I’ve been on a bit of a campaign this summer (writing in Online Banking Report here and here), about the need to move beyond the static online “data dump” model to a more measured approach delivering precise financial info when and where the customer needs it. 

We mostly looked at outbound messaging and streaming systems: email, text, RSS and third-parties such as Blippy and Swipely. But the same logic can be used to improve the financial home base, the online statement.

Google’s new email option, Priority Inbox (aka Magic Inbox), introduced to Gmail users this week (note 1), is a great example of how this could work. Instead of always displaying email (or transactions) in chronologic or reverse-chronologic order, use algorithms to show items in order of importance (see screenshot below).

The bank-transaction importance ranking would obviously include the size of the item. But it would also position unusual payments of any size at the top of the list so that users could identify fraud or errors much faster. And like Gmail, users should be able to label and flag transactions for future reference (note 2).

A service like this would have saved me hundreds of dollars this year, by alerting me immediately that my cell phone bill had mushroomed, and that I needed to switch to an unlimited-minutes plan.

Gmail Priority Inbox (1 Sep 2010)
Note: There are no messages in the top priority area called “Important and unread” because I’d read them all. Google provides a little note of congratulations for clearing out that portion of the inbox.

Notes:
1. Google has offered similar algorithm-based ordering in its RSS reader for some time. I’ve been using it for almost a year and am a big fan. It really helps lift the best posts to the top of the 600 or so I get each day. I will use Twitter a lot more when it offers the same type of functionality (Does anyone know of a Twitter client that arranges tweets by importance?)  
2. And like Google, banks users should be able to store their transactions for as long as they are customers. See our Online Banking Report on Lifetime Statements for more info.

Today’s Financial Brand post by Jeffry Pilcher is the best article I’ve ever read on branch design. And if you are building or remodeling mega-branches, it’s an absolute must-read.

But as I read it, I couldn’t help thinking about that old saying about the deck chairs on the Titanic. Sure, IF valuable customers continue to visit branches, and IF those customers are willing to be pitched products as they rush through their errands, and IF you train/compensate your staff to effectively sell, and IF you can still afford the half-mil or more it costs to run each one, then by all means build U-shaped branches to maximize sales interactions, hire world-class greeters, and install engaging merchandising displays along the snaking path to the teller windows in the back.

But no matter how many design awards your branch receives, it won’t change the megatrend: the future of financial services is outside the branch. Nearly every profitable business line is already sold direct: credit cards, prepaid cards, insurance, mutual funds/investments, car loans, mortgages, commercial loans, and more recently even savings/CDs and checking accounts.

And now that ATMs, PC scanners and mobile phones handle deposit-taking better than the friendliest teller (note 1), the traditional branch has no business case. Sure, spacious and attractive branches in high-traffic areas are great marketing tools. They reinforce your brand, show your stability, and I’ll have to admit, they are mighty convenient for dropping off paper checks and getting free cookies.

But that model is too expensive. I agree with Mr. Pilcher that branches are far from dead. But the future branch is likely to look more like an Edward Jones or Allstate office, not the thing of beauty shown here. There may even be more of them (Edward Jones has more than 10,000), but they won’t look like these pictures. 

The bank/CU branch will morph into small storefronts sprinkled throughout the community staffed with a few people heavily incented to produce revenue. Routine transactions will be handled by (mostly) self-service ATM/kiosks. Unlike the Titanic, the sinking of the mega-branch model will be slow. And the ultimate brick-and-mortar mix will be much more complicated than my simplistic take on it here. But branches will shrink, tellers will be phased out, and the online/email/mobile channels will handle just about everything. Just ask USAA. 

Notes:
1. Remote/ATM deposit capture is superior to most teller-assisted deposits because not only do you save a trip to the branch, you get immediate real-time confirmation that the deposit has been properly recorded, you can make the deposit earlier (as soon as you receive the check), you get a copy of the image to store indefinitely, and in the case of remote capture, you can even hold on to the original check as proof of deposit.
2. We wrote about the Demise of the Branch in 2006 (OBR subscription required).  
3. Photo credits: EHS Design.

How did USAA become the most innovative bank in America? I guess its big-bank competitors have been kind of preoccupied with other matters the past few years. And because USAA serves most of its 5 million banking customers remotely, it stands to profit from pushing the envelope in online/mobile delivery. 

The latest proof that the bank is both innovative and adored? Posting user reviews right in the middle of the homepage, an inventive and unique approach. And with an average score of 4.7 out of 5 for both checking and auto insurance, the reviews serve as a transparent and effective mass endorsement.

Here's the breakdown of scores received on 6,350 total reviews for USAA's free checking account (as of 12 Aug 2010):

     5 stars (excellent) >>> 5,550  (87% of total)
     4 stars (good) >>>>>>    329  (5%)
     3 stars (average) >>>>   154   (2%)
     2 stars (fair) >>>>>>>    110   (2%)
     1 star (poor) >>>>>>>     214  (3%)

Relevance for Netbankers: Frankly, I never thought I'd see user reviews posted anywhere on a bank site, let alone the homepage (note 1). If your customers love you, I mean really love you, customer reviews posted directly to an in-house site is a great way to prove it (note 2).

USAA homepage (12 August 2010)
Note: Ad on top for its new Auto Circle car-buying service, complete with its own iPhone app.

Notes: 
1. Bank of America also posted user reviews on its site, but the feature appears to have been discontinued a while ago. The last reference I could find on Google about the reviews was in Jan. 2008.
2. This would not be an easy project and would require a significant investment in ongoing monitoring and maintenance. More importantly, it requires a thick skin; your organization would have to be comfortable with a certain amount of complaints being posted. As good as USAA's overall score is, there are still 314 poor reviews posted, 3% of the total. But allowing customers a salient vent-fest on your website may keep them from doing so in more public venues such as Twitter. It also gives you a chance to respond to and resolve posted problems.

We want to pause in our usual blogging activities to show our gratitude to the sponsors whose generous support keeps NetBanker a free and high-quality resource for the industry.

Please take a moment to check out our sponsors (listed below, in alphabetical order):

• Backbase -- They're promoting their fast-to-implement portal software for financial companies including Web 2.0 personalization and online marketing functionality. You can get more information or watch a demo here. 


• IntelliResponse -- Get a complimentary whitepaper on how self-service via the mobile channel can improve your customer service and benefit your business. Download it now!


• Intuit -- Intuit is promoting their FinanceWorks platform. They've got a number of on-demand webinars that are worth checking out. 
  


• MyBankTracker -- MBT is a new financial community built by avid fans of the banking world. Check out how they're innovating at MyBankTracker.com. 


• WorkLight -- Offering (complimentary) results of a new survey on consumer satisfaction and concerns regarding banking applications for the iPhone, BlackBerry and Android. If you're trying to understand the smartphone trend, it's worth accessing the results.
  


• Yodlee -- Check out Yodlee's new free whitepaper on how Personal Financial Management can be a platform for customer engagement. Download it now!
  

Thanks for taking a moment to check out our sponsors. Please let us know if you ever have any feedback on these companies or our blogging.

P.S. If you want to join these companies in supporting NetBanker, please drop me an email at eric@netbanker.com.

Each day, the typical consumer household completes several banking and credit/debit card transactions. And 99% of the time, the transactions require little extra attention other than mentally checking them off to ensure you aren't a victim of fraud, or more likely, human error.

But to stay on top of that routine activity, Americans collectively make hundreds of millions of visits to banking websites each month. This, my friends, is not an efficient use of time.

And it's mostly unnecessary. There's really no reason to log in every week to manage my accounts. All the info I really need could be sent to me via email.

That would eliminate the need for most website visits. And if I could initiate transactions right from the email, I'd only need to visit the website every few months to tweak my settings (even that could potentially be done through email interactions).

But as pervasive as email (and text) alerts have become, they are often cryptic messages that make you feel less certain of your finances, creating more anxiety and more website visits (see note 1). This is not what you want from financial providers.

What's missing is a rich email experience, where a balance summary message can be expanded into a full statement with the click of a link. Where key supporting actions, such as paying a bill, are imbedded in the message. And where it's easy to resolve issues immediately while you are thinking about them, rather than moving to another channel later on.

That's the promise of Email Banking that we explore in the current report (see below). We also look at a new Israeli startup, ActivePath, that is delivering much of this vision with its new email banking service launching in the U.S. later this year (note 2). The screenshot below shows how a password-protected daily account-summary email can become a full-featured account-management tool with numerous links to act on the information presented. 

Finally, in an addendum to last month's report on email/text alerts, we look at the alert-control panels at five major banks: Bank of America, Capital One, Chase, U.S. Bank and Wells Fargo.

About the report:

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Email banking: revitalizing the channel (link)
New technologies and more thoughtful design could elevate email
to a central role in account management

Author: Jim Bruene, Editor & Founder

Published: 19 Aug 2010

Length: 40 pages

Cost: No extra charge to OBR subscribers, $395 for others here

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Daily account summary email from ActivePath
Note: Embedded buttons to a.) view transactions, b.) role money into a CD,
c.) transfer funds, d.) view transaction detail, e.) chat with customer service

Notes:
1. For more on email alerts, see last month's Online Banking Report: Email Alerts & Transaction Streaming.
2. See ActivePath, along with 55 other innovators, at FinovateFall, Oct. 4/5 in NYC.