« Who's Innovating in 2009? Finovate Preview | Main | American Express "Take Charge" Campaign Launches with Powerful Full-Page Ads but Weak Online Support »

Fifth Third Bank Bundles Free Credit Report Monitoring & Identity Theft Protection into Checking Accounts

By Jim Bruene on September 2, 2009 4:21 PM | Comments (1)

imageChecking account profits are being attacked on several fronts. Near-zero short-term interest rates have destroyed the profitability of the balances. Regulators and activists are putting pressure on penalty fees. And consumers are loath to pay monthly charges for what's been positioned as a free service for so long.

So how is it that Fifth Third Bank is able to bundle a service into its checking account that typically costs consumers $12 or more per month? They are bringing back the monthly fee (see note 1), charging either $7.50 or $15 per month for a so-called package account (see options below). It's a strategy right out of Marketing 101: figure out what customers want, then build the  product, package it right, promote it well, and price it for the value delivered.

I believe Fifth Third has taken the right tack with its checking accounts, though it should go even further (see analysis). The bank offers two non-interest checking account bundles (PDF comparison here), neither of which are free of charge no matter how high the balance (note 2). Instead of offering fee waivers, the bank has bundled full-service three-bureau credit report monitoring and identity theft services powered by Affinion (link to Fifth Third Identity Alerts). And the monitoring is available for BOTH names on a joint checking account (note 3). 

  • Secure Checking at $7.50/month, comes with free credit report
    monitoring and identity theft protection (valued at $9.95/month per person)
  • Gold Checking at $15/month, comes with the same free ID protection &
    monitoring plus free nationwide ATM access

Analysis of Secure Checking
imageNow more than ever, customers are craving security and safety in all things financial (see yesterday's post). Bundling identity theft/credit report monitoring in checking accounts is an excellent way to address customer concerns AND differentiate your account in the marketplace. And naming it Secure Checking helps drive home the key benefit.

I like what the bank has done. It would be even better if it highlighted more of its current security features available in mobile and Internet banking (note 4):

  • Email alerts
  • Mobile text alerts
  • Secure storage of estatements
  • Transaction monitoring for fraud and error
  • Other security protections as outlined on its security page
And down the road, they could enhance the account with additional features such as (note 5): 
  • Out-of-band authentication via text message
  • Disposable credit/debit account numbers
  • Long-term (7+ years) secure transaction archives
  • Enhanced fraud protection guarantees
  • Dedicated security reps on call 24/7 to help out in the case of a suspected problem
  • Software and tools to safeguard online banking (e.g., Trusteer, Authentium, Check Point)

Fifth Third Bank non-interest checking accounts (link, 2 Sep 2009)

image

Secure Checking landing page

image

Notes:
1. Ref: Is This the End of Free Checking?, SmartMoney Magazine, 31 Aug, by Kelli B. Grant
2. The bank does offer an interest-bearing checking account with its $15 monthly fee waived with a $2,000 average balance in checking or $20,000 across all deposit and investment products. The bank also has a free non-interest checking account option.
3. I'm not sure the bank gets enough mileage out of covering BOTH account holders to justify the additional costs. To improve profits, the bank should consider a modest additional fee (approximately $5/mo) to cover joint account holders. 
4. These benefits are hidden behind a tab that most consumers, including myself on my first two passes, will likely miss (see second screenshot above).
5. For more info on how to package security benefits into your services, refer to the following Online Banking Reports: Marketing Security (June 2005) and New Techniques for Securing Online Banking (Sep 2008).

Comments (1)

Most Recent Posts:

TrackBack

TrackBack URL for this entry:
http://www.netbanker.com/cgi-bin/mt/mt-t.cgi/2184

1 Comments

Please be aware that if you bank on-line with 5/3 bank - you do so with the knowledge that the money for checks paid comes out of your account on the day the check is written. If a payee does not cash the check or disputes payment you must file a "dispute" with the online banking division. You will be told it will take 10 days to resolve the issue. You are not able to bring up on line checks written from your account, nor will the company send you copies of those checks. In essence there is no way to know if the online checks you have paid have actually been cashed.

Upcoming Events

Recent Research

  • NEW! Mobile Account Opening (MAO): Port online account opening to smartphones to reach the sizable mobile-only segment - Find out more
  • NEW! Mobile Banking Security: The new channel is a boon for improving security, both real and perceived - Find out more
  • NEW! Money 3.0: Payments Go Mobile Apple, Bitcoin, & mobile apps are changing the game. What’s a bank to do? - Find out more
  • NEW! Digital Banking Forecast: Current, future and historical usage: 1994 to 2023 - Find out more

 

   

RSS Subscribe via RSS
RSS Subscribe to Comments



Email:


@NetBanker Twitter Feed



See all @NetBanker tweets