NetBanker 2009 Survey — Please Give Us Your Feedback

Feedback is important for improvement and reaching one’s maximum potential. That fact is why businesses have regular reviews for top employees, the best athletes have coaches and elite schools have grades. In order to be their best, people and businesses need to regularly receive criticism, suggestions, advice and ideas from others. We at NetBanker are no different.

So we’d love for you to take 5 (or less) short minutes to fill out our annual reader survey (it’s completely anonymous). This is your chance to tell us a little about yourself, what matters to you, how we can do better and more. Please help us serve you better by clicking the link below and filling it out right now:

If you’d rather give your feedback in a more personal way than this survey, please feel free to contact me at Thanks!

ericphoto.jpgEric Mattson is CEO of Online Financial Innovations, the parent company of NetBanker, Online Banking Report and the Finovate Conference Series. He can be reached at or 206-331-1178.

Online Banking Customer Satisfaction Remains High

Three substantial consumer studies were released this week. In total, more than 12,000 U.S. consumers weighed in on their banking satisfaction. All three projects came to the same and somewhat surprising conclusion:

Consumer satisfaction with banks and/or online banking has remained high, and relatively unchanged, despite the events of the past year.

I expected all the bad press, not to mention a couple trillion in bad loans, would drag down scores across the board. But apparently consumers are loyal to their primary financial institutions, or feel sorry for them, and continue to hand out high grades when market researchers come calling. That’s a bit of good news for the future of the industry.

image1.  Forrester’s The Experiences that Satisfy Consumers 2009 (post here) has an interesting comparison across industries and across channels (phone, in-person, and Web) and Web banking was the star of the study (note 2):

  • Banks had the highest satisfaction of all eleven industry categories (note 3) in the Web channel (84%). The low was 66% at health insurers and TV service providers.
  • Banks had the highest satisfaction differential between their online and telephone channels, with Web beating phone by 12 points (84% vs. 72%). The next highest was PC manufacturers with a 9-point differential, followed by Internet service providers at +8 points.
  • And surprisingly, given how much money is spent on branches, banks had the second-highest satisfaction differential between online and in-person, +5 points (84% vs. 79%). First place was airlines, with a 9-point differential. Third place went to wireless providers at +2 points. 
  • Banking was only industry to increase its Web satisfaction rate compared to a year ago
  • Only 2 channel scores beat banking’s Web satisfaction and both of those were in-person experiences: retailers (88%) and hotels (86%)

image 2. comScore’s annual state of the online banking industry (note 4, press release) found that overall customer satisfaction is relatively unchanged during past three years:

  • Percent of total customers who were “highly satisfied” of their primary financial institution
    2007 = 70%             2008 = 72%           2009 = 71%

image 3. ForeSee Result’s annual state of online banking (note 5, press release) found considerable growth in online banking satisfaction during the past 5 years:

  • Out of 100 points, here’s the scores for online banking:
    2003 = 73    2005 = 77   2007 = 78   2008 = 82   2009 = 83
  • Credit unions had the highest satisfaction in the 2009 survey
    Credit unions = 86    Community banks = 82  Large banks = 82

1. Forrester: Number = 4,500, fielded Q4, 2008; purchase here for US$749
2. Forrester broke out credit card issuers separately, but their Web and phone satisfaction rates were identical, so I’ve lumped them together to simplify the analysis.
3. The other categories: Airlines, health insurance plans, hotels, insurance providers, Internet service providers, investment firms, PC manufacturers, retailers, TV service providers, wireless service providers.
4. comScore: Number = 4,846, fielded last week of Feb. 2009
5. ForeSee Results: Number = 2,500, fielded March 3-18, 2009

Failure to Launch? Consumer Remote Deposit Posts Very Slow Growth

image_thumb10_thumb2Two-and-a-half years after USAA was first to offer remote deposit capture to consumers via standard scanners (post here), it appears the technology has failed to gain much of a following outside business circles (notes 1,2).

