Compete Reports an 8% Monthly Increase in Online Credit Card Applications, But 23% Decline from 2008

imageFor card issuers, the latest online application activity is is either good news, bad news, or neither since Compete tracks only applications submitted, not approvals. This following chart was presented in its webinar today. You can request the entire deck at the bottom of its blog post.

According to Compete, there were more than 12 million credit card shoppers in the U.S. in December, up 6% from November and down 11% since a year ago. Of the shoppers, about 20%, or 2.4 million submitted an application. That was an 8% increase from Nov., but a 23% decline from a year ago. 

But Compete has no way to measure whether the card applications it tracks are approved. Recent data from Lending Club shows that less than 10% of its online consumer loan applications were approved in Q4. The big credit card issuers probably do a bit better by driving creditworthy borrowers to their sites via direct mail and online advertising.

Assuming approval rates of 20%, the 2.4 million credit apps in December resulted in about a half-million new accounts.  


Source: Compete, 29 Jan. 2009

New Online Banking Report Available: Ten-Year Online & Mobile Banking Forecast and 2008 Recap

image The latest Online Banking Report: 2009 to 2018 Online & Mobile Banking Forecast is now available. It was mailed yesterday to subscribers. It’s also available online here. There’s no charge for current subscribers; others may access it immediately for US$495.

The report includes our latest 10-year online banking and bill pay forecast. This year we again bumped our long-term usage forecast to 6%, up from 3%, to reflect a more robust outlook for adoption, primarily from mobile-only users. For example, we are now projecting 71 million U.S. households banking and/or paying bills online by 2013 compared to last year’s forecast predicting 66 million for the same period.

Mobile banking (see note 1) access is included in the overall online banking numbers, but it’s also shown as a separate line item. Based on the new open-platform standards ushered in by the iPhone and App Store, we increased both our short- and long-term adoption forecast by 10% to 20%. For example, by year-end 2011 we now predict there will be 18 million U.S. mobile banking households. A year ago we forecasted 16 million.

We also included a revised forecast for U.S. peer-to-peer lending. We cut back our short-term estimates by more than 50% due to regulatory and economic constraints on the business. A full 10-year forecast is included in the report.

Top ten innovations & trends of 2008
The report also includes a summary of the top ten innovations of the past year including the surge in mobile banking demand and the marked increase in traffic to personal finance speciality sites such as Mint and SmartyPig.  

1. A mobile banking household is one where someone has used a mobile device to access bank or credit card account info within the past six months. Includes text-based queries, but not simple broadcast alerts.

neoSaej’s MoneyAisle Generates $100 Million in Deposits in Q4 2008

image It’s so refreshing to have some real numbers to go on, even if they are self reported. Aside from Prosper, Lending Club (here), and most recently SmartyPig (here), few of the startups we track provide meaningful metrics on their operations. That’s why we use Compete website traffic estimates as a proxy for success.

Yesterday, MoneyAisle, the reverse-deposit-auction marketplace from neoSaej, released the following results for fourth quarter 2008 (press release): 

  • $1.65 billion in auctions run by consumers, up three-fold from Q3 2008 (note 1)
  • $100 million in deposits generated

That’s not a lot, but we can make a few estimates from that info (note 2):

  • Assuming 80 active bank partners, the average take per bank in Q4 was $1.25 million
  • But applying the 80/20 rule to those results means that 16 banks generated about $80 million in deposits, or $5 million each
  • And conversely, the remaining 64 banks brought in just $300,000 each
  • Assuming the average deposit balance auctioned was $20,000, five thousand separate auction winners funded a deposit
  • Assuming a commission of $37 per funded auction (note 2), neoSaej would have generated $185,000 in commission income in Q4, this is in addition to license fees and monthly maintenance fees

And for those of you who still want traffic numbers, MoneyAisle’s website usage (monthly unique visitors) has been trending upwards after suffering a post-launch dip in November. In December, visitors totaled just under 20,000. 


Bottom line: It’s a promising start for the company which earned an OBR Best of the Web this summer, was picked by the audience as Best of Show in October’s Finovate (video here), and was recently chosen as a top-10 innovation of the year in our most recent Online Banking Report (here).

When MoneyAisle adds integrated online account opening (powered by Andera), results should be even stronger. 

1. Deposit-generated total is 6% of total auctions run, because consumers are not obligated to make the deposit after they run the auction.

