Verity CU Asks "What are the Ten Most Interesting Products of 2011"

imageI try not to ride the coattails of someone else’s blog post, but here I go doing it anyway, because it’s a great mid-year question.

Shari Storm, published author, Filene i3’er, and grand master financial marketer, asked the Internet to help her round out the list of ten most interesting (financial) products of 2011.

Here’s what she’s found so far (note these aren’t necessarily new in 2011, just interesting this year; parenthetical comments are mine): 

  1. Mobile banking (note 1)
  2. Mobile remote deposit capture
  3. Personal financial management tools
  4. Personal bookkeeping (e.g., Balance Financial)
  5. Rewards checking (including in-statement merchant-funded rewards)
  6. Mobile apps that encourage you to build your savings account
  7. Short-term fixed-rate second mortgages

For what it’s worth, in the comments I suggested (alpha order):

  • Anti-virus for your card charges (e.g., BillGuard)
  • Bill statement storage online (e.g., doxo, Manilla)
  • Buy online/pay offline services (e.g., PayNearMe at 7-11)
  • Mobile barcode scanning for shopping comparison
  • Tablet banking
  • Tween/teen banking/prepaid services

Give Shari some ideas here, so she won’t be mad that I’m stealing her post.

Notes:
1. Verity launched May 2 and already 1,500 of 25,000 members are using it (about 6%).

BancVue/FirstROI Launches Checking Finder

image FirstROI, a division of Austin, TX-based BancVue (previous coverage here) launched its CheckingFinder service June 2. FinovateStartup attendees received a sneak peak in April and rewarded it with a Best of Show award (video here). The innovative service helps consumers find the best BancVue-powered rewards checking account based on geographic location, APY, or total return (see second screenshot below).

How it Works
finovatestartup_bestinshow_2008The first challenge is getting customers to the site. FirstROI is investing heavily in Google AdWords to get the word out. For example, a search on “checking accounts” at Google today (note 1), displayed CheckingFinder in second place, trailing only BofA (see screenshot below).

As a relative newcomer to AdWords, the company’s bid price would have to be high to score the second slot over such big names as Schwab (#3), HSBCdirect (#4), Key Bank (#5), WaMu (#6), Chase (#10) and Wells Fargo (#11). CheckingFinder may very well be paying more than BofA, depending on how Google’s ad-positioning algorithm weighs its relevance.

image

Clicking the AdWords link results in a list of banks presorted by closest distance to the IP address used to search Google (see next screenshot). Unfortunately, the closest participating BancVue client, Altra Federal Credit Union, is 1043 miles away
(see note 2).

CheckingFinder from BancVue and FirstROI

You can also sort the results by rate (APY) or plug in an estimated checking account balance and ATM usage and have the results sorted by highest annual return
(see note 3).

After selecting the account you prefer, users land on a page that lays out the offer in more detail and includes a bright green “open now” bar at the bottom of the page and another open button in the webpage bullseye, the upper-right corner. The online account opening process is powered by Andera.

image

Summary
Overall, it’s a good “micro” search engine, helping users quickly find the best checking account from the company’s client base. The big downside from a consumer perspective is that it’s currently limited to just 60 participating BancVue reward-checking clients. It will be more effective if they can get more of their 400+ banks and credit unions on board.

While I think most consumers will understand that they are searching a subset of available checking accounts, I think BancVue should disclose a bit more about its relationship with the financial institutions listed. That fact is touched on in the About Us section, but the FAQs don’t address this, nor are there any direct links back to BancVue or FirstROI. 

Notes:

1. Google search conducted from Seattle IP address at 1 PM Pacific time, 17 June 2008.

2. Verity Credit Union, which is about 4 miles from my home, is a BancVue client, but their reward-checking account, Velocity Checking, is currently paying a short-term teaser rate of 6.75% to celebrate its 75th anniversary (APY updated 20 June per Shari’s comment). When Verity returns to its normal 5% APY, its account will be available through CheckingFinder. There is also a slightly closer California bank participating, Tri Counties Bank, but it is not marketing to Seattle residents, so I don’t see it in my CheckingFinder results page.  

3. Jeffry Pilcher, who recently left Weber Marketing to found his own consultancy, ICONiQ, is also blogging at The Financial Brand. He cautions that the days of differentiating your brand with “reward checking” has passed in many markets.