Quoted this month in Digital Transactions magazine (PDF here, pp. 58-62), John Leekley, founder of, estimates that only 75,000 consumers (and apparently 1 cat, see inset) use the service, less than 0.001% of all U.S. households.

Some other numbers from the article by Jane Adler:

  • After 14 months, EasCorp, a CUSO out of Burlington, MA, has just 24,000 registered users across its 30 credit union installations, or 800 per CU (see previous post)
  • Other EasCorp metrics:
    • Average deposited check = $900
    • Average deposits per session = $1,200
    • Total amount deposited in past 14 months = $80 million
    • At $900 per item, that amounts to about 90,000 checks processed, or about 4 per end-user
    • Cost per deposit for CU clients is $0.25 per item for “higher volume” customers
  • The initial experience at First Command Bank is more encouraging: Since launching in November, First Command Bank has registered 1,600 users for its Deposits on Command across its online customer base of 65,000, for a 2.5% penetration rate (note 3). First Command has a total of 85,000 customers online and offline, so the overall penetration rate is about 2%.
    • Total remote deposits per month are 1,200; slightly under 1 per registered user per month
    • There is no fee for the service, but you must be an estatement user or have an investment account to qualify. Daily deposit limit = $5,000

First Command Bank homepage (14 April 2009)
Remote deposit capture (Deposit on Command) is one of two items that rotate in the top banner-ad slot  image_thumb1_thumb1

1. We are referring here to CONSUMER remote deposit, not to be confused with the very successful business remote deposit.
2. In the same article, Fiserv was cited as projecting growth to 1 million users by the end of 2009, although there was no indication as to when the prediction was made or whether it included business users.
3. If Bank of America had similar usage, it would be well on its way towards 1 million registered users (625,000).
4. Photo from CheckFree/Fiserv

LinkedIn Users Prefer Online 8 to 1 Over Mobile Banking

imageIn a completely unscientific poll of 123 LinkedIn users I conducted about two hours ago, I found they overwhelmingly prefer the online channel over all others when accessing bank transaction data (see notes 1, 2, 3).

I was expecting mobile to be higher. But unless you have a new-generation smartphone and your financial institution supports mobile, it’s unlikely to be your first choice. So given that mobile’s only been widely available in the United States for about a year, a one-in-ten preference is a strong start. 

I also expected a bit more interest in the other choices: ATM, voice and social network, which only drew 3% of responses in total. Social networks went 0 for 123, showing that it’s not yet viewed as a place to review financial data (note 4), at least among LinkedIn users. In a much differently worded poll of Facebook users a year ago, we found that 13% willing to view their bank balance within the social network.

Q. All else being equal, how would you prefer to access bank transaction data?


Source: Netbanker/Online Banking Report poll of 123 U.S. Linked:In users who self-selected to respond to poll while logged in to Linked:In; fielded between 1 and 2pm on 1 April 2009 using in-network polling tool.

1. The question is strictly limited to 75 characters, I couldn’t make it as precise as I would have liked. For instance, I would have like to add “assuming its secure” and “your personal” to “transaction data.” It’s possible some respondents were thinking more about global banking data than their own personal transactions. The poll also displayed “by Jim Bruene, Owner, Online Banking Report” in the lower-left, potentially biasing results.
2. LinkedIn users are given opportunities to respond to polls while logged in to the service. There is no financial benefit to taking the survey, but they do get to see results after taking it.
3. There were significant differences based on demographics, for instance women were almost twice as likely to select “mobile.” And zero men, and 4% of women, chose voice call as the preferred method. But due to the small sample size, these demographic breakdowns don’t hold much weight. There also appears to be some mathematical errors in the demographic splits, so I’m not going to cite them further until Linked:in cleans up it algorithms.
4. An interesting result, given the poll was conducted within a social network among social network users. Actually, “the branch” beat social networks, drawing one “write-in vote” in the poll comments (it was not one of the five choices). 
5. For more info on mobile banking see our latest Online Banking Report on Mobile Banking 2.0 — iPhone Edition

Lending Club Regains Momentum, Posts 40% Gain in P2P Loan Originations Compared to Dec. 2007

image If you think your 2008 was stressful, imagine having to shut down for an extended and unknown period (it turned out to be 6 months) just 10 months after launch. Then spending hundreds of thousands of dollars on SEC paperwork that your major competitor avoided (temporarily it turns out), all the while watching that same competitor take your market share while you keep your mouth shut via SEC mandate.