2. My speculative estimates, not provided from the company.

3. We outlined the company in a June blog post and in the pages of our Online Banking Report on New Models for Lead Generation and Online Banking Report on Growing Deposits in the Digital Age

Out of the Inbox: SmartMoney Uses Simple 3-Question Survey to Engage Customers and Solicit Feedback

image Engaging users doesn’t have to to be a long and drawn-out process with multiple passes through legal and compliance to ensure you won’t end up on the 10-most-wanted list at the OCC.

All you have to do is ask customers a question now and then to show that you are genuinely listening. And with low-cost web-based surveys, the cost to conduct a short survey among your own customers is minimal.

Some sample questions:

  • What should we write about in our next newsletter/blog/website?
    (provide list of ideas plus write-in area)
  • Which offer should we put on our homepage?
    (similar to the SmartMoney example below)
  • Where should we locate our new ATM? (with list of choices)
  • How would you rate your recent experience with our call center?
    (sent shortly after a customer talks to a CSR)
  • How would you like to retrieve your balance on your cellphone (via text message, via mobile browser, via voice)

In a real-world example today, SmartMoney Magazine sent me an email (see below) requesting that I complete its “cover survey” which would take “no more than a minute.” The Survey Monkey-powered survey was indeed just 3 questions and took only seconds to complete. There was no marketing (see note 1), no cross sales, and I was left with a better impression of the magazine. Besides a satisfied customer, SmartMoney gains valuable editorial feedback.


1. After completing the survey I was dropped on to the SmartMoney homepage increasing its pageviews and unique visitor totals for December.

2. Photo credit (via flickr): Ryan McFarland at

Peer-to-Peer Lending Volumes Worldwide

image Industry blog, recently compiled a list of peer-to-peer  loan volumes from around the world. The chart is reprinted by permission below.

These numbers are cumulative, all-time volumes since inception. More than half is from Virgin Money USA which has helped individuals put $370 million in loans together since it began as Circle Lending in 2001.

Because these companies don't all use the same model, I've revised the tables somewhat, excluding: 

  • Facilitators: My definition of peer-to-peer lending excludes Virgin Money and Loanback because they do not serve as matchmakers (note 1). They do play a crucial role in putting a legal framework in place for friends-and-family loans and often end up servicing the loans as well. They are more like PayPal where Prosper/Lending Club are like eBay.
  • Microfinance markets: I would exclude Kiva as well. It's an awesome platform that allows U.S. citizens to loan money to third-world merchants at zero interest. A powerful tool for philanthropy, yes, but not really peer-to-peer. The same goes for MyC4 and Microplace.

So excluding the above companies, total worldwide originations are $262 million, with two-thirds of that from Prosper.

Here are the market shares of the 8 true P2P lenders that have originated more than $1 million since launch:

Company US$ (mil) WW Share
Prosper (US) $178 68%
Zopa (UK) $39 15%
Lending Club (US) $20 8%
Money Auction (Korea) $7.8 3%
Smava (Germany) $5.8 2%
Zopa (Italy) $4.3 2%
Boober (Netherlands) $3.1 1%
Other $4.5 2%
Total $262 100%



Source:, 28 Oct 2008

1. This does not mean I dislike Virgin Money's business model, just that its loan volume is not comparable to the others on the list.

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

Online Personal Finance Traffic More than Doubles; PNC Virtual Wallet Grabs Second Place

image As I was drilling into the latest Compete traffic numbers for the annual Online Banking Report planning issue, I noticed a significant uptick in traffic to online personal finance specialists, almost across the board.

Sept. traffic revealed a total of 1.2 million unique visitors (note 1) compared to less than 400,000 a year ago. Not surprisingly, consumers appear to be taking a closer look at their finances. 

The big three newcomers last year: Mint, Wesabe, and Geezeo saw combined traffic increase by 450,000 users, a nearly three-fold increase from 2007. Geezeo was the star percentage-wise, growing more than six-fold. But Mint accounted for three-fourths of the net gain across the existing players with 330,000 more visitors (see Table 1 below):

Also, two newcomers made a big splash last month:

  • PNC Virtual Wallet launched in July (coverage here) by PNC Bank, which trailed only Mint last month with nearly 140,000 unique visitors (see 2 below).
  • Rudder (a relaunch of Spendview) drew 50,000 visitors last month after its launch at DEMOfall in early Sept.

Granted, the PNC Virtual Wallet benefits enormously from the 2 million monthly visitors to parent and Yet, it’s still an impressive total and is encouraging for banks and credit unions considering similar efforts.

