Washington Mutual Archives - Page 3 of 3

Bank Websites Should Provide Secure Connections to Legitimate Fund-Raising Sites

By Jim Bruene Posted on September 1, 2005
Categories: Chase Bank, Public Relations, Service, Wachovia, Washington Mutual

When natural disasters strike, such as the Southeast Asia tsunamis or Monday’s Hurricane Katrina destruction in New Orleans and the Gulf Coast, banks should use their considerable web reach to help their customers make safe and secure donations to sanctioned relief agencies such as the Red Cross.

With all the concern about online phishing and fraud, consumers need a trusted conduit to make donations. And the sooner the link is posted, the better. As bad as it is, for much of the country, it will no longer be top-of-mind in a few days or weeks.

Major banks fail to respond thus far
Granted its only been three days, but we were surprised to find that of the largest 50 U.S financial institutions only three, Chase (Chase.com and BankOne.com), Wachovia (Wachovia.com and Suntrust.com), and Washington Mutual (wamu.com), have posted links to the Red Cross to make online donations (see Wachovia banner above).

Seven others had hurricane-related information, but no links for donations:
– Regions, AmSouth, Navy FCU, Compass Bank, and of course New Orleans-based Hibernia all had information on branch closings
– USAA posted tips for dealing with the aftermath of a hurricane
– Commerce Bank (NJ) ran a headline ticker on the top of the homepage offering to match donations up to a total of $50,000 (which strikes us as bit stingy if you are going to blast it across your homepage)

Action Items
The best response, from a customer service and PR perspective, is to announce a corporate contribution and provide secure links to the Red Cross and other relief agencies. Contributions should also be accepted via mail or in-branch.

Wachovia does it right, with a small, but highly visible homepage link explaining its efforts and providing the important message, You Can Too (see inset above). Clicking on the link leads users to a landing page that explains Wachovia’s $250,000 corporate commitment along with two important links (click on inset for a closeup look):
1. Donate Now link to a Red Cross store established on Yahoo handle Katrina donations
2. Email this page to spread the word

Even if your bank is not prepared to make a corporate contribution, it can still support fund-raising efforts with a link to the official donation site.

—JB

Washington Mutual Small Business Resource Center

By Jim Bruene Posted on June 12, 2004
Categories: Innovations, Washington Mutual

Although not as robust as Barclays, Washington Mutual is
the only top-10 U.S. bank with prominently targeting startups. Through its
partnership with StartupNation, the bank has posted several articles on
its website, and also sends users to a cobranded
www.StartupNation.com
website to sign on for more tools and resources including webinars, resources,
and coaching. We don’t know the terms of the relationship, so we can’t judge the
cost effectiveness. However, we definitely like how WAMU is positioning itself
as a supporter of
small business.

WAMU & EBAY Test CD Auctions

By Jim Bruene Posted on February 5, 2004
Categories: Ebay, Washington Mutual

Washington Mutual testing the waters by selling CDs with
eBay.

In January, Washington Mutual became the first bank to test selling
certificates of deposit with eBay. The test was conducted on a standalone
co-branded site, rather than being integrated with eBay. Users were required to
register to participate in the CD auction. EBay credentials were not accepted
nor did the certificates turn up on regular eBay searches

Although not the first to try retail CD auctions, Washington Mutual
(Seattle, WA; $289 billion) is the first bank to team with eBay to add
legitimacy to the unusual deposit-gathering scheme at http://www.wamucdauction.com/
a co-branded site, hosted by eBay. The Bid Your Rate test is
scheduled to run from Jan. 15 through February, with one-hundred $1000, 6-month
CDs auctioned per week, for a total of 600. Apparently WAMU approached eBay with
the idea and paid an undisclosed fee for the development and limited marketing
to eBay users.

Auctioning CDs was tried by several banks in the late 90s, most notably by
PNC Bank which ran auctions on its website for about a year beginning
in Sept. 1999. Several other smaller banks, including the now-defunct USA
Bancshares, gave it try but it never caught on. But that was also before
eBay became a cultural icon.

How it Works

It’s much like an eBay auction but the bidding runs in reverse. The
auction begins with a high interest rate and is bid down in increments of 5
basis points. In our tests we found the reserve to be 10% and proxy bidding, as
is customary on eBay, was not used. Your bid was automatically entered at the
lowest rate you selected.

From our observations, the bank needn’t have worried about using a 10%
reserve price since all the CDs were quickly bid down to competitive levels. For
example, at mid-day Feb. 9, the 12 CDs closing later that day had all been bid
down to 2.05% or 2.10% rates. In comparison, that day
http://www.bankrate.com/ pegged the
average U.S. 6-month CD rate at 1.23%, with Stonebridge Bank offering the
highest at 2%. You could also get 2% with a savings account at ING Direct.
In Washington state, Washington Mutual’s website offered a 0.95% rate on 6-month
CDs. That CD featured the option of adding to it at any time during the term for
the same rate.

Apparently the test was promoted on a limited basis with banners and links on
eBay, although we never saw one. However, there is no integration with the eBay
search engine. We tested various search terms and found no mention of the WAMU
CDs. Washington Mutual issued a press release on January 14, but is not widely
promoting the service. We found no mention of it on the bank’s website (Feb. 9)
nor did it appear in site search results.

Here’s what you see after entering a successful bid (in
this case 10%) that’s met the reserve and taken the lead, at least for the
moment. Final winning bid was approximately 2%.

Analysis

At this point, CD purchasing on eBay may be too small a niche for a large
bank to profitably serve. However, it might be a good way to attract hot money,
without repricing your current deposit base, or to create some interest in your
deposit and/or online services. Long-term, we are more optimistic and expect
deposit auctions to eventually become a common practice; after all retail
investors already purchase T-bills directly from the U.S. government in a
similar fashion.

Contacts

Doug Marshall is SVP Deposit Strategy and Product Management at
WAMU; Gary Dillabough is VP Strategic Partnerships at eBay.