That was Lending Club’s year. But unlike so many horror stories of the past year, this one has a happy ending, at least so far. Not only did Lending Club reopen for business Oct. 14 at our Finovate conference (demo video here), within weeks they had already moved ahead of last year’s origination pace (note 1).

As you can see in the table below, Dec. 2008 was substantially ahead of Dec. 2007 in all measures except average loan size and approval rate, which dropped a full 2 points:

  • Number of applications increased by 78%
  • Number of approved loans increased by 43%
  • Dollars originated increased by 29%
  • Average loan size approved declined by $1,000 (9.4%)
  • Overall approval rate was 8.5% last month compared to just over 10% a year ago

Table: Lending Club loan origination results: Dec 2008 vs. Dec 2007

Change % Change
Number of loans originated 238 167 + 71 43%
Dollars originated $2.28 mil $1.77 mil + $0.5 mil 29%
Number of loan applications 2,798 1,575 + 1,223 78%
Approval rate 8.5% 10.6% (2.1%) (20%)
Dollar value of all applications $24.2 mil $14.4 mil + $9.8 mil 68%
Average loan size approved $9,600 $10,600 ($1,000) (9.4%)
Average loan size declined $8,600 $9,000 ($400) (0.4%)
Site traffic (unique visitors) 78,000 58,000 20,000 35%

Source: Loan volume from Lending Club, site traffic from Compete, calculations by Online Banking Report, 8 Jan 2009

Here’s the monthly origination chart (in US Dollars) courtesy of who compiled the figures from data provided by Lending Club. 


Source:, 8 Jan 2009

Also, site traffic is up 35% year over year according to Compete. 


Source: Compete, 9 Jan 2009

1. The number/dollars of loans originated and applied for at Lending Club in Oct. 2008, Nov. 2008, and Dec. 2008 were all higher than the respective months in 2007. 

2. For more info on the market, see our Online Banking Report on P2P Lending.

Wells Fargo is Second Online Personal Finance Provider to Join the 1-million Club

imageIn April, we reported on the robust adoption of Bank of America's online personal finance manager, My Portfolio (see note 1), used by 10% of the bank's 25 million online bankers. The results are especially impressive given that it's a full-featured module accessible via online banking, but not particularly well integrated.

imageIn comparison, Wells Fargo offers a completely integrated PFM tool, My Spending Report, that's extremely simple to use, but offers limited functionality. On Oct. 29, the bank made an important improvement, adding a basic budgeting tool, Budget Watch, to what had been essentially a list of transactions divided by category.

The bank told me last week they have 1 million monthly users, making it the second online PFM provider to break the 1-million mark (after BofA). Wells has about 15% of its online banking base (note 2) using the tool, a slightly higher penetration than BofA. Again, not surprising considering how well it is integrated. The budget tools should boost penetration.

Who'll be the next one to join the 1-million club? Mint, with about 500,000 users in its first 15 months in business, is headed that way, possibly as early as late next year.  Chase/WaMu could get there in a few weeks, if they added online personal finance to their feature set. Quicken Online, now that it's free, should get there relatively quickly as well.

