Nobel Winner Calls for First National Bank of Innovation

image Perusing the newsstand at the Minneapolis airport last night, I picked up the latest Harvard Business Review issue entitled Reinvent. One article in particular prompted me to shell out the $16.95 for the double issue: Wanted: A First National Bank of Innovation by Edmund Phelps, a 2006 Nobel winner in economics, and Leo Tilman, a Columbia prof and author of Financial Darwinism.

Their case was laid out at the beginning of the article:

Ever since Alexander Hamilton, the U.S. economy has been about ideas, experimentation, and exploration: businesspeople imagining new concepts and launching new ventures; entrepreneurs engineering new products or methods based on new ideas; marketers conceiving of niches for new products or new niches for old ones; managers and consumers assessing novel products; and financiers with strategic vision judging which innovations to back.

The authors argue that it’s the funding of new ideas, not arbitrary pet stimulus projects, that really drives our economy in the long-term. And with credit and venture funding difficult to obtain, the government should step in with a new GSE (government-sponsored entity), their so-called First National Bank of Innovation, to help fill the funding gap.

My take: After the recent debacles with the major GSEs, Fannie and Freddie, I’m not so sure that we need more taxpayer guarantees on our nation’s books. But the economy would probably be better off long-term if some of the money flowing to housing and roads was invested in entrepreneurial-driven activity.

But, I’m not about to get involved (again) in telling the government what to do. Instead, I’d rather see the private sector step up and implement the ideas presented by Phelps and Tilman. Why not create your own in-house Bank of Innovation, where local startups could go for support, banking services, and help in finding financing. Umpqua Bank has been trying some interesting things in this area (see Umpqua Lab screenshot below).

Pulling ourselves back up from The Great Recession is no easy task. And banks, rightly or wrongly, are currently seen as part of the problem. Wouldn’t it be great if people started seeing the financial industry as part of the solution? That’s a New Year’s resolution I think we can all get behind.

Umpqua Bank labs microsite <> (6 Jan. 2010)


Note: See our recent Online Banking Report for more ideas on how to serve small- and micro-businesses through the online and mobile channels.

Out of the Inbox: Upbeat Customer Email Message from Umpqua Bank

image I recently opted in to the Umpqua Bank email list. And even though I’m not a customer, I received an upbeat message this morning from bank president Ray Davis (screenshot below).

This email appears to be geared towards businesses (see the closing line below). And that makes sense because I’d recently been looking into its business social network (note 1). But the message is on-target for consumers as well.

The well-written 185-word letter covers three main topics:

  • A cautiously optimistic message about the overall economy
  • Some tangible evidence (new banking division, new lending teams, new capital, and 20,000 hours of community service) that the bank is a forward-moving survivor
  • Reassurances to customers that they were well-capitalized and moving closer to repaying TARP money

The tone was completely soft sell. There is a link to its online switch kit at the bottom and links to its LocalSpace business social network and Twitter feed (note 2) on the right. It’s more “we’re in this together” than sales pitch and closes with this wonderful line:

As we wrap up 2009 and look ahead, I encourage you to commit to the spirit of recovery and take action that positions you for the future.

We recommend that every other well-capitalized bank and credit union send a similar message before the holidays. We are about to move into the annual “year in review” exercise in the media, and this year’s 100+ U.S. bank failures will be high on the list. Remind your customers, members, employees that you are still a vital member of the community. And that for every financial institution that went under, there were a 100 like yourself that did not. 


1. For more info on the small-business market, see our latest Online Banking Report: Small Business Online & Mobile Banking.
2. Umpqua dreamed up one of the most compelling reasons we’ve seen to follow a bank, or any company for that matter, on Twitter (with the possible exception of the tweeting bakery): updates on its truck handing out free ice cream (Umpqua Twitter page).

New Online Banking Report Published: Serving Small Businesses with Online & Mobile Banking

image Since we began publishing Online Banking Report in 1995, we’ve taken a deep dive into the small- and micro-business online banking market five times. The latest was published yesterday (here). Online Banking Report subscribers can access it now as part of your subscription  (note 1). Others may purchase it for US$495 (abstract here).

