Yesterday, I looked at a list of free services likely to come under pressure as banks work on the Herculean task of returning to normal profitability. One area that’s likely to remain free for the foreseeable future is online and mobile banking, at least the core account-access portion of it.
But we continue to believe that financial institutions are missing a revenue opportunity to provide premium fee-based services to certain segments.
If American Express can command $2500 per year for its black Centurion Card and Barclays $495 per year (see note 1) for its slightly more pedestrian Black Card launched in December (see note 2), why can’t banks get $10/mo for a similar premium version of online and mobile banking? The short answer: They haven’t tried.
Just for the sake of discussion, here’s a “gold online banking” service for which I’d pay $15 per month without a moment’s hesitation:
- High-end website and iPhone app
- Long-term (7+ years) online storage of images, transactions, statements
- On-demand credit score like Credit Karma
- Credit bureau alerts when negative items hit
- Account aggregation with weekly summaries like Mint
- Email customer service with 30-minute or less turnaround time
- VIP phone and tech support with no phone tree
- No overdraft/NSF charges (within limits of course)
- Travel rewards/sweepstakes on electronic transactions
- Pre-filled one-click credit application
- Extra security options
- SMS balance inquiry
- Iron-clad, no-fine-print security guarantee with 100% immediate reimbursement and emergency credit line
For more elaboration on these benefits, see our Online Banking Report on Pricing Online Services.
Visa Black Card homepage (15 Feb. 2009)
Includes one-page online application
Note:
1. The benefits of the Visa Black Card are similar to those from many gold/platinum cards. One of the biggest differentiators is free limited membership to Priority Pass which gets cardholders into 500 airport lounges in 250 cities. However, according to the FAQs, Black Card holders are limited to two complimentary visits per year, so this would cost $154 annually if purchased directly from Priority Pass. In fact, for $349 annually, you could get unlimited access to airport lounges.
2. The Visa Black Card has been advertised with full-page ads in the New York Times, the latest on 10 Feb. 2009 on p. A5 (national edition).