1. BofA's My Portfolio is powered by Yodlee.

2. Excluding Wachovia accounts.

Online Financial Services Scorecard: April 2008

Financial services scorecard April 2008

Looking at the data from Compete’s consumer panel, there were several significant swings in activity compared to a year ago (see note 1):

  • Credit card applications, up 37%
  • Checking account applications, up 28%
  • Home equity applications/leads (see note 2), down 34%
  • Refinance applications/leads, up 41%


  • Credit cards seemed to settle down after the large jump in March. Both shoppers and applicants were down 1% compared to March, but year-over-year applications were up 37% (in comparison, last month card apps were up 53% compared to a year earlier)
  • Deposit shopper volume stayed relatively consistent except for checking which saw a 9% increase. However, applicants for savings and high-yield savings dropped 17% and 12%, respectively. Last year, high-yield savings accounts were more in demand, with 50% more applications in April 2007 compared to April 2008. Declining interest rates appear to be impacting consumer demand. 
  • In the home-secured sector, there was more activity in the refinance sector with a 4% gain in shoppers and a 3% gain in applications compared to last month. Compared to a year ago, refinance apps were up sharply 41%. 
  • Purchase mortgage activity was flat.
  • Home equity showed a significant decline, with shopping down 8% from March and down 17% from a year ago. Application levels were flat compared to last month, but down 34% year-over-year.

About the Financial Services Scorecard
A year ago, we introduced the Financial Services Monthly Performance scorecard produced by Compete. It summarizes the overall performance of 23 large U.S. financial institutions and lead-generation sites. Refer here for the detailed methodology as well as companies tracked.

1. Year-over-year comparisons were added to the chart beginning in March. Because of ongoing methodology tweaks, the percentages in this table may be slightly different than if you went back to the data from a year ago and calculated the change. 

2. Leads/applicants = Leads or applications depending on whether the site being tracked is a lead-generation site or an actual lender.

Lending Club Files S-1, Prepares to Get Back into the P2P Game

image No one said it was easy being a startup, especially a “Web 2.0 lender” in the middle of major credit turmoil. Lending Club, which had to shut down the retail lending portion of its service in April, is preparing to put the second P back into its P2P loan service (see note 1).

A big part of that process is filing with the SEC so the company can sell retail securities backed by its loans. For lenders, it won’t be much of a change. The securities will be backed by the individual loans, just as if it were a standard loan. And at least initially, the securities cannot be resold. However, in the filing, Lending Club says it is planning on creating a secondary market for the securities through its platform. 

Lending Club posted an update on its website announcing the filing.

Lending Club discloses $500,000 monthly burn rate
Luckily for the company’s followers, and competitors, the S-1 filed Friday (20 June) sheds light on what would usually be known only to its investors and creditors, the privately held company’s inner finances. The company disclosed that during the fiscal year ending March 31, 2008, it experienced:

  • negative cash flow of $6 million
  • total net loss of $7 million on revenues of $450,000; the revenue total includes $200,000 in interest on deposit balances   

Lending Club itself is a significant lender on the platform
Another interesting disclosure: More than half the loans originated through the Lending Club platform have been funded by the company and its creditors/investors, even before it had to stop taking new retail loan commitments April 7.  That’s an interesting dynamic for a so-called person-to-person lender. Because Lending Club sets the market clearing rates, its funding did not compete directly with the retail lenders, i.e., Lending Club stepped in to help fund deals that retail lenders had not fully funded. However, had the company not put so much money into the system, borrower rates could have floated higher, potentially increasing lender yields (note 2).

As of June 10, 2008, only $6.4 million of the loans made through the platform have been to “retail lenders.” Later in the S1, Lending Club discloses that it has funded $7 million of the $15 million loaned through the platform as of March 31, and then $1.6 million of the $3 million loaned after March 31. That leaves Lending Club holding $8.6 million of the $18 million loaned through the platform.

The lending was financed primarily through loans from Silicon Valley Bank ($3 mil), Gold Hill Venture Lending ($5 mil). Also, through March 31, company insiders and investors had lent about $0.5 million.  

