Feature Friday: Capital One Partners with Uber for Discounted Rides

By Jim Bruene on April 24, 2015 4:37 PM | Comments

This week, Capital One launched a national marketing promotion with Uber that provides a 20% rebate on rides for one year. And unlike many (most?) card offers, it's good for both new and existing Capital One customers. However, it applies only to the bank's Quicksilver cash-back card, so I'm out of luck with my Capital One Venture card.

But they did throw us non-Quicksilver customers a bone yesterday, with an email (see below) offering two free Uber rides (up to $30 each). For me, that's probably about the same as the 20% rebate, so I was ready to fire up the app and swap out my Bank of America card. But wait, there's that pesky fine print again. It turns out the free rides are only for new Uber customers. Out of luck again.


Overall, this is a great promotion. The bank gets both new cardholders plus a pile of Capital One cards stored in Uber's app, a great retention tool (the primary goal?) along with a long-term revenue stream (albeit, not enough to recoup the cost of the 20% rebates, unless Uber is picking up a big chunk of the rebate).

The only thing I don't like is the disingenuous email to non-Quicksilver customers. Capital One alludes to the fact that the free rides are for new Uber users (see highlighted body copy in screenshot below). But that statement is easy to overlook or misinterpret. It's only when you get to the tiny type below, which is further hidden in a gray background (see highlighted fine print below), that the "new Uber customer" requirement is explicitly stated.

Why not just come out an say it clearly in the body of the email (or even in the subject line)? Existing Uber customers are going to find anyway when they try to redeem. Just be clear up front and save everyone the hassle! Better yet, don't send the email to cardholders who are already using Uber (that could have been determined with an email match for me).

Final thought. Why not provide all cardholders an incentive to enter any Capital One card into the Uber app? For rewards cardholders remind them they can pay for their Uber rides with points (eg. Purchase Eraser). Or how about a sweeps? For example, one out of every 100 rides (or 1,000) are free to Capital One cardholders until May 30. That could be funded through interchange alone.


Capital One email to its Venture cardholders (23 April 2015)
Note: Highlighting mine



The Netbanker Blog Moves to Finovate.com

By Jim Bruene on April 13, 2015 12:59 PM | Comments

I started the Netbanker blog 11 years ago with three sentences about the new "local option" for Google Adwords. Initially, it was a password-protected service exclusively for our Online Banking Report subscribers. But in 2006, we followed global trends by opening it to anyone free of charge. And 2,500 posts later, it's still that way.  

This week, we begin a new era as we merge the Netbanker blog with our Finovate blog to form a single place where you can read the musings of myself and our two full-time writers, Julie Schicktanz and David Penn. I will continue to focus on the user experience at financial institutions while also tracking fintech startup activity (like this). David and Julie primarily report on the extensive activities of our more than 700 Finovate alumni. 

What Happens Next
You don't need to do anything to continue reading Netbanker. Later this week, we'll point the RSS feed to the Finovate blog. And if you read this by email, we will be merging this list with our Finovate blog email list. If you end up with two feeds or two emails, you can unsubscribe by following the instructions at the bottom of the email. And if you are looking for an older item, you'll find all 2,867 Netbanker posts archived at the Finovate blog. 

I will continue to tweet via Netbanker while alumni and event-related items are tweeted from Finovate or the FinDEVr account. 

Thanks to everyone who've been reading along. Please drop me a note if you have any questions. And I'll see you over at Finovate.com.

Categories: Finovate

Future Friday: Drastically Downsizing the Bank "Branch"

By Jim Bruene on April 3, 2015 12:28 PM | Comments

bank popup.jpg

The number of traditional bank branches (1,000+ square feet, fully staffed) is on the decline. In some European countries, more than half have already disappeared. U.S. bank branches are down only 5% from the peak (see inset, note 1), but the trend will gain momentum as leases expire and revenues are squeezed.

number of bank branches dbr.jpg

While I appreciate the helpful people and wide-open spaces, most (note 2) bank branches are just too costly to support the declining "non digital" customer base. That has led to eerily empty branches (not exactly a great branding statement) which no longer generate enough new business to pay their way (although they often still support large legacy-deposit bases making them seem profitable).