Small business banking is one of my favorite subjects. It’s near-and-dear to our hearts because we’ve experienced first-hand the frustration of trying to manage our business with neither the resources, nor frankly the interest, to tap sophisticated business-management tools.

So, we’ve hobbled along over the years using Word, ACT, Excel, Microsoft Money, a hand-written ledger, and a moderately customized ecommerce back-end on our website. But we’ve clearly paid a price (note 2) for our lackadaisical approach to business finance.  

The reason I share our foibles is to point out the need for banks (note 3) and others to look at the opportunity more broadly. You can do so much more than simply help small businesses manage their checking accounts and credit lines. It’s the day-to-day business drudgery, billing, account receivables, record-keeping, tax prep, payroll, compliance, and so on, where small and micro businesses really need help.

As I’ve said many times over the past decade, I’d gladly pay $500 per MONTH for an online, small-business financial management service that handled ALL our needs. Ultimately, it would save us thousands per year, while delivering much more timely info about the health of our business.

Our latest report is a true product-manager’s guide to small-business product/service development with 76 pages of ideas plus examples from leading banks worldwide. We tie it all together with detailed descriptions of four levels of small-business package accounts (starting on p. 45 in the OBR Small Business Report; note 4):

  • Virtual Checking Account: A transaction-oriented service priced at $25 or so per month
  • Virtual Business Manager: Organizes most financial management duties for $50 to $100 per month
  • Virtual CPA: Handles most business-management functions including customer relationship management and billings for a monthly fee of $100 to $250
  • Virtual CFO: The works for $500+ per month

The report also includes data on the size of the U.S. market and a forecast for online banking usage for the next 10 years.

1. Printed copies will be mailed late next week.
2. According to our accountant, we’ve spent well into five-figures more than necessary, mostly in extra taxes. Then again, we’ve avoided paying bookkeeping and software expenses that could have been just as high. 
3. Why do I think this is an opportunity for banks and credit unions, when it is outside of their core deposit and credit offerings? Very small businesses have neither the time nor resources to search for solutions, and then perform the due diligence necessary to determine whether the solution provider or professional services firm is trustworthy. On the other hand, while business owners may not always hold their bank in the highest regard, they at least trust them to safeguard their info. An army of regulators and class-action lawyers makes sure that the bank does not take its fiduciary responsibilities lightly. 

But few financial institutions will look to build sophisticated financial management features in house. Most will look to outsiders, both startups such and established bank-tech firms such as Intuit, to build and maintain the business-management features.
4. See also, our recent post on small-business dashboards. 

The Missing Link for Small Businesses: Banking, Finance & CRM Dashboard

I finally finished our latest report on small business online banking last night. Just as I was about to upload it, I realized there was something missing in the “dream online banking solution” for small businesses.

So I stopped the “presses” and added it to the report. What was the missing piece? A financial and business management dashboard integrated with online banking.

I poked around the web today and found a few interesting products (see update below), none of which were quite what I was looking for, and had no direct connection to financial institutions:

  • image MyBizHomepage has a dashboard that integrates with QuickBooks and sounds pretty slick. But there website hasn’t been updated for more than a year, so not sure if this is a viable business or just a hobby site. I have an inquiry in to the owner.
  • image DreamFactory Software also offers QuickBooks-integrated dashboards. I found it in the new Intuit App Center for QuickBooks add-ins (here). It’s a powerful program, but not the kind of plug-and-play dashboard I’m looking for.
  • image iDashboards: Has impressive sample dashboards to view. None integrate directly with online banking, but many include financial data (see screenshot below).

So I’m still looking for financial institution examples. Know any? Comment below or email me. It’s too late to make our report, but we’ll report it here.

iDashboards mockup of a healthcare “billing scorecard” (link, 28 Oct 2009)


Update (29 Oct 2009):

Here’s another QuickBooks dashboard from


Cascade Bank Has a Business Banker Directory on its Website

image Isn’t business banking supposed to be all about the people? Then why don’t financial institutions use their websites to publicize their business banking talent? None of the several dozen business banking sites I recently reviewed allows prospective business clients to connect with an actual human being in advance of calling or emailing a general number for more info.