Other stats from the S-1
Other numbers (as of 31 March, 2008, unless indicated otherwise):

  • $1.8 million spent on marketing, of which $270,000 was advertising
  • $1.8 million spent on engineering
  • 23 full-time employees
  • Average loan amount per borrower is $9,100
  • Number of loans = 1,669 worth $15.2 million (through 10 June 2008)
  • 150,000 website visitors in March
  • Average amount lent per loan per lender = $75
  • 50% of loan volume has been through LendingMatch that automates the process
  • $8.9 million had been outstanding for more than 45 days and had been subject to at least one billing cycle; of that amount, 98.3% was current, 0.88% was 15- 30 days late and 0.87% was more than 30 days delinquent. No loans had gone into default which is 120+ days delinquent
  • On p. 48 is a detailed table of home ownership. job tenure, annual gross income and debt-to-income ratio by Lending Club credit grade

Loan purpose:

  • 50% refinancing high-interest credit card debt
  • 35% financing one-time events such as weddings, home improvements or medical
  • 15% small business financing

1. For more info on person-to-person lending see our Online Banking Report #148/149

2. I say POTENTIALLY increased yields. That would depend on whether the borrowers accepted loans at higher rates. And higher rates would lead to lower volumes, so even though interest margins would be higher, there could be substantially fewer deals. And that also increases the risk of adverse selection with only higher-risk borrowers accepting the higher rates.

Financial Direct Mail Drops 10%, Still Delivers 40 Offers to Every U.S. Household

image Did your recycling bin feel a bit lighter last quarter? According to Mintel Comperemedia, financial service direct mail was down 10% in the latest quarter:

Q1 2008:  4.2 billion pieces  Down 10%
Q1 2007:  4.6 billion pieces

Credit cards
Q1 2008:  2.6 billion pieces  Down 14%
Q1 2007:  3.1 billion pieces

I’d like to think that online marketing has turned the corner and is finally making a dent in traditional direct marketing. But it’s probably more likely that card companies, using stricter underwriting, simply had 14% fewer credit-worthy prospects. Plus, a few more people are opting out of snail mail (see note below).

Assuming 80 million credit-worthy households in the United States (out of 110 million total), the average household received 53 mailings in first quarter. If you are prime or alt-prime credit, you likely saw little-to-no change in your junk mail pile. 

Note: photo credit
Proving once again that you can find anything online, the picture above is from Jason Carter’s blog where he is collecting credit card offers. This is his first-quarter haul, 23 for his wife and 7 for him. While that is slightly below the national average, Jason has been actively opting out of direct mail offers, so it is not a representative example. 

Bank of America Reports 2.5 Million Users of My Portfolio, its Online Personal Finance Tool

image Two months ago we published a table (here) showing active users at the leading online personal finance startups. Below is the table, updated with March traffic and the addition of one more player: Bank of America.

The bank, which offers a full-featured online personal finance management solution called My Portfolio, powered by Yodlee, has 2.5 million active users, according to BofA exec Marina Moore (note 3). That's an impressive 10% of the bank's online user base, and about 6x the total user base of all the online startups combined (note 4). 

Company Users (1) % of Total March Traffic(2) Jan Traffic(2) Chg
Bank of America 2.5 million 86%
Mint 180,000 6% 160,000 150,000 7%
Wesabe 100,000 3% 28,000 41,000 (32%)
Buxfer 80,000 3% 8,400 9,200 (9%)
Geezeo 20,000+ 0.7% 8,400 14,000 (40%)
NetWorthIQ 13,000 0.5% 10,000 11,000 (10%)
BillMonk 10,000+ 0.3% 1,700 1,000 +70%
Expensr Five figs 0.3%+ 2,000 1,700 +18%
Total 2.9 million 100%      

For more information:


1. Users: per BusinessWeek Online, Feb 2008, figures are reported by the companies and may include inactive users; Mint has been updated to 180,000 from 130,00 based on new figures reported in the Bank Technology News article published in April 2008

2. Traffic: per Compete estimates of website traffic for March 2008, retrieved April 21, 2008. Compete estimates traffic from its online data and can be off by a factor of two or three-fold for smaller websites.

3. As reported in a Bank Technology News article published in April 2008.

4. This table does not reflect all the players, such as Intuit's new Quicken Online, just the ones highlighted in the BusinessWeek article.