After an inspiring trip to FinovateEurope, being completely immersed in new technology such as voice/facial recognition, intuitive UIs, and hassle-free mobile payments, I was jolted back to reality when I came home and opened a letter from my bank.

The bad news arrived in a plain-looking envelope, always a bad sign. I was told that Chase Bank was reversing a $6,000 check we'd deposited a week earlier. 

I've seen some awful customer correspondence over the years, but this may be the topper. The bank would never send something this illegible to consumers (I hope), but I guess they think small business customers are savvy enough to understand the jargon and ignore the bad design and inconsiderate copywriting.

The bank is wrong. They can't just grab $6,000 from a small business owner and make no effort to apologize or explain what's going on.

Here's the backstory:

• We deposited a check over the counter at a Chase branch that was made out in US Dollars, but drawn on a foreign bank.
• It was accepted with no questions asked by the teller and credited to our account with next-day availability.
• A week letter, the bank changed its mind, removed the money from our account, and sent the letter shown below. 

I can understand putting a hold on the funds, but the utter lack of courtesy in communicating the issue is inexcusable. Ideally, the teller should have warned us about the hold period. But since that didn't happen, the bank should have sent me an immediate email apologizing for the delay and explaining the situation in simple vocabulary.  

Instead, I got an absolutely ugly letter (see below) that looks more like a Nigerian 419 scam than something a huge corporation would send.

Here are nine problems:

1. Mixed use of ALL CAPS and sentence case, bad spacing, and black & white logo, makes it hard to read, amateurish looking and potentially fraudulent.

2. "Convert Notification"
What does that mean? I've never heard the term before.

3. "Batch - 3040743 p. 1"
Huh?

4. Chase PO Box in Houston 
I deposited it in a Seattle branch, why am I getting a letter from 1,900 miles away?

5. "We are debiting your account"
Please no accounting jargon, just say that you took the money out.

6. "We are converting your 6000.00 item to collection"
What? You are sending a collector after me? What did I do? And why is it called an "item"? And where is the $ sign?

7. Reason: "Not eligible for immediate credit; new FX rate at PMT"
What? First off, stop with the abbreviations, FX and PMT. It won't cost anything more to spell out the words. And even knowing the jargon, this particular "item" was written in dollars (but did come from an international company), so it's a little hard to follow the logic here. 

8. "Industry standard for International Collections is 4-6 weeks"
What, I'm not getting the money for 4-6 weeks! Really? Why? Don't you think we are good for it if it were to bounce. And why didn't the person at the branch mention this in the first place?  

9. There nothing quite as user-friendly as a 16-digit alphanumeric confirmation number. It could at least have spaces or hyphens so I can read it. 

Bottom line: This is mostly an off-topic rant about one poorly written letter. However, had the message been delivered to me electronically, it could have included links back to the original check, links to FAQs covering international deposits, or even a direct form to ask questions.

------------------------------

Chase letter "explaining" a deposit reversal (27 Jan 2012)

Yesterday, I mentioned Capital One's self-service travel notification process. Another aspect of the service is a follow-up email before you head out of town (see below).

I like the email for a couple reasons:

• The well wishes make you feel good about the bank
• The message provides helpful contact info in case of trouble
• It's an an additional fraud check to ensure that it's really you traveling to Yakutsk next week

The bank even tells you to call collect. Nice.

Capital One could jazz up the message with more color and snappier copy (note 2), but it gets the job done.
-----------------------------

Capital One email to customers who've told them they are traveling internationally (31 Jan 2012)
Note: Sent the day before scheduled departure

Notes:
1. Picture credit: Greeting card at Zazzle.
2. I'm surprised Capital One doesn't use this opportunity to reinforce its travel rewards, mobile app, and zero FX fees. 
3. We've tackled remote banking customer service and messaging a number of times in previous issues of our Online Banking Report. The last one was Live Help earlier this year.

I get that multi-channel messaging is a mess. I understand that new regulation is creating huge backlogs in project queues. But 17 years into the Web-banking era, I should be able to service my bank account entirely online, if that is my choice. And more importantly, if I've signed on for alert services, there shouldn't be any surprises when I go to log in to my account. 

Yesterday, <largebank> failed me on both accounts (see note 1).

With Finovate Europe less than two weeks away, we are wiring large sums to London to pay for it. My bank got a bit concerned about all this outbound activity, which is good. I'm glad they are paying attention.