Consider the four cornerstones of branch value:

1. Opening accounts, especially for someone new to the bank
2. Servicing accounts, especially when there is a "problem"
3. Providing advice, especially for loans and business services
4. Visible reinforcement of the brand (i.e., very expensive billboards)

Numbers 1, 2 & 3 can be handled more efficiently online, over the phone or at the customer's location. But what about #4, the billboard value?

Banks don't want to lose that. But it's time to find more cost-effective ways. One answer: Locate micro-branches within established retailers or in other shared spaces. You keep your brand in front of the community, you drive traffic for partners, and provide needed assistance for bank customers who absolutely need to see a smiling face in the real world.

What I mean by micro-branch isn't really a branch at all, it's more of a deposit-taking ATM/kiosk, or two, staffed by just a single banker (possibly just part-time). Think airport check-in with roving staff helping travelers at kiosks. And micro-branch/kiosks could be staffed only during peak traffic times, with self-service available at other times. For a good ROI, the banker must be able to close (or seamlessly refer to others) higher-value products such as loans, credit cards, business services and possibly even insurance.

Here are some retailers that might be open to micro-banking centers which would draw traffic, provide services, share in the rent, and in some cases, assist with purchase financing:

1. Office supply stores: Here is one place in the real world still frequented by businesses (and consumers) that need something to do their jobs and don't have time to wait a day or two for Amazon delivery. Team with Office Depot/Staples and put micro-branches within their stores.

2. Home improvement stores: Here's another physical retailer likely to remain viable for a long time. Home project supplies are often not conducive to shipping, and many shoppers still need assistance figuring out what they need. There would be good synergies for a micro-branch dispensing home-improvement financing, along with other typical branch services.

3. Other high-value and/or high-volume retailers: If banks can get in-store staffing down to 1 FTE plus one or more ATM/kiosks, it would be possible to expand into lower-volume locations than typical grocery store or Wal-mart locations used today. It could make sense to locate in large electronic stores (e.g., Best Buy), popular furniture stores, outdoor equipment retailers, or shipping/printing location (e.g., FedEx).

Or consider putting other services in existing branches to share costs and generate activity:

1. Ecommerce kiosks: The last mile of ecommerce, actually getting products delivered to the end user, is still expensive and problematic. Team with Amazon, eBay, et al to add kiosks, lockers, etc., to your branch locations. A branch with a RedBox, BestBuy vending machine, Amazon lockers, FedEx drop-box and others would be a much more vibrant space.

2. Other professional services: Team with non-competing service providers such as Realtors, CPAs, tax-prep services, law firms, tutors, insurance providers, and investment advisors to create a one-stop shop for a variety of needs.

It's an exciting time to be involved in banking alt-delivery. Simultaneously maintaining a bank's local presence, while dramatically decreasing long-term costs, is the kind of tricky business problem that will create new winners (and propel the careers of those making the right bets).



1. Source: From the latest Digital Banking Report (formerly Online Banking Report), Bricks + Clicks: Building the Digital Branch, March 2015 (a great read and well worth the price)
2. Please note I am saying "most" traditional (i.e., large) branches are not viable in the long term, unless their business model or cost structures are dramatically changed. But that doesn't mean there still won't be thousands (maybe even tens of thousands) of profitable brick & mortar locations for the foreseeable future. There just won't be 100,000+.

Picture credit: Retail Week

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Categories: Branch Banking, Strategies

Last Chance for FinovateSpring Early-Bird Tickets... Save $100

By Julie Schicktanz on April 1, 2015 12:42 PM | Comments

Interested in taking part of the action at FinovateSpring this year? Now's the time to pick up your ticket! Friday, April 3 is your last chance to get a discounted ticket to this year's event, which takes place May 12 & 13 at San Jose’s City National Civic. FinovateSpring launched in 2008 and last year hosted more than 1,200 attendees. See what you missed.


With your ticket to see the future of fintech, you'll watch 72 live demos of never-before seen technology, plus meet the innovators themselves, along with other influencers in the space.

You'll join top representatives from companies such as American Express, USAA, and Lending Club, and investors from Foundation Capital, Route Sixty-Six Ventures, and thirdstream.