BancVue Alters the Checking Value Proposition, Powering High-Yield "Reward" Checking Accounts at 350 FIs

For someone whose job it is to stay on top of innovations in financial services, I hate to admit I'm late to the party on the so-called "reward checking" phenomena. Last year, I'd noticed a number of smaller financial institutions launching high-yield checking accounts, but I hadn't realized it was a national trend primarily powered by a single bank tech supplier, Austin, Texas-based BancVue (see note 1).

According to a November BankRate article, more than 350 U.S. banks and credit unions now offer so-called "reward checking accounts" powered by BancVue with 30 new ones coming on board each month. These checking accounts usually pay high rates of interest, typically 6%, if users meet high levels of electronic banking activity each month.

Typical requirements to earn the high yield:

  • 10 to 12 debit card transactions each month
  • Electronic statements (no paper)
  • Online banking usage

Typically, the following benefits are paid ONLY when the above requirements are met:

  • 5% to 6% interest on the first $25,000 to $40,000 in balances
  • ATM refunds up to $10 to $15/mo

And most seem to include:

  • No monthly fees regardless of activity or balance levels, so the account can be marketed as "free"

Marketing
Another distinguishing characteristic of these accounts is the innovative marketing and website design. With the help of BancVue, smaller banks and credit unions are able to offer a level of design and pizzazz that meets or exceeds the typical megabank high-budget program.

Here are some of the more interesting BancVue-powered programs we've looked at (screenshots follow):

  • Velocity Checking <velocitychecking.com> from Seattle's Verity Credit Union
    Earn 6.01% on balances up to $40,000 and receive ATM refunds up to $25 when meeting the following monthly requirements:
    – 12 debit transactions
    – 1 online banking login
    – electronic statement in lieu of paper
  • Turbo Checking <turbochecking.com> from New Mexico's Charter Bank
    Earn 6.01% on balances up to $25,000 and ATM refunds when meeting the following monthly requirements:
    – 10 debit transactions
    – receipt of 1 direct payroll deposit or other automated ACH deposit
    – 1 login to online banking
    – electronic statement in lieu of paper

And our favorite, which substitutes iTunes downloads for the high-yield benefit:

  • FreeTunes Checking <freetuneschecking.com> from Oregon Community Credit Union (see note 2)
    Earns 4 free iTunes downloads each month provided the following are met:
    – 12 debit transactions
    – 1 login to online banking
    – electronic statement in lieu of paper

Screenshots

Velocity Checking from Verity Credit Union

Turbo Checking from Charter Bank

FreeTunes Checking from Oregon Community Credit Union

Notes:

1. I began researching this area after reading Verity Credit Union CMO Shari Storm's recent blog post (here) about how she'd changed her payments behavior to make the 12 monthly debits required for its Velocity Checking.

2. Oregon Community Credit Union also offers a high-yield version, Remarkable Checking, that substitutes a 5.05% APY on all checking account balances instead of the free music. Monthly account requirements are the same. 

First Look: Verity CU’s New Blog

Seattle’s Verity CU, the first financial institution in the world with an external company blog, is replacing its aging Blogger version, in use since the December 2004 launch.

Verity posted a clever “farewell” in its old blog on May 11 (see screenshot below) and promised a link to the new version “soon.” A week later, the new blog is live, and you’ll want to take a look at it <blog.veritycu.com> (screenshot below).   

Link to Trabian The new site is pleasing to look at, easy to follow, and state-of-the-art in just about every way, exactly what you’d expect from Trabian, the red-hot social media design firm. I especially like the middle column which showcases  recent blog postings by department: marketing, member services, executive, HR, IT, accounting, and business services. It helps expose more great posts, while demonstrating to members that the blog is a true company-wide effort. Each department’s posts can also be accessed through the Categories area in the lower-right.

I give it the first A+ of the year. Excellent work!

New

New Verity CU blog

Old

Verity CU old blog

Future Friday: Verity Credit Union’s Earth Day Tie-in

It's quite likely that energy consumption and environmental issues will grow in importance over the remainder of this decade and well into the next one. Financial institutions can play a positive role in promoting environmental causes both by their actions, such as Vancity's pledge to be carbon neutral by 2010, and by offering products that reduce paper consumption, such as eStatements and electronic payments (note 1). 