But how they went about notifying me about their concerns was simply outdated. Here's how it went down:

1. The bank called me from a toll-free number and left a voicemail asking me to call them back. Despite the fact that I get every alert under the sun, the bank did not send an email or text message. I don't know about you, but listening to voice messages from random 800 numbers is very low on my priority list. By mistake I did happen to hear it a couple hours after the fact. 
2. As soon as I listened to the message, I first went to my email to see if I'd also received a message from the bank to verify the authenticity of the phone call. Seeing nothing there, I attempted to log in to online banking to verify the call and assure myself that my account had not been drained. But guess what? The bank had disabled my account access and gave me a vague error message with instructions to call a toll-free number. The number matched the one on the voice mail so at least I could confirm it wasn't a vishing attack. There had been no mention in the voice mail of my account access being disabled.

Now, when you are 11 days out from an event and the cash in the bank is needed to pay for it, it's beyond disconcerting to be locked out of your account for no known reason.

Luckily, we were able to quickly assure the bank that yes, we really did need to wire that much money. So we are back up and running and our patient vendor simply had to wait one more day. (Update: I wrote this post yesterday. Today, the same thing happened again with another wire. While it wasn't a surprise this time, it's annoying.)

________________________________________________________________________________

A Better Process
________________________________________________________________________________

Let's repeat this scenario using an approach that preserves your customer's sanity while making it more convenient for those that favor digital channels:

1. Bank sees something odd so it freezes outgoing wire-transfer capability and sends me a text message, an email message, and also leaves a voice mail.
2. Instead of shutting down my account access, they let me into my account so I can verify that the balances are still there. And for extra credit, the suspicious activity is highlighted.
3. After confirming the transaction through an extra authentication step, the bank re-opens my outgoing wire capability.
4. For extra credit, let me simply authenticate the suspicious items by replying back to the messages (at least on smaller dollar items).

Now that I can breathe again, I can lay out three rules to guide your "suspicious activity" messaging:

1. Contact the customer via the channel of their choice (but also use others for backup in urgent situations).
2. Allow the customer to authenticate transactions without moving out of that channel.
3. Never completely disable online access (unless absolutely necessary). Yes, shut off transfer-out functions, but continue to allow "read only access." And post a red warning graphic within the account to draw attention to the suspicious activity. 

--------------------------

Notes:
1. I'm not identifying the bank because my "data point of one" may not be indicative of what other customers experience. But I will disclose the name "off the record" if you email me jim@netbanker.com.
2. For more on messaging, small business, security and much more, see our Online Banking Report (subscription required).

I glanced at my ING Direct eStatement alert today (screenshot below) to see what they had to say in the new year. The soon-to-be-Capital-One direct bank is usually pretty creative in its copywriting. And I was not disappointed today. Here's the pitch inside the alert:

I love the idea of a "Social Network...of Savers," a Facebook-like place where friends help each other keep spending in check and achieve politically correct savings goals such as the down payment on a home, the college fund, or a rainy day reserve.

But I don't think the Facebook model works in the real world (note 1). Even though it might be interesting to follow your friends' drunk spending (note 2), most users want this info to be kept VERY private (note 3). And in most circles, money accumulation is never openly discussed. Who wants to read about someone's "trip to Tahiti" savings goal when you are trying to get off unemployment?

In its recent email, ING Direct is NOT looking to create the Facebook of savings in any way. While the bank celebrates savings throughout its marketing (e.g., Wethesavers.com), this email offer isn't about sharing with your network, it's about selling to your network to earn a $10 referral fee per new account, up to $500. And that's OK, because everyone loves to share "found money."   
----------------------------

ING Direct email (4 Jan 2012, 9 AM Pacific)

Referral landing page (link)
Note: There's even a Flash demo of the referral split for the math challenged.

Notes:
1. I'm not saying that all sharing is a dead end. For example, sharing savings/spending goals can work very well within tight-knit groups such as extended families. And compiled/masked data about peer spending/savings is very promising (see Citi's Bundle joint venture). Finally, there are numerous opportunities for "social investing" (our 2008 Online Banking Report on the subject), because it's much more complicated and often openly discussed.  
2. There is room for "social savings" in the context of sharing discounts, money-savings tips, and so on. But that's not what ING Direct is talking about in this message.
3. Hence the pivots by the two "class of 2010" startups, Blippy and Swipely, which were founded on a "transaction-sharing" model.
4. And the bank makes its win-win. The new customer gets the biggest share, $25 for a savings account, a 70/30 split of the $35 up for grabs. New checking customers get $50, from an 85/15 split of $60.
5. For info on family banking, deposit gathering, transaction sharing, social investing, and much more, see our subscription newsletter, Online Banking Report.

