim Bruene Posted on
Categories: Deposits, Checking, Savings, CDs

Huntington_bluejacket_game_1As part of its sponsorship of the Columbus Blue Jackets National Hockey League franchise, Hungtington Bank has created an online Flash game. The simple hockey-themed game is easy to play and apparently addictive, at least for "Chuck Norris" who had all five weekly high scores, ranging from 250 to 350 times my score of 1,162 (see left).

At the conclusion of the 45-second game, users are invited to play again or "challenge a friend," a great way to spread the word virally. The bank's logo in the upper right clicks through to its regular homepage.

Huntington_bluejacket_homeAccess to the game is from a "Blue Jacket's Banking" page <huntington.com/ bluejacketsbanking> at Hungtington (click on inset for a closeup). The bank dresses up its checking accounts with Blue Jacket checks, ATM card, and mousepad. Any of the bank's checking accounts can be ordered with Blue Jacket adornment.

Unfortunately, the online application process requires "blue jackets" to be manually typed in the promotion code field or the customer will receive regular old Huntington colors.

–JB

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Ohio Savings Marketing CDs through AmTrust Direct

By Jim Bruene Posted on
Categories: AmTrust Direct, Deposits, Checking, Savings, CDs, Direct Banking

Amtrustdirect_homeOhio Savings Bank <ohiosavings.com> is marketing CDs through a direct-banking subsidiary, AmTrust Direct. The company is currently topping the 1-yr CD chart at BankRate.com with a 5.35% APY. Users can click through to the direct-banking site (see screenshot right) through an enhanced listing at BankRate.com.

The direct banking offer is only 35 basis points higher than the 5.00% offered at the parent, Ohio Savings, or its AmTrust Bank <amtrust.com> division.

—JB

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Citi Focuses on its High-Yield Savings Account

By Jim Bruene Posted on
Categories: Citibank, Corus Bank, Deposits, Checking, Savings, CDs, Emigrant Direct

Citi_esavings_msn_1On Tuesday (5/16), Citibank raised its e-Savings rate 25 basis points to 4.75%, making it the highest savings rate at a name-brand financial institution. Only Corus Bank in Chicago has a higher APY on BankRate.com today, 4.84% with a $10,000 minimum.

Bankrate_savingspageMore importantly, Citi continues its massive ad buy touting the rate. It was back on the top of MSN's homepage today, and the bank has bought huge parcels of BankRate.com, with some pages running three Citibank promos, top, bottom and side (see BankRate "Checking & Savings" page right). It's similar to what Emigrant Direct did last year to kick off its direct banking efforts (click here to see past NetBanker articles on deposit marketing).

Analysis
Emigrant Direct, HSBC, ING Direct, and now Citibank are all spending $10+ million per year promoting high rates (see ad spending NetBanker5/17). While high-rate offers are nothing new, the ease of finding rate deals online and transferring the funds means it will be harder to hold onto those high-balance 0.50% checking and savings account balances.

—JB

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Sunmark FCU Goes Direct with RateEdge.com

By Jim Bruene Posted on
Categories: Deposits, Checking, Savings, CDs, Sunmark FCU

Rateedge_logoWe've seen a number of banks enter the direct banking business, primarily through high-rate savings products. Late last year, Sunmark Federal Credit Union <sunmarkfcu.org> joined the fray with a private-branded direct Web offering at RateEdge.com (click on screenshot below for a closeup).

Rateedge_homeThe Internet-only savings account pays 5.25% interest on all balance levels with no fees and no minimum balance. Rates are five times higher than the credit union's regular share account, which pays 1% on balances of $5000 or more. The credit union's money market pays 2% on a $25,000 balance.

The only possible fee is for transferring money OUT of the account more than twice in a month. The third and subsequent withdrawals are charged a fee ranging from $2 to $5 per transfer depending on the amount. Refer to its fee schedule for more information.

This would be the best savings account in the country, except that it is limited to residents of six counties in upstate New York (Albany, Montgomery, Rensselaer, Saratoga, Schenectady and Schoharie). However, anyone in the country can open an account if they have a relative in any of those counties, or at least claim* they do.

*The application asks for the name of the relative living in the six-county area, but no other identifying information. According to an online posting, the credit union's customer service department requires the address and phone number of the relative prior to opening the account. We did not test it ourselves.

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Hiding Your Offer from Existing Customers

By Jim Bruene Posted on
Categories: Citibank, Deposits, Checking, Savings, CDs, Website Usability & Design

Usually, when designing targeted offers, you focus on what you know about the prospect. Where do they live? What products do they use? What's their balance? What if you wanted to offer a product only to folks you know nothing about, such as new visitors to your website?

Suppose you had a hot APY offer you wanted to make only to new customers to avoid cannibalizing that cash cow, the passbook savings account. Using cookies, you could avoid showing the offer to online banking users, minimizing their awareness of the product.

Citi_esavings_homepageApparently, Citibank is using this approach. In a routine visit to Citibank's website in mid-April using our laptop, we were surprised to see advertisements for its 4.50% e-Savings account dominating the website (click on inset for a closeup). When the high-yield product was announced (NetBanker March 29), many observers believed it was a stealth offer made through a new "Citibank Direct" entity.

But when we returned to the office, the offer had disappeared from the homepage. We had to click on the small "special offers" link to find it listed along with several other offers. Apparently, the cookies on our office PC, which identify us as a Citibank online banking user, triggered the website to load a different homepage. We confirmed this through testing on other PCs.

But before you use this tactic, realize it has significant drawbacks. First, it doesn't work with users who delete or disable cookies, estimated to be as high as 40%. Also, an online banking user visiting from a different location, or with a different browser, will also see your offer.

There is also the risk of your clever marketing being outed to the press and public, which may find the practice deceptive (see SmartMoney, April 2006). Finally, you may be teaching users to game your system, deleting cookies more often, entering different zip codes, and so on. This could hinder your ability to deliver targeted promotions to the customers you DO know something about.

—JB

Citi_google_citibankNote: Citibank isn't shy about putting the offer on Google, where it shows as the top paid result on searches for  "Citibank" (see screenshot right).

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SunTrust Introduces “Really Free” Credit Monitoring

By Jim Bruene Posted on
Categories: Credit Reports & ID Theft Protection, Deposits, Checking, Savings, CDs, Equifax, SunTrust

Suntrust_home_idtheft_1SunTrust launched a new checking account acquisition strategy built around free credit-report monitoring (see personal homepage right). And this is not a low-budget identity-theft "insurance" policy (see PNC Bank, NetBanker Feb. 3 and Washington Mutual, NetBanker, Nov. 7, 2005), but full-blown Equifax Credit Watch Silver costing $6.95/mo or $50/year at the Equifax website.

Credit Watch Silver includes:

  • Weekly credit-report inquiry and balance-change alerts
  • One initial Equifax credit report.
  • $2500 in identity fraud insurance with $250 deductible

How it works
SunTrust is offering the free monitoring on most of its checking accounts, including its standard $9/mo account that is fee-free with a $1500 minimum balance. The free offer is not available to "free checking" or "senior checking" customers. However, they can buy it for a discounted rate of $3.45/mo or $35/year, a substantial discount from the regular price of $6.95/mo.

Of course, customers will have to wade through relatively gentle up-sell pitches for Equifax Credit Watch Gold, which will cost customers $6.95/mo or $70/yr, about one-third less than the list price of $11.95/mo or $100/yr; or Gold with 3-in-1 Monitoring for another $30/yr. Also, customers that want to extend the Equifax Silver coverage to both members of a joint account will have to pony up an additional $35/yr.

Credit Watch Gold includes:

  • Daily credit-report inquiry and balance-change alerts
  • Unlimited Equifax credit reports
  • $20,000 in identity-fraud coverage with zero deductible

Suntrust_checking_withfreeidprotectChecking account customers must enroll for the free service at a co-branded Equifax website. It's a jury-rigged sign-up process that requires the use of an offer code that includes the customer's 13-digit SunTrust checking account number.

New customers must first open a checking account, then enroll at Equifax at least two days later. SunTrust offers online account opening, but there is no link to an online option from the credit monitoring landing page (click on inset for a closeup).

Analysis
This is an excellent value for SunTrust checking customers and could potentially have little out-of-pocket cost for the bank. The bank's costs depend on four factors:

  1. 1. How many checking customers take time to enroll for the free service
  2. How many of the enrollees elect to accept credit-monitoring upgrades
  3. How many enrollees opt to buy additional credit-report viewing during the course of the year
  4. How often a fraud situation involving a SunTrust account is thwarted due to the service

The only real problem with the program is that it is not integrated with online banking. The separate enrollment and sign-on make it a hassle to use (of course, this holds down the bank's costs). We expect other banks to offer similar programs during the next 12 to 18 months.

—JB

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Citi Markets e-Savings in Amazon Packages

By Jim Bruene Posted on
Categories: Advertising & Promotion, Citibank, Deposits, Checking, Savings, CDs

 

 

Amazon_box_1The new headphones for my son’s eleventh birthday arrived last week with the usual advertising fliers dropped into the Amazon.com box. One of the three products caught my eye, a 4×6 glossy sheet advertising Citibank’s 4.5% e-Savings account. Citi_esavings_amazonofferIt looked much like their online ads with a blue-and-white theme emphasizing the APY (see right).

9

 

 

 

On the back, four benefits were highlighted:

 

  • Free Online Bill Pay
  • Online Fraud Protection
  • Free Wireless Alerts
  • Online Statements and Check Images

Notice how the 13 words of benefits included “free” twice, “online” twice, along with the positive buzzwords “wireless,” “fraud protection,” and “check images.”
9
Citi_offersiteThe bank used an easy-to-remember URL <offer.Citibank.com> with offer code CSA2 (click on inset to see the Citibank offer site prior to inputting the offer code). The fine print contained the usual requirement that it was not available in Citi branches. Interestingly, the bank elected to forego the usual toll-free number option.

 

 

—JB

 

 

 

Marketing Database –

If you'd like to learn more about past interactive financial marketing campaigns, check out the Interactive Financial Marketing Database from our sister publication, the Online Banking Report.

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Citibank’s Forecast for Online Savings

By Jim Bruene Posted on
Categories: Citibank, Deposits, Checking, Savings, CDs, HSBC Direct, Metrics & Market Research

Google_onlinesavingsaccount In an effort to boost awareness of its 4.5% e-savings account (see NetBanker March 29), Citibank made the unusual decision to reveal its 5-year forecast for industry-wide sales of online savings accounts. In today's New York Times, Citibank.com director Catherine Palmieri made the following market size estimates:

$250 billion in 2006
$600 billion in 2010

To put the numbers in perspective, the 2006 estimate is approximately four times the total deposits of the two biggest direct banks, ING Direct and E*Trade. And it's about 4% of the total U.S. deposit market of $6 trillion.

Assuming Citibank is right and the online savings market grows at a compounded rate of 25% per year, it will represent 10% of today's total deposits or 8.5% of the total $7 trillion in total deposits 2010, assuming a 3% annual growth rate.

The article also said that HSBC Direct is on track to have 250,000 accounts by the end of this year.

Googling "online savings accounts" from a Seattle IP address today found Citibank in the number seven position. Here were the top advertisers (see inset above for closeup):

1. HSBC Direct
2. Emigrant Direct
3. Capital One
4. American Express
5. E*Trade
6. Alaska USA Credit Union (Seattle local ad)
7. Citibank Direct

—JB

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Wachovia’s “Free Checking” Marketing

By Jim Bruene Posted on
Categories: Deposits, Checking, Savings, CDs, Search Engine Marketing, Wachovia

Wachovia_google_resultsEveryone wants free checking. So it's no surprise to see Wachovia the top bidder on the term at Google (click on screenshot right). The bank also managed to snag the top organic listing (directly below the paid ads), a coup for its search-engine-optimization consultant.

Wachovia_landing_google_freechecking_1As much as Internet users love a good deal, they are skeptical when they see "free," especially when a company is spending money to advertise on the term. Wachovia wisely meets the skepticism head-on with a landing page entitled (click on inset for closeup):

Free checking. No catch.

 

The page also includes six bullet points, three of which relate to online banking. And there are two "Apply Now" buttons, at the bottom of the bank and the upper right.

Analysis
While this landing page won't win any Webbys, it's fundamentally sound. The first three bullet points meet the likely customer objections by affirming that there is no minimum balance, no monthly fee, and no direct deposit requirement.

Clicking on the Apply Now button leads to a page explaining the process and what's needed to apply. Unfortunately, the user is forced through three screens of disclosures, the last one a record-setting 69-screen monster before the application begins. With such a tedious first phase, the bank is losing most of its prospects before they've even entered so much as an email address.

To avoid massive application abandonment, you must get customers engaged in the application before the trip down disclosure lane. Wachovia also stumbles by offering too much product choice. The customer that started at Google looking for free checking is forced to choose from 12 checking account options on that same 69-screen testament to the power of a large bank's compliance department.

Grades:
A for search-engine marketing
B for landing page design
C- for application design

—JB

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