Seattle's Verity Credit Union <veritycu.com> demonstrates another approach: offering an environmentally friendly premium for home equity applicants. The free compact fluorescent light bulbs are relatively low-cost but have a lasting value to the customer. Finally, the credit union wraps it all up neatly with a tie-in to the upcoming Earth Day (see homepage screenshot below and note 2).

Verity Credit Union homepage

Notes:

1. Because saving paper also saves the bank money, be just a bit careful that you don't come off as overly self-serving when promoting estatement options. Passing on some of the savings to the end-user and/or donating a portion of the savings to a good cause, could ease any criticism you might get.

2. The Earth Day promotion was one of five promotions offered in the main ad box, accessed via a Seattle IP address at 4 PM April 20, 2007.   

Online Banking and Marketing Statistics from Net.Finance

Net.Finance 20007 landing page Since I'm a numbers junkie, whenever I'm at a conference, I try to note as many meaningful statistics as possible. By meaningful, I mean a number that provides an outsider with some insight into the business. Merely saying, "we beat our expectations by 63%" does NOT qualify, unless the speaker also shared their expectations. 

The flow of numbers was about a bit below average during the three days I attended Net.Finance, but the two professional researchers on the agenda, Jim Van Dyke of Javelin Strategy and Asaf Buchner of Jupiter Research, delivered slides chock full of statistics. I will check with them to see if they are willing to share with our readers. 

Here's some of the nuggets buried in the presentations from the other experts on stage: 

Most Eye-Opening Stat

  • Link to Prosper homepageDuring the past 14 months, more than 280,000 messages have been posted on the Prosper.com discussion forum, according to CEO Chris Larsen (see here for Colin Henderson's complete notes on this session).

    My take: That's an amazing level of consumer engagement with the new lending platform. To put that in perspective, Wells Fargo's Student Loandown blog has received 98 total comments during its eight months online.

Best Stat to Drop in a Business Case:

  • Link to VerityCU homepageShari Storm, CMO, Verity Credit Union, said that 1% of its new members named the blog when asked how they heard about Verity; the new members had an average of 2.7 accounts with $9,000 in deposits and $11,500 in loans (excluding mortgage); furthermore, the CU's blog, launched in Dec. 2004, now has 1,000 readers (see here for Colin Henderson's complete notes on this session)

    My take: While I don't recommend trying to turn this single data point into an ROI calculation, it's the first time I've heard a financial exec say something about blogging that the finance folks will appreciate (chalk up another first for Verity).

Stat that Most Contradicts My Previous Position:

  • Link to Vancity's changeeverything blogVancity's ChangeEverything.ca blog, launched commercially in Sept 2006, now has 1,000 registered users who've generated more than 2,000 blog entries and comments; in total, the site has had 45,000 unique visitors according to William Azaroff, Interactive Marketing Manager (see here for Colin Henderson's complete notes on this session)

    My take: Despite my reservations about whether it would gain traction without a financial services perspective (see our Online Banking Report on Bank 2.0 here), Vancity's unique blog has gained a small, but growing, worldwide following, and, more importantly, has contributed measurably to Vancity's efforts to help its community and create positive brand positioning for the CU. Nice work.  

Blogging/Podcasting:

  • Key Bank's most popular podcast, top stock picks by John Caldwell, has recorded 70,000 visits and 12,000 unique users, according to Interactive Marketing Manager Mickey Mencin
  • Colin Henderson, BankWatch blogger and former BMO exec, mentioned that 39% of Canadians are now reading blogs 

Online Marketing:

  • Colin Henderson also cited Forrester findings that 50% of recent financial buyers did 100% of their research online; 30% performed both on- and offline research; and just 20% conducted all the research offline. In Citibank's late 2005 new checking account promotion, the bank gave away 275,000 iPods, according to Charles DeFelice, SVP customer information environment (it wasn't specified if this was the POTENTIAL or ACTUAL number given away, since consumers had to follow through with a number of electronic activities over a period of months in order to qualify for the freebie
  • Jon Kaplan, head of Google's financial services group, said that 60% of Google users have a personalized (Google) page and that 20% of Google search volume originates from these pages
  • GE Money's SVP of Strategy Vincenzo Picone said the company has 300 million customers with $190 billion in assets across 54 countries which led to a net profit of $3.5 billion in 2006; the company has 2010 targets for 300 million unique visitors; $20 billion in online originations and 1 billion transactions via the online and mobile channel
  • U.K.'s Lloyds TSB experienced a 71% revenue lift (against a control) on its homepage by implementing Touch Clarity's (now Omniture) targeted ad server which uses a number of variables to determine which ads should be shown to an individual visitor; according to Omniture's Brent Hieggelke who showed results from a case study presented by Lloyds TSB at a recent conference

Mobile Banking:

  • Jennifer Vos, director of Citi Mobile, Citibank's new mobile banking service, said that one-third of current Citi customers have input mobile phone numbers into the bank's alert system; furthermore, the new mobile offering was piloted by 100 employees, who have recently been joined by another hundred users in the southern California market

Small Business Banking:

  • Wells Fargo has 150,000 "very active" small-business online banking users according to Eskander Matta, SVP of internet services group; businesses are making $45 million in payments per month with the bank's DirectPay servic
    e launched just a year ago

Branding:

  • 94% of ING Direct's customers would recommend it to a friend, according to John Owens, Head of Marketing

Online Banking:

  • Customer satisfaction in online banking, while on the rise, still trails online retailing by five percentage points, 78% vs. 83%, according to Larry Freed, CEO Foresee Results

Online Banking Report Awards Five "Best of the Web" Winners in 2006

Our sister publication, Online Banking Report, is constantly on the prowl for innovations in online finance. When it finds a new one, it awards the new development an "OBR Best of the Web." During its 12-year history, the newsletter has handed out about 80 such awards (click here for the pre-2006 list). The main criteria for winning is "raising the bar" in online consumer banking, credit/debit cards, payments or lending (see note).

The 2006 winners in chronological order were:

  • Prosper (March) for its eBay-like take on
    person-to-person lending (coverage here)
  • billQ (August) for its Web 2.0 bill payment
    reminder service (coverage here)
  • USAA (November) for the first in-home, remote deposit-capture service (coverage here)
  • Wells Fargo (December) for fully embracing
    blogging with the launch of four blogs in 2006
    (coverage here); also, a belated award to Verity Credit Union for being the first to blog in
    December 2004 (coverage here)
  • Bank of America (December) for its Yodlee-powered, full-featured online personal
    finance service, MyPortfolio (coverage here)

It was a good year innovation-wise, and we look forward to continued growth in 2007. One prediction: multiple winners in the mobile finance arena. For more information on the top developments of 2006 along with the latest 10-year forecast, see Online Banking Report #137.

Note: Usually, the first company to implement a significant new feature wins the award. And generally there is only one award for each new feature. For instance, Signet Bank was named best of the Web in 1997 when it launched the first triggered-email alert. Then Charter One won the award in 2002 when it took the triggered-alert feature to a whole new level, integrating voice, fax, and email options into a full suite of alerts. Online Banking Report founder and managing editor Jim Bruene makes the final decision. The only way to win the award is by being innovative. There is no nomination process, no deadline, nor any way to influence the decision. 

Verity Credit Union Website Hacked

Update (Nov. 12, 10 AM PST): Twenty-two hours later, the Verity website has been taken offline, but the blog is still running. However, there are no new posts since the original, although Verity's Shari Storm has responded to several member comments. From information in the comments, it sounds like Verity's log-in page was redirected for up to four hours on Saturday morning beginning about 6:00 AM. At least one member said they answered "screening questions" including mother's maiden name.

Seattle-based Verity Credit Union is in the midst of a major website spoof that began earlier today. The credit union is reporting that the log-in function to online banking, located on its homepage (upper-right below), has been redirected by a hacker.

Apparently, only the log-in function was hijacked. The credit union has control of its homepage and plastered a large warning over the front. The link after the warning, "more information," linked to the Verity blog for updates (see below).

Verity CU home page with warning CLICK TO ENLARGE

It appears the log-in process is back under the credit union's control, although the warning is still there. When attempting to log in at 3:15 PM with a test name (I do not have a Verity account), I was redirected to an error message at <https://secure-veritycu.com/Common/SignOn/SignOnError.asp>, which appears to be a legitimate Verity secure page. There was no follow-up question asking for my credit card number as mentioned in the blog post (see below).

The incident was first posted to their blog at 12:02 PM today (see post below).

Blog post on the hack

The silver lining
As bad as this is, Verity should be applauded for the rapid response, using both its website and blog to get the word out. Presumably, they also emailed customers, but those messages may or may not be believed in this day of rampant phishing.

You can follow the ongoing drama at the Verity blog, where customers have been redirected for the latest news. We'll keep you posted.