The only bank I’m aware of that actually puts its business bankers on its website is Cascade Bank headquartered in Everett, WA, a few miles north of Seattle. The bank has posted the following info for years (see screenshot below):

  • Headshot
  • Name, title, location
  • Short mission statement/bio (note 1)
  • Phone number and email address

That’s a respectable start. But with today’s virtually free Web-based tools such as Twitter, blogs, and Linked:In (note 2), every business banker should have their own online presence. Sure, the bank or credit union will need to provide guidance and oversight, but it’s not like these sales folks don’t know how to put their best foot forward.

Cascade Bank Commercial Banker Directory (link, 20 Oct 2009)


1. Unfortunately, the bio area is blank for 3 of the 12 business bankers listed. That looks pretty bad, especially with 2 of the first 3 blank. Come on Lar, Cynthia and Patrick, get those bios over to marketing ASAP.
2. Those Cascade listings would look much more impressive with Linked:in links by each name.

Last Day to File Extended U.S. Income Tax Returns, Why Doesn’t Anyone Remind Me?

image If you are like me, you put off filing the dreaded 1040 as long as possible, and may often have no clue that the final due date (for extended returns) has snuck up on you once again. Then there are those quarterly filing dates that aren’t spaced three months apart (see screenshot; note 1). 

That’s why every financial institution that serves small businesses and the self-employed should do three things:

  • Post the IRS due dates on its website (see screenshot)
  • Provide email/text reminders (opt-in naturally)
  • Blog/Twitter them

Small biz accounting startup (a Finovate 2009 presenter) is ahead of the curve with its handy Self-Employment Tax Calendar:


1. I’ve been paying quarterly estimated taxes for 15 years, and thanks to the calendar, this is the first time I realized they were spaced 3-2-3-4 months apart. No wonder, I can’t remember. 

Intuit Offers Low-Cost Online Accounting via QuickBooks Free or Basic

imageI was poking around the various small business online accounting sites today researching our next Online Banking Report and thinking about which service would suit our business, given that Microsoft is pulling the plug on Money.

I was already familiar with (a Finovate 2009 presenter; demo video coming soon), FreshBooks, and LessAccounting. But I was completely surprised by one contender in the free category: Intuit QuickBooks Online.

The software giant offers three flavors of online-only accounting (see screenshot below; full comparison here):

  • QuickBooks Online Free: Create and send invoices, print checks, track money flow for up to 20 customers and run basic reports; even includes email support
  • QuickBooks Online Basic: In addition to the above, for $9.95/mo, users can manage an unlimited number of customers, set permissions for others to access data, and choose from a library of 40 standard reports
  • QuickBooks Online Plus: Full-fledged QuickBooks for $34.95/mo, mimics most features of QuickBooks Pro (see comparison here)

Financial institution opportunities:
All four online accounting companies offer free versions and premium fee-based options (note 1). Consider linking to them from your small business resource center. For extra credit, develop a co-branded version you can offer your customers or negotiate discounts for the fee-based versions.

Intuit’s QuickBooks Online product line (14 Oct 2009)


1. is currently free for all users, but says it is working on value-added, fee-based options.
2. For more info on the small biz space, see our Online Banking Report: Small & Microbusiness Banking (June 2004). Note: Anyone who purchases the 2004 version now, will automatically receive the newer version when it’s published later this month.

Bank of America Promotes Small Business Online Community at Logout

image Logging out from my Bank of America credit card account (both personal and business accounts), I was greeted with this pitch for the bank’s small business community (see first screenshot). The pitch is straightforward and emphasizes three benefits:

  • Get answers to your business questions
  • Exchange ideas with other entrepreneurs
  • Free

Clicking the red Join Today button drops users onto the Forums page at the small business site (see second screenshot).

Bottom line: The logout effort is a good brand-building exercise for Bank of America, and it should drive much-needed traffic to the site. According to Compete (see chart below), in August the small business community site had an estimated 70,000 unique visitors, two-thirds more than the 40,000 a year ago. But traffic was down almost a third from the springtime peak.

Bank of America logout screen (23 Sep 2009, 4 PM Pacific)


Landing page (link)


Compete traffic estimates, Aug 2008 through Aug 2009 (link)


PNC Bank Does a Great Job Packaging Business Banking Benefits into its CFO Account, but Misses Mobile

imageToo often we don’t give online business banking the coverage it deserves, both here and in Online Banking Report (note 1). Online services can be far more valuable for a business customer than for the average consumer. But consumer services, with bigger advertising budgets and much more press coverage, tend to be more visible when we search for examples of financial innovations.  

image That’s why I was especially intrigued with the PNC Bank ad in the Aug/Sep issue of BusinessWeek SmallBiz magazine. Not only had PNC Bank shelled out for a full-page ad (p. 20, see inset; note 2), the creative was interesting and included a tease for the CFO product combined with easy-to-recall URL <>.  

The new account, cleverly dubbed PNC|CFO, an acronym for Cash Flow Options, covers all the major headaches of business owners:

  • Accelerate accounts receivable
  • Improve your outgoing payments
  • Invest your cash wisely
  • Access information online
  • Ensure access to cash (note 3)

Naturally, I was most interested in the second-to-last bullet, online information. The audio-visual online banking demo is thorough, but surprisingly neglects mobile banking services. The only mention of mobile banking is at the end of the last paragraph on the online banking landing page. With business owners increasingly tethered to their businesses via Blackberry or iPhone, mobile capabilities should be front-and-center. 

The other thing missing from the web-based marketing: a human connection. The main call-to-action is the big orange Contact Request button (see screenshot below). Presumably a biz banker will quickly get on the horn and make that connection. However, the bank should make it clear that they have a bevy of qualified bankers available to usher new clients into the CFO account.

Simply changing the button to Contact a Business Banker would be an improvement. But I’d also like to see a bullet point that talks about customer  service. The only thing I saw was a few generic screenshots in the online demo which talked about responding to most questions “within 24 hours.” That doesn’t make the reader feel particularly special.

Finally, a small rant about the bank’s contact form. I received error messages the first three times I attempted to submit it. Evidently, commas are not allowed in the company name or address fields. That not good programming and creates a needless poor first impression. There’s is also no space in the form for comments from prospective customers. PNC Bank has been on the web for 14 years, it should have flawless forms (note 4).

Grade: Overall, I really like what PNC is doing so I’ll give the marketing site an A for design and B- for execution.

Landing page for PNC’s Cash Flow Options service (link, 19 Aug 2009)


PNC new account “contact me” form with error message


1. Our last report on Online Small Business Banking is available here (June 2004).
2. Key Bank (p. 9) and Bank of America (p. 29) also bought full pagers.
3. The bank is referring to credit lines and loans; I’m not sure why they didn’t state that more clearly. Access to cash sounds more like a checking account feature.
4. While I’m at it, here are a few more minor flaws: (a) Even though I made two errors in the form, the error message only identified the first one; (b) When an error is made, the form automatically clears the checks in the bottom column of boxes; (c) The bank has neglected to turn off auto-fill (at least in Firefox 3.0) in the “confirm your email” field. 

Pitney Bowes Goes After Remote Deposit Capture Market with Email to Postage-Meter Clients

image Pitney Bowes (PB) hit me with a cross-sale message this morning, and surprisingly it was for a banking service, remote deposit capture (see email below). Because we already do ACH transactions through PB to load our postage meter, it’s something I would consider buying from them, especially since our business bank does not offer RDC.  

The service called Click Deposit (note 1) works with any bank or credit union checking account and is powered by Jack Henry ProfitStars. The cost runs $39.95 to $149.95 per month, depending on volume. You get up to 150 monthly scans at the lower level and 1,000 at the high end. Buyers must sign a nine-page contract (PitneyBowes_RDC_app.pdf), committing to the service, and leased scanner, for 36 months.

Because I don’t want to lock us in at $500/yr for three years, I think we’ll pass on this deal. Hopefully, we’ll be able to tap a lower-cost iPhone-based service in the near future, such as that offered by WV United FCU (see previous post).  

Email from Pitney Bowes (22 July 2009, 9:36 AM Pacific)


Landing page (link)


1. Although, Jack Henry announced the relationship in May (press release), I found no mention at the main Pitney Bowes site ( or the services site (, so this may be a marketing test.  

Xpenser Masters Mobile Expense Input


Launched in Oct. 2007, Xpenser (see note 1) is a financial tool designed for tracking items for business expense reports. Monthly traffic is about 6,000 unique visitors according to Compete.

To understand Xpenser, visualize how Mint works, then think of the opposite.

  • Mint is full automated; Xpenser is all one-off data entry.
  • Mint has graphics that will blow you away; Xpenser has lists.
  • Mint requires you to divulge your banking usernames and passwords; Xpenser just needs your email address.
  • With Mint, you can track your bank accounts, investment accounts and net worth; Xpenser only helps you submit your next expense report.

Xpenser’s mission from its website:

We were fed up with how painful expense reports and tracking were. After many experiments we found a workable solution: record expenses as soon as they happen and forget about them.

How it works
image After a registration process that requires no more than your email address, you can begin immediately submitting expenses to the service via:

  • Email by sending a message to with the free-form expense listed in the subject line
  • iPhone optimized site (see inset); it’s not in the App Store, but you can add an Xpenser button to your iPhone by navigating to the Xpenser website and pressing the + button
  • SMS by sending a text message to 66937 (MOZES), using “exp” followed by the free-form expense description
  • Voice via Jott or Dial2Do (both free services)
  • Twitter via direct message from your registered Twitter account
  • IM via Yahoo Messenger, AOL Messenger, MSN Messenger, or Google Talk
  • Browser search box in Firefox or IE 7+ (see below)
  • Secure website via standard input form

Once the expenses are collected, users go online and move each expense to the appropriate report. Transaction amounts and descriptions can be edited.

The company is building open APIs, so developers, including banks, can use the service to kick-start their own personal finance tools. The company says it will build premium fee-based versions with long-term archives along with other features.

Xpenser competes directly with Expensify (see note 2), a company that will be demo’ing at our upcoming FinovateStartup conference.

Data entry via the browser search box
Although, it’s not a core piece of the program, I was perplexed when I saw that one of the methods of entering expense data into your Xpenser account was through the “search box.” That was probably what convinced me to sign up for the account.

Here’s how it works in Firefox (also works in IE 7+ and any browser that supports OpenSearch):

  • Navigate to the Xpenser website
  • Click on the drop-down area next to the browser search box
  • Add Xpenser as a “search engine”
  • Then simply type the expense amount and description in the search box making sure that Xpenser is the selected as search engine (see second screenshot below), and press enter; Xpenser recognizes your account through cookies and adds the “search term” to your data file

That feature is so clever, it’s almost creepy. I’m not sure a bank would want to use this feature since it could capture any search term the user inadvertently input while the bank’s “search engine” was selected in the browser search box. 

Xpenser main account page (30 March 2009)


Input via the browser search box (30 March 2009)



1. Not to be confused with FinovateStartup alum, Expensr, now part of Strands.

2. Expensify has abandoned the decoupled debit business model it was using when we wrote about it’s launch last fall (previous post).  It now offers the choice of a prepaid MasterCard or an American Express-issued card.

3. For more information, see our Online Banking Report on Personal Finance Features for Online Banking and our Online Banking Report on Social Personal Finance

EFT Network Inc. Launches Remote Deposit Capture via Fax

imageRemote deposit capture (RDC) via mobile phone has to be the coolest way to make paper checks disappear from your office and reappear in your account. But from a usability standpoint, it leaves something to be desired, limiting its appeal to geeks with a check to deposit every once in a while. 

Businesses with several checks or more every week need something more convenient and easy to use. Proprietary scanners connecting to PC-based software apps work well, but require installation and training, not to mention $30+ per month in service fees.

image Enter FAXTellerPLUS, a new solution from Hawthorn, NY-based EFT Network, that uses the common fax machine for the input mechanism. The bank runs the software on its end freeing the user to get back to their business once the fax transmits.

Today’s press release says the four banks using the system are processing “thousands of transactions per month.”

How it works:

  1. Bank sends customers a special sleeve that holds up to 3 checks to be transmitted and includes info on the customer so deposit can be directed to the correct account.
  2. Customer transmits the check (front and back) to the bank via standard fax machine.
  3. Bank sends confirmation back to customer via fax or email.
  4. Funds are deposited in customer’s account and images viewable online.

If this works as billed, it could put RDC into the hands of micro- and small-businesses as well as consumers with access to fax machines at home or work. If any readers have used or tested the system, please let me know your experience by commenting here or emailing.