Table 1: Online PFMs launched more than 1 year ago

  Sep 2008 Sep 2007 Gain ’08 vs. ’07 Multiple
Mint 530,000 200,000 330,000 2.7 x
Geezeo 72,000 11,000 61,000 6.5 x
Wesabe 89,000 33,000 56,000 2.7 x
Yodlee 97,000 50,000 47,000 1.9 x
Finicity/Mvelopes 91,000 73,000 18,000 1.2 x
Buxfer 9,000 3,500 5,500 2.5 x
PearBudget 6,300 2,100 4,200 3.0 x
ClearCheckbook 6,200 2,800 3,400 2.2 x
BudgetTracker 12,000 12,000 0 Flat
  Total 910,000 380,000 530,000 2.4x

Table 2: The online PFM class of 2008

  Sep 2008 Sep 2007 Gain
PNC Virtual Wallet 140,000 0 140,000
Rudder 50,000 2,000 (1) 48,000
Expensify 9,600 0 9,600
GreenSherpa 6,300 0 6,300
RateSurfer 4,400 0 4,400
Thrive 3,500 0 3,500
Expensr 2,900 0 2,900
Banzai 2,700 0 2,700
iThryv 2,000 0 2,000
220,000 2,000 220,000
Grand Total 1.2 million 380,000 750,000


1. Sum of the monthly unique visitors from all PFM companies, visitors that went to more than one PFM provider are not eliminated from the total, so there is double counting in the totals. Data source is Compete, pulled 21 Oct 2008.

2. Rudder was previously Spendview, but we consider them to be essentially a new company.

Online Financial Services Scorecard: June 2008


The June financial shopping numbers released by Compete revealed a mixed bag as interest in credit cards, home equity, and purchase loans fell double digits compared to a year ago. However, deposit activity moved in the opposite direction.

More specifics:

  • Although credit card application volume was relatively flat (down 1% for the year and down 4% for the month), the number of shoppers decreased 39% compared to a year ago. Although the data shows only application volume, there has likely been a sharp drop in approvals, as underwriting standards stiffen and credit-worthy applicants stay on the sidelines. 
  • In June there was a slight drop in checking shoppers (down 4%) and applications (down 5%) compared to May. However, year-over-year both were up with a 32% increase in shoppers and a 6% increase in applicants.
  • However, savings shoppers increased 51% from last year and 7% from May with applications up 43% compared to last year and 24% over last month.
  • High-yield savings showed similar gains compared to a year ago, with 31% more shoppers and 30% more applications. 
  • Home equity and purchase mortgage activity were both off compared to the previous month and also a year ago. The only good news was an increase in refi activity with 10% more shoppers than May and 27% more than a year ago. But application volumes were down 21% from May and down 34% compared to last year.

About the financial services scorecard
A little over 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 2008. 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 tracked is a lead-generation site or an actual lender.

Person-to-Person (P2P) Lending Update

image Now that we are well past the mid-point of 2008, it’s a good time to look at where we are with one of the most talked-about online financial subjects of the decade: person-to-person or social lending.

Currently, two U.S. companies are actively originating unsecured, multi-purpose P2P loans (note 1): 

  • Prosper: Through July, the leader in the market is running 10% ahead of its 2007 loan-origination pace. The company has funded $55 million and is on pace to do just under $100 million for the year. Website traffic is up 15% compared to a year ago (see graph below) and through July there have been 13% more loan listings (see previous coverage here, Finovate 2007 Best of Show video here; monthly volume reports here).
  • Zopa: The company, which isn’t technically person-to-person (the loans are originated by six credit union partners) but definitely has a social aspect to its loan program, has not revealed any numbers, but they list 475 loans on the “browse all borrowers page.” Assuming average loan size of $8000 to $9000, they are doing less than $1 million per month. Zopa is using Google AdWords to pitch “instant approval” with a credit score of 640+ (see screenshot below), an aggressive marketing move, especially combined with the 8.49% APR touted on the landing page (see screenshot below; previous coverage here; FinovateStartup 2008 Best of Show video here).

In addition, three more P2P lenders appear very close to launching or relaunching:

  • imageLending Club: The company, launched in May 2007, has been essentially closed to new business since March as they retooled loans into securities for regulatory reasons. However, the company is scheduled to present at our Oct. 14 Finovate conference, implying that they will be out of their quiet period by then (previous coverage here; Finovate 2007 video here).
  • Loanio: The startup appears to be very close to launching based on an a Sept. 3rd email sent to its house list announcing the launch “in just a few weeks” and adding in parenthesis (yes, we mean it this time!). The company will likely be the first to offer a co-borrower loan application (previous coverage here; Finovate Startup video here).
  • Pertuity Direct: The newest competitor in the space is Pertuity Direct which we wrote about last week. Its website claims a Sept. 15 launch, and we look forward to seeing their first public demo at Finovate on Oct. 14.  

Finally, several companies are looking to launch P2P services in 2008 or 2009, including Globefunder, Community Lend (Canada) and one we just heard about today, Swap-A-Debt.

Forecast revision
Last December we published our second detailed Online Banking Report on Person-to-Person Lending. In that report, we predicted just under $200 million in originations this year. However, due to the inactive period at  Lending Club, the delay in Loanio’s launch, and the more conservative approach by Prosper lenders, we are lowering the 2008 forecast by 25%, with an expected total of $135 to $150 million for the year as follows:

  • Prosper ($95 to $105 million)
  • Lending Club ($25 to $30 million)
  • Zopa ($5 to $10 million)
  • Loanio ($1 to $5 million)
  • Pertuity Direct ($1 to $5 million)

P2P lending traffic from Compete (July 2007 through July 2008)


Zopa AdWords ad on “loanio” search

(4 Sep 2008, 1 PM PDT from Seattle IP address)

Google results from "loanio" search 4 Sep 2008

Landing page
(4 Sep 2008, link here)

Zopa landing page from Google ad 4 Sep 2008

1. Specialists are involved in the student loan piece (GreenNote and Fynanz) along with Virgin Money and Loanback which help with person-to-person loan documentation and servicing. 

2. Top-right graphic from April 2008 ABC News segment on Lending Club and person-to-person lending.

Reward Checking Account Results: $5.5 billion Down, $2.994 Trillion to Go

Reward Checking banner at First State Bank (13 Aug 2008) In the year or so that they’ve been widely available, so-called reward checking, those high-yielding accounts that require a hefty number of debit card transactions (see note 1), have attracted quite a following.

image But besides the number of blog posts and press mentions, we’ve had few other metrics upon which to gauge their success. Until now. In an email to me yesterday, the company behind many of the accounts, BancVue, laid out the total rewards checking results across its client base:

  • 381 financial institutions live
  • 610,000 reward checking accounts
  • $5.5 billion on deposit in the accounts
  • $9,000 average balance
  • Opening more than 13,000 accounts per week (700,000 annual run rate)
  • Average of more than $14 million in deposits per financial institution
  • Average of 1,600 accounts per financial institution

Although $5 billion isn’t even the rounding error across the entire $3-trillion U.S. retail deposit market, it’s real money to the smaller banks and credit unions offering the program.  

1. Most accounts require 10 to 12 debit transactions per month in order to earn the high yield. For more info, see our previous coverage and Finovate Startup video here.
2. Upper-right graphic comes courtesy of First State Bank, Gainesville, TX.

Online Financial Services Scorecard: May 2008


May continued to show increases in both deposit and home-loan shoppers while demand for credit cards edged downward. On a year-over-year basis, almost all segments are down with the exception of home equity and home purchase.

  • Credit card shopping was down slightly (-1%) compared to April and down 7% in applicants. Conversion also declined 2% over the previous month.
  • Compared to April, deposits had big gains in both checking and savings shopping, up 8% and 5% respectively. 
  • Both savings and high-yield savings saw more than 20% gains in number of applicants compared to the previous month; however, both were down compared to a year ago.
  • Despite increased shopping volumes, home-secured lending, as measured by the number of leads and/or applications, dropped compared to last month. The largest was the 38% drop in refinance activity.
  • Conversion rates were down in all three loan categories, dropping 1% in home equity, 2% in purchase, and 4% in refinance.

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 2008. 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.

Bank of America Hits Two Milestones: One Million Mobile and 25 Million Online Users

image As expected, Bank of America reached the one-million-mobile-user milestone this week. Last month the bank disclosed it had 840,000 active mobile users as of March 31. With 160,000 new users in the past 9+ weeks, it appears that BofA has stayed on the 75,000/mo pace of first quarter.

Even more interesting to me was the news that the bank has "nearly 25 million" online banking users. That's 3 million more than the bank had last fall, an impressive 13% gain. Six years ago, there weren't even 20 million online banking households in the entire country (see note 1).

The bank also passed along a few other mobile metrics in today's press release:

  • 40% are using mobile for money movement (bill pay and/or funds transfer within BofA accounts)
  • 80% viewed transactions and balance data (leaving 20% who check balances only)
  • In May, the bank had 4 million mobile sessions, or 4.2 sessions per user/per month, assuming 950,000 active users
  • Two-thirds of mobile users are under 35, about 13% are age 35-44 and 20% are older than 45


1. Source: Online Banking Report: 2008 through 2017 Forecast