Here's what Matt Ankrum, Co-Founder of BodeTree had to say about Finovate:


And some of the companies that will take the stage at this year's event:


With FinovateSpring just six weeks away, don't wait to be a part of the action; pick up your ticket today. We'll see you in San Jose!

FinovateSpring 2015 is sponsored by The Bancorp, Capital Source, City National Bank, Envestment, Financial Technology Partners, Hudson Cook, Kyriba, and Life.SREDA.

Categories: FinovateSpring 2015

Mobile Account Opening Hiccups (updated)

By Jim Bruene on March 31, 2015 10:31 PM | Comments

Update (1 April 2015): I received two calls from BankMobile this afternoon, including one from its president, Warren Taylor. Apparently, my authentication failure was not due to my faulty memory or credit bureau errors. It looks as though I fat-fingered a typo in my social security number (lesson #4, use double-entry of soc numbers, especially on mobile) leading to some bizarro out-of-wallet questions. Anyway, my apologies to BankMobile for the kerfuffle. As to the issue of communicating to rejected applicants, the bank says it is working on new follow-up communications to rejected applicants. 


After whining about the current state of the mobile banking user experience yesterday, I was contacted by a reporter writing about mobile banking startups. He was curious about how the mobile user experience at the newcomers compares to that from major banks.

That got me thinking. While I've been impressed with the UIs at MovenSimple, and GoBank, I hadn't tried a new one for a while. So I decided to check out BankMobile, the mobile-first brand of Customers Bank, that has been getting a lot of press lately (for example, Mary Wizniewski in American Banker, David Gerbino in The Financial Brand). The new mobile-only bank uses technology by upcoming FinovateSpring presenters Malauzai and Mitek

bankmobile home.jpg

I first visited BankMobile online (above) to see how they presented themselves. Much of its opening pitch, in addition to FEE FREE (see above), centers on using the mobile camera for account opening, bill payment and mobile deposit...a compelling message for smartphone users.

Since I'd yet to use camera-enabled account opening, I was looking forward to the experience. While I had a little difficulty getting the drivers license captured, it worked as promised and successfully OCR'd my info into the account application. I just had to add my phone number, mothers's maiden, and social security number manually and I was almost done.

After selecting three security questions, the only thing left between me and a new bank account was the dreaded credit-bureau-enabled authentication step. When this technique first made its way online, I failed it repeatably. But in the past few years, I've gotten better at it. But this time, I was foiled. I know I got the first question right. Then I had to answer "Does not apply" to two questions in a row, a bad sign. Then the fourth question was guessing what year I opened a particular credit card (really, I am supposed to remember that?). Apparently I got it wrong, since my "application" for a checking account was denied.

I understand the requirements to authenticate new customers. And it's not BankMobile's fault I failed. But it's super frustrating. I presented a valid drivers license (front and back), input my personal info, and answered at least 2 of 4 authentication questions correctly. And since I didn't get that third one right, likely because of a credit bureau error, I'm unable to open an account. And were I a normal consumers, I'd be worried about whether I'd just been tricked into providing my personal info and copy of my drivers license to some crook. Even if I wasn't that paranoid, I might still have questions about how that personal information will be used.

bankmobile_declineBut the worst part is that there is no way to appeal the decision. All I received was a cryptic on-screen message saying "201. We are sorry, as we are not able to open an account for you" (see inset). No explanation. No number to call "if you believe you received this message in error." No alternative sign-up option. They didn't even send me an email followup. It was almost enough to make me wish they had a local branch (and I haven't felt that way for a long, long time).

Action Steps
When you move to mobile account opening, soon to be a must-have capability, please do yourselves a favor and consider what to do with those that fail your authentication stage. It's OK to make them jump through some reasonable additional hoops, but just letting them go is bad for business. Everyone under the age of 30 knows how to screen cap and post various business fails to social media. Don't be that company.

Instead, institute a second chance process:

1. If authentication fails, take applicants to a "need more info" page.

2. On that page, include the following:
A.) A sincere apology, ideally from a real person
B.) Explanation of what might have gone wrong, situations where you are unable to approve an account, and assurances that the applicant's private info is being held safely and confidentially
C.) Outline simple steps to resubmit the application
D.) Email, phone and text message addresses to get help (including hours of operation if not 24x7)

3. Send an followup via email and text message, apologizing and linking to the page outlined above


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