Last month, I reported that my "aha moment" at BAI's Retail Delivery was the realization of just how challenging it had become to manage customer messaging across multiple channels and products.

Consider this 9x12 matrix of 108 product/message options a bank could conceivably use to reach a couple about their banking and loans. The whiteboard in the marketing conference room just won't cut it any more as the master scheduling tool. 

If that wasn't complicated enough, unique regulations can govern each channel and/or product.  Some examples: new mortgage rules for a single source of contact; time-of-day preferences (don't text me while I'm asleep); and privacy issues (don't alert my spouse to card charges).

And this table gets bigger if you add mail, in-branch, ATM messages or more products such as small business accounts, savings/CDs, and accounts held jointly with other family members. You could also add inbound vs. outbound calls/messages.

But one person's mess is another's opportunity. Fintech companies are hard at work on  solutions that turn multi-channel snarls into opportunities to increase satisfaction and/or cut costs.

One key player is Seattle-based Varolii, which delivered my aha moment last month. In a followup last week, I had a chance to sit down with CEO David McCann and have a wide-ranging conversation about customer messaging in the age of the voice/email/text/notifications. I was impressed, both with the enormity of the challenge of coordinating customer messaging, and with the solutions it offers (note 1).

Then yesterday, I met with Amit Ashman, Marketing Director at Nice, who happened to be here on a whirlwind visit from their headquarters in Israel. His company, which booked $200 million in revenues last quarter, provides call-center technology for large U.S. financial institutions. They have developed a very cool call-center/mobile-app solution about to be unleashed on the world. It blends self-service with agent support in a relatively seamless fashion that I suspect will be the industry standard five years from now.

It's convinced me to write a report on Multi-Channel Customer Support for our Online Banking Report (note 2). We are also looking to recruit more companies in this area to 2012 Finovate events. So, please email suggestions for solutions providers and/or financial institutions who are tackling the problem.  

-------------------------------------

Notes:
1. Great tagline, "Better return on interactions"
2. The multi-channel report won't be published until early next year. However, we've tackled remote customer service and messaging a number of times in previous issues of our Online Banking Report. The last one was Live Help earlier this year.

It's hard to believe that Mint turns four next month. It made its financial industry debut at our first Finovate conference (demo here, Oct. 2, 2007) after having launched to the general public a few weeks earlier.

With 5 million registered users, and public ownership (Intuit), it's now "the establishment" that dozens of startups look to unseat.

Mint made a large stride forward this week with the addition of a bill-due-date timeline to its Overview page, the page that users land on after login (see inset and first screenshot below).

The company also expanded its text and email bill-due-date reminder system. A wizard launched from a promotion on Mint's main page (screenshot 2, 3) prompts users to establish reminders for regular household bills.

Bottom line: Mint's billing timeline is a good example of the forward-looking approach that's much needed in online and mobile banking.

-----------------------------------------

A timeline of upcoming bills has been added to the Mint.com's main Overview page (25 Aug. 2011)

Mint promotes the new feature with a huge interactive banner on the main  Overview page

In this pop-up box, Mint gathers together likely bills and asks if you want a reminder

A timeline of upcoming bills has been added to the main overview page

------

Note: For more on online personal financial management (OFM), see Online Banking Report (published May 2010).

Several months ago (previous post), I wrote about Bank of America's online fraud-warning resolution center for consumer cards, MyFraudProtection. It's a great service, though a little hard to use.

At that time, I showed only the online functions. The more important piece is the email alert (below). It's a great way not only to reduce fraud, but also maintain good customer relations.

But it's still read-only. What I'm really waiting for is a truly two-way email, or better yet, text message. That way I can simply respond to the bank's question in a few seconds and both of us can get on with our business. 

Email alert from Bank of America: Irregular Credit Card Activity (11 Jan. 2011)

-------------------------------------

Note:
1. See our recent reports: Paperless Billing and Banking and Email Banking: Revitalizing the Channel.

We are approaching the 15-year anniversary of the first retail banking account alert. Britton & Koontz Bank was the first to offer them in the summer of 1996 (note 1). But alerts didn't become widely available until a few years later. 

Back then, you'd be lucky if you had three or four different alerts to choose from. And of course, there was no such thing as a mobile alert.

Today, banks and card issuers offer a dozen or more alert types capable of going to multiple email addresses, multiple mobile devices, or even to your land-line via voice message. Consumers are better served overall, but the wide range of options can be confusing.   

One solution is to use default selections. Users can select their preferred profile, and the bank establishes a set of recommended alerts. This profile selection could be made during online banking registration. For example:

• Normal alerts
• More alerts
• Less alerts

Another helpful practice is to show examples so users can visualize what they are signing up for. Discover Card uses this technique in its card-management area with popups that show both the email and text-message version of each alert type (see screenshot below).

Alerts are a vital part of online and mobile banking, so take time to educate users on the appropriate mix (note 2). It's also a great topic to cover in your blog or Twitter feed. 

--------------------------------------

Discover allows users to review samples of each alert type (28 April 2011)

Notes:
1. Signet Bank was the first major to offer email account alerts. We covered it in OBR 22 (Feb 1997).
2. For more information on alerts and messaging, refer to this Online Banking Report published in 2003.

ING Direct (USA) has been a prominent sponsor within Mint's online PFM. However, this is the first time I've noticed the bank advertising via email alert. And specifically, the direct bank is pitching its fee-free Electric Orange Checking account on the bottom of an email alert about a fee on my U.S. checking account. Excellent timing! 

It's unusual to see an ad on a Mint.com alert. I spot-checked a dozen or so during the past two months, and this is the only one with any direct marketing. But if it works, I'm sure we'll see more of it. Context-sensitive advertising is what the Web has been built on.

Mint.com email "fee charged" alert (16 Feb. 2011)

ING Direct landing page focusing on lower fees (link)

I'm just finishing an enjoyable novel by Cory Doctorow, Makers. It chronicles two inventors operating in the United States 15 to 20 years from now (the actual time period is not revealed) after another economic/tech downturn, similar to the 1999/2000 dotcom crash.

Readers will recognize most of the technology and information services used, e.g., email, IM, blogs and Twitter. But Doctorow's vision for these services a decade or two into the future is quite enlightening.

One area that's much improved over today's practices is the use of technology to prioritize the avalanche of information bombarding users. Here's a passage from the book:

He'd been tuning his feed watchers...for nearly a decade, and this little PR item rang all the cherries on his filters, flagging the item red and rocketing it to the top of his news playlist, making all the icons on the sides of his screen bounce with delight.

All you news junkies out there, isn't that how you want your email/RSS/Twitter/ Facebook streams to work? The most-important info pops to the top and alerts you at the same time. Google is doing great work along these lines with its Priority Mailbox introduced in August (previous post), which now works on mobile phones as well (see inset).

Opportunity for Netbankers: I'm looking forward to the time when my bank, card issuer and/or third-party aggregator does the same for my finances and alerts me to odd transactions, excessive charges, and potential savings. And more importantly, helps me take action to resolve the issue.

But it can't be delivered in a pile of email alerts sent every day. I tune those out. Just tell me about the IMPORTANT transactions triggering the "financial alarms" and keep mum about everything else. Thanks.

Today I received a letter from a large credit union (note 1) informing me that my certificate of deposit was up for renewal. I was given six choices at the bottom of a form (note 2) along with a postage-paid return envelope. 

Had I received that letter in 1988, I would have considered it state of the art. But in the modern world of instant communications and researching rates via Google, the communication was inadequate and reflects poorly on the CU's brand:

• No current rate info: I realize that rates are subject to change and are miserably low, but at least tell me what they are today so I have some idea of what's going on. While you are at it, remind me of what my rate was. Avoiding naming the specific rate is a huge red flag that yours is probably not so competitive. Plus, it's irritating when it's obvious how easy it would be to program current rates into the form letter. The CU did at least direct me to its website and call center to find current rates. However, the call center had no main menu option for rates, so you had to guess which number made the most sense. 
• No email/call center option for choosing: The only way to communicate my investment choice is to return a postage-paid envelope. How about an email address, phone number of even a simple URL?
• No email notification: I signed up for this account online, and the bank's marketing messages arrive via email. Why didn't I get an email asking me which option I prefer?
• No clear info on what happens next: According to the fine print buried in the accompanying Truth-in-Savings disclosure, my certificate will automatically renew if I take no action. But nowhere in the main letter does it say that, nor is the deadline for taking action spelled out. The "current maturity date" is provided, but that's using banking lingo that could be clearer.
• No niceties (or even a sales pitch): The letter was bare bones with just two sentences and an info box about my CD (note 3). There was no salutation, no signature, no thank-you, no names of anyone at the CU, no local branch info, no encouragement to renew, and so on. 

--------------------------------------------------

Notes:
1. As previously noted, we generally avoid posting the name of financial institutions that we criticize here; but we'll privately tell readers so long as it's not posted online (email me if you are curious).
2. The choices:
     A. Change term to 6, 12, 24 or 36 months (it was already 12 months, so that was a
          bit confusing, too). 
     B. Deposit to another account with a blank for writing in the account number
         (and no instructions on whether that had to be an account at the CU)
     C. Send a check for the balance (but with no ability to take a partial payout)
3. My CD is small ($500) and was set up online through a now-defunct third-party. So it's very possible that there are different communications sent to larger CD holders, and/or those that were acquired by a specific branch.

Lending Club, which recently surpassed $12 million in monthly P2P loan volume (see below), does a great job concisely communicating important account info. The startup earned an "A" in our recent report on transaction alerts (note 1).

Below is another example of its exemplary email alerts. In just 30 words, the company reinforces my impressive rate of return and my account balance. Then it seamlessly goes for the sale, encouraging me to put my cash balance to work by making more loans.

The only improvement I'd suggest is making the call to action, "Browse available Notes," more prominent. First, it's not clear that it's a link. Second, what does that even mean? Ideally, it would be Lend Now, although I understand that terminology is not "SEC friendly," so Invest Now, should work.  

Bottom line: It's a win-win to provide encouragement every now and then about how customers might put their idle balances to work. Just don't overdue it.

Lending Club "Idle Cash Alert" (27 Sep. 2010)

Lending Club loan volume: Aug. 2009 through Sep. 2010

Note:
1. See previous post on OBR 181/182 published July 2010

In our most recent report, Email Banking: Revitalizing the Channel, ActivePath was named the third OBR Best of the Web winner in 2010. The company was cited for its unique plugin software that turns the user's email inbox into a mini online-banking center.

We believe that the future of banking information delivery is outside the website. Increasingly, users will rely on information pushed to them through Facebook, Twitter or RSS feeds, to mobile phone apps, and to the email inbox. ActivePath's solution plays into that trend.

The just-launched Israeli startup becomes the 78th company to win the designation since we began awarding it in 1997. The other two winners this year:

• Chase Bank for its two-way text-message account-alerts (here)
• Blippy for its transaction-sharing platform (here)

----------------------

Note: OBR Best of the Web awards are given periodically to companies that pioneer new online or mobile banking features. It is not an endorsement of the company or product, just recognition for what we believe is an important industry development. Recent winners are profiled in the Netbanker archives.

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 in 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 more quickly identify fraud or errors. And, as with 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, banking 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.

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:

----------------------------------------------------------------------------------------------

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

----------------------------------------------------------------------------------------------

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.

On August 9, Bank of America redesigned its email alerts (note 1). The biggest change came in repositioning, renaming, and highlighting a security feature, "last login time." The info is now in a prominent gray box at the top called the Security Checkpoint. Previously, it was buried in the middle of the left-hand column (see Before screenshot below).

While the Security Checkpoint is a nice bit of security marketing (note 2), I'm not sure how much additional fraud it will thwart, if any. But it's good for the bank to appear to be doing all it can to protect customers.

Bank of America already had one of the best alerts in the business, earning an A in our most recent report (note 3). So I'm not sure why they needed a new design; perhaps, it's just to keep things fresh. However, the redesign did nothing to fix our one criticism of the bank's alert, the lack of meaningful info in the preview line.

After: New Bank of America email alert design (17 Aug 2010)

Before: Previous email alert design (8 Aug 2010)

Notes:
1. At least, that's the first day the new style landed in my inbox.
2. For more info, see Online Banking Report: Marketing Security.
3. For more on email alerts, see last month's Online Banking Report: Email Alerts & Transaction Streaming.

SmartyPig is the first of my personal banking accounts that allows me to choose the level of detail provided in email alerts. The startup just moved away from sending detailed info in all messages to offering the option to receive a general notification that requires logging in for specific balance/transaction info (see below; link to SmartyPig blog post).

This is a basic level of customer choice that every financial institution should put into their product roadmap. For me, and a great many customers, alerts are practically worthless if they don't include some detail on the transaction. On the other extreme, many customers are not at all comfortable with actual data being included in an email and won't use alerts if that is the only choice. Most customers fall somewhere in between. 

In the future, it won't be a black-and-white decision. Users will be able to select varying levels of detail depending on the account, balance level, email address used, time of day and so on.

---------------------------------

And while we are talking about SmartyPig, check out their very thorough security section. The startup covers far more ground than most financial institutions.  Here are the topics covered:

• White-hat hacker tested via Primeon
• Verisign Extended Validation SSL
• Security scanned daily by McAfee
• TRUSTe privacy seal
• FDIC info for its banking partner
• Secure login
• Firewall
• Encryption
• Constant surveillance
• Technology updates
• Browser support

Note: For more info on email alerts, refer to our most recent Online Banking Report.

Two months ago when we were sketching out the next Online Banking Report (see note for links to the report), I thought it would be useful to look at the real-time Web and how consumers were becoming accustomed to status update feeds through Facebook and Twitter.

Old-school alerts: Email
As I wrote the report, I realized that most online banking users still want to consume transaction data the old-fashioned way, through email and over the Web. We did a quick consumer survey that confirmed our hypothesis, with email preferred 2-to-1, over text and voice messaging. Even among the under-35 crowd, email and text alerts were tied.

So we also took a detailed dive into email alerts, developing 22 recommendations for state-of-the-art email messages. And we graded 16 alert examples from 13 financial institutions. Overall, our sample scored very well with Bank of America, Lending Club, Mint, ING Direct, PayPal all earning A grades. Also U.S. Bank, Schwab, Wells Fargo and Prosper were just slightly lower, each with a B+. 

The future: Real-time streams/feeds/updates
While email, text or voice messages work well for alerts, they are not as desirable for keeping users informed of all their transactions. Once you start getting multiple emails each day from your financial accounts, it becomes overwhelming and you stop opening them. That's why transaction feeds are a promising means for keeping customers up-to-date on an ongoing basis. In a world where so many consumers are following a Facebook news feed, Twitter feed, or good old RSS, it's only natural that financial transactions will join the mix.

But it's still a long way off. For the most part, consumers do not want commercial messages cluttering their news feeds. And they are understandably confused about privacy/security settings, and don't feel confident that bank transactions delivered via Twitter direct message, are not being displayed to the world.

However, once we get past that educational challenge, we believe a significant number of consumers will prefer tracking their finances via feed (mostly via mobile) instead of logging in to online banking multiple times per month.

To learn more about what could happen in this area, we looked at three transaction-feed startups:

• Blippy (previous coverage, FinovateSpring 2010 demo)
• Strings
• Swipely (previous coverage)

Bottom line: Real-time feeds are the future, but many years away from making it past even the earliest of adopters. For most financial institutions, the important thing now is to make sure you have great email and text alerts. But for those looking to differentiate with technology, feeds provide an intriguing opportunity. 

------------------------------------

Note:
1. The report is available at no extra charge to OBR subscribers here; and can be purchased for US$495 by others here. See the Table of Contents here (PDF). 

This week I received an invitation to Swipely's closed beta (request one here). As a fan of its closest competitor, OBR Best of the Web winner, Blippy (note 1), I've been looking forward to testing out the newest entrant. 

Both services allow you to register ecommerce accounts, including credit or debit cards, so that transactions can be streamed to your friends and family, or the whole world if you so choose (note 2). Detractors cannot figure out why anyone would want to do that, but that's also what people said about Twitter, which is now approaching 200 million worldwide monthly visitors. 

But I'm convinced the naysayers simply haven't used Blippy or Swipely. The startups are simply convenient platforms for sharing interesting experiences, downloads, or purchases. It's not the collapse of privacy as we know it (that would be Facebook). The typical Blippy/Swipely user might stream their Netflix queue, iPhone downloads, or a meal eaten at a local favorite.

Contrary to what you might read, there is very little oversharing. Generic posts such as "spent $7.29 at CVS" are rare. Sure those people exist, just like the Twitter users sharing what they had for breakfast, but they are the exception. Like Yelp or Facebook, most users strive to share things that are interesting to both them and others (note 3).

Providence, RI-based Swipely, which has already raised $8.5 million in capital, encourages users to comment and rate purchases on a 5-point scale. If it catches on, Swipely could build a database of user experiences and merchant ratings that challenges Yelp or TripAdvisor (note 4).

Bottom line: Will the services prosper? I think semi-automated transaction sharing is here to stay and will become a standard feature in larger social communities, e.g., Facebook, Twitter and Yelp. It also makes sense as part of larger OFM/PFM efforts (note 5).

I also think there is a place for limited transaction sharing among customers of financial institutions, primarily among joint account holders and employees of smaller businesses (see previous post).  

On the other hand, I'm not sure if Blippy/Swipely will become popular destinations on their own. It's more likely they'll end up powering services baked into other sites. That said, if the startups can figure out how to get the Internet masses to make the effort to rate and post millions of transactions, they could become household names.  

Swipely transaction stream across all users (7 June 2010)
Note: My just-posted transaction is at the top of the stream

Notes:
1. See Blippy's FinovateSpring 2010 demo here; see previous posts here.  
2. Swipely doesn't currently support direct downloads from ecommerce accounts, but you can forward email receipts to the service for posting.
3. Both services offer a mix of automation and manual entry to make sure the posting process isn't too much of a burden, but keeps things relevant. On Swipely, the default privacy setting is for the user to manually approve each transaction before it is posted. And in contrast to Blippy, the amount of the transaction is NOT included in the post.
4. You can understand why the VCs are investing.
5. See our most recent Online Banking Report for more on Online Financial Management Features for Online Banking.

It's been 13 years since email bank-account alerts first appeared in the United States (see note 1). And for 12.99 years, users have wished they could just reply back to the message to cover a checking account shortfall. 

Well finally, Chase Bank has delivered on that promise with real-time Chase Instant Action Alerts:

Chase account holders now receive real-time text-message alerts when their account drops below preset minimums. Customers can initiate funds transfers by texting back transfer instructions. Currently, transfers can be initiated only via text message.

While we would have been more impressed if the service covered the more common email alerts, the new feature does move the online/mobile banking state-of-the-art up a notch. That's enough to earn Chase the second OBR Best of the Web awarded in 2010 and the 77th all-time (notes 2, 3).

The bank is promoting the new feature via Google AdWords (see screenshots below). And, they've done a good job identifying the key benefit in the landing page title:

Avoid Overdrafts | Chase Instant Action Alerts

I don't see any mention of the new capabilities on the Chase homepage today, nor does it appear to be touted within online banking (note 4). However, a site-search for "alerts" drives users to the landing page shown below.

Advertising on Google search for "Chase email alerts"
(2 June 2010, 9 AM from Seattle IP)

Landing page (link)
Note: The top graphic is animated, showing how the alert and reply work (see images at the top of this post)

Notes:
1. Signet Bank was the first major to offer email account alerts. We covered it in OBR 22 (Feb 1997). We didn't learn until a few months later that community bank Britton & Koontz actually beat Signet to market with alerts launched in the summer of 1996.
2. You could argue that Chase is not first with this capability. The handful of U.S. text-banking programs that support transfers are already offering the same capabilities as Chase (for example, see text commands at Natco Credit Union).  However, Chase is the first major bank to provide the functionality, as well as the first to really promote the reply-back function as a major benefit.
3. OBR Best of the Web awards are given periodically to companies that pioneer new online/mobile banking features, products, or enhancements. It is not an endorsement of the company or product, just recognition for what we believe is an important development that "raises the bar" in alt-delivery. Chase's Instant Action Alerts are the 77th recipient since we began the awards in 1997. It's the second for Chase. The bank also won in 2007 for being the first major U.S. bank to roll out text banking. For a list of the top innovations of all time, see our January 2010 Online Banking Report.
4. It was not mentioned within my business banking account or consumer credit card account. I don't have a Chase consumer checking account.
5. For more information on alerts and messaging, refer to this Online Banking Report published in 2003.

Have you ever had a flat tire because you forget to look at your tire pressure? I have, more than once, but not since I installed these handy little valve caps with the "green is good to go" visual signal. And they only cost about $6 per set.

Not only do they save you from the hassle and cost of a flat tire, they could save hundreds of dollars over the car's life with better fuel economy running on properly inflated tires. And flat tires on the freeway are a serious safety issue. 

This begs the question: Why don't car companies install these on all cars (note 1)? Is it really worth the potential thousand-dollar cost to your customers to save a buck or two in the manufacturing process? 

Relevance for Netbankers: What things does your financial institution do to save a few pennies that could end up costing your customers similar financial pain?  Here are my three pet peeves:

• No access to credit score: In a perfect analogy to the tire pressure gauge above, show a green/yellow/red indicator within online banking to demonstrate the health of my credit; it could be bundled with a special checking account and positioned as a premium service.
• Remove my data after six months: My primary bank still only posts six months of transaction data online. That might have made sense when it cost a $1+ to store 7 years of records online. But in an era when you can buy a 1 TB drives for less than $100 at retail, there's no excuse for this continued practice.    
• Refuse to use text messages: If my bank account is rapidly approaching zero, or someone in the Bronx is trying to buy $600 worth of video games with my credit card, drop me a text message, please.

Rant over. Have a great weekend.

---------------------------

Note: Yes, I know that higher-end cars have tire-pressure idiot lights. And I'm sure there engineering-related costs and liability issues makes the price tag bigger than an outsider would imagine.

One of the most important trends in the online/mobile world is the so-called real-time Web. Here's how Wikipedia defines it:

...technologies and practices which enable users to receive information as soon as it's published, rather than requiring that they check a source periodically for updates.

Online banking should have gone real-time long ago, but privacy concerns and a legacy of batch processing -- not to mention the 100-year credit crisis -- have kept info delivery in very non-real-time at most financial institutions (note 1).

As balance/transaction email alerts appeared on the scene in 1996/1997, the perfect solution to keep consumers informed on a timely basis seemed assured. But for most users, financial alerts have not lived up to their promise. Why?

1. Users must remember to establish alerts while they are banking online

2. Users must establish proper parameters so they are not overwhelmed with alerts, or receive too little info

3. Those parameters must be tweaked as necessary

4. Users must select the proper email inbox(es) for the alerts

5. Users must read the alerts in a timely fashion

6. And of course, act on them if necessary

Frankly, that's just too much work for most online bankers. Sending alerts to a mobile device may help since it is typically more immediate than email. But that depends on the user and whether they really want banking messages in their text-message stream.

But we think many users, now accustomed to viewing a stream of info all day from Facebook, Twitter, FriendFeed, RSS, and so on, will want similar delivery of financial info. Some will want their financial info to stream into their overall news feed (e.g., via Facebook, Twitter, etc.), others will prefer a separate dedicated channel (e.g., Blippy note 2, Strings). And the old-school folk will still prefer email or text-message feeds.

Once the feed is established, users will want to interact with the data, for example:

• Tagging entries for budgeting/tax purposes
• Sharing specific transactions with friends, spouses, accountants
• Forwarding transactions to bookkeeping or managers for reimbursement
• Replying to the bank/merchant regarding incorrect transactions  
• Flagging transactions for later review

The real-time Web turns online banking on its head. Creating a daily dialogue with customers, rather than one-time sessions where users log in every few days, then hope nothing goes wrong before their next login.

There are advantages in both models, but it's not really your choice which one to offer. The world has gone real-time: You can either join in or have your customers migrate to Mint/Blippy/Wesabe to tap their financial feed.

Notes:
1. This is characterization of the U.S. situation; many other countries are much further ahead, and have been operating under real-time info-flow for years. 
2. We believe there are a number of practical applications for Blippy's technology; see our previous post.
3. For more info on financial messaging and alerts, Online Banking Report subscribers should review our 2003 report on the subject.

Blippy has been one of the more controversial financial entrants in the past few years. Observers have called it the "end of privacy as we know it," a way to take "oversharing to a dizzying new level," and a "great tool for phishers." And those are just the people who like it.

Blippy, a kind of Twitter meets Yodlee service, allows users to stream their purchase activity to the startup's website. Users can choose to publish data from credit and debit cards, bank accounts, and/or directly from purchase activity at ecommerce-partners sites (see list below). It's the ecommerce transaction stream that provides the richest data describing the actual product purchased or rented rather than just a dollar total.

For example, here's an entry from @Julia who's connected her Amazon account directly to Blippy (note 1)  As you can see the Amazon purchases are shown in detail and one of the items, a giraffe teether, has elicited a question/comment from a friend (highlighting ours):

In comparison, credit card transactions list only the merchant name and not what was purchased. However, Blippy allows users to annotate their transactions to add that detail, as you can see in the following entry. 

One of the most common ways Blippy is used is to stream media consumption via iTunes and Netflix. Here are the three Netflix movies on their way to @crobertsjr:

The Palo Alto-based startup received a $1.6 million angel round in January 2010 from Ron Conway, Jason Calacanis, Twitter's Evan Williams, Sequoia Capital, Charles River Ventures, and others. 

How it works
I got my first taste of Blippy after it opened to the public on Jan. 14. It's simple to get started, calling for just an email address, screenname and password. You also have the option of finding friends using your email address book or choosing from a list of 13 suggested people including Blippy founder Philip Kaplan (@PUD) and interstar Jason Calacanis (@jason).

But you don't even need to register for Blippy to see it in action. There's a live stream on the homepage that anyone can watch (see screenshot below). If Blippy follows the Twitter/Facebook model, they will soon have an API available that will let outside developers tap the data stream.

Usage stats

• Number of beta users: More than 5,000 who streamed $4.5 million worth of transactions
• Most-streamed merchant: Netflix with 54,000 entries
• Most prolific spender (that I ran across): Foo Bar (@foo), who does not identify himself other than CEO at a gaming startup, has linked his business credit card and streamed more than 350 purchases worth more than $300,000 (he's a big online advertiser at Google, MySpace, Facebook).
• Most-followed user: Leo Laporte (@leolaporte), from the Premiere Radio Network, with more than 2,600 followers

Features/benefits

Data sharing within workgroups:

• Ability to share financial transactions within a family, a workgroup, or small business. It would be a great way for financial gatekeepers, e.g., the bookkeeