USAccessBank Emphasizes Full-Line Commercial Banking (NetBanker)

www.usaccessbank.com

One of the better-designed features of USAccessBank is its application process. Unlike other online checking account applications we’ve seen, the bank does not force feed disclosures on new users. The bank uses the “optional link” approach common in ecommerce Web sites. Users are shown links to the disclosures, then must attest their agreement. But they are NOT required to click through the disclosures.

Whether this approach passes muster long-term with the regulators is yet to be seen, but for now it sure makes the application process far easier.

The Company: USAccessBank is a newly formed unit of Porter Bancorp (Louisville, KY; $470 million). The bank has high hopes for its Net unit, even to the point of assessing the market demand for what could almost be classified a “pre-revenue IPO” to get Internet funny money to use in marketing.

Porter Bancorp Units

Bank	Assets
Brownsville Deposit Bank (Brownsville, KY)	$45 million
Bullitt County Bank (Shepherdsville, KY)	$97 million
Central Bank USA* (Louisville, KY)	$111 million
First State Bank of Porter (Porter, OK)	$15 million
Green River Bank (Morgantown, KY)	$47 million
Pioneer Bank (Canmer, KY)	$71 million
The Peoples B & T (Greensburg, KY)	$82 million
Total	$468 million

Source: FDIC as of 9/30/98 * USAccessBank parent

Product Line: Like First Internet Bank of Indiana , USAccessBank has launched with a full product line including the usual deposit and loan products. But where loans seem an afterthought at the other Net-only banks, USAccessBank has put some effort into creating a competitive loan delivery system complete with instant loan decisions, a must for any serious Net-only bank.

The bank has also launched with business banking products, giving at least the appearance of a “normal” full-line commercial bank. A nice first impression, even though the business and consumer products are nearly identical except for names and prices.

Pricing: Like many cyberbanks, USAccessBank strives to keep fees low. As you can see from the chart on the next page, bill payment, ATMs, and check printing are free. However, the bank does plan to assess a monthly checking fee after the first six months, and they are pioneering a new fee that probably won’t be popular with users: $2 per month for a mailed copy of your statement.

USAccessBank hopes to attract depositors with rates near the top of the charts. Indeed, on Mar. 15, they were number one on BankRate.com with the highest 1-year CD rate in the U.S.

Contacts: David Pierce is CEO of the virtual unit; Amy Hamburg, previously Marketing Director of Security First Network Bank, is SVP Marketing, ahamburg@usaccessbank.com
(502) 499-4779.

Real Fees at the Virtual Banks

Source: companies 3/15/99 *monthly fee ¹CompuBank lowered prices on Feb. 23, 1999, except outgoing wires free which were eliminated 3/8/99
²Fee waived with direct deposit or regularly scheduled inbound ACHs (min=$1,000); ³fee waived with a $5,000 balance; ⁴plus $6 if balance falls below $500

Analysis

Both FIBI and USAccess have launched good, fully developed banks. USAccess has done a better job with lending products, the online deposit application, Web site design and copy writing (screenshot right), an especially weak area of FIBI’s offering. However, FIBI has done a better job creating a hook with the real-time transaction and service positioning. Whether users care if info is posted 12 hours earlier is debatable, but the bank does a great job building a perceived advantage around the notion of faster service.

Whether either bank can compete on a national level with the far more aggressive e-banks coming from Citibank, NextCard, Bank One and others, remains to be seen. But even as regional players, the virtual banks are likely to be assets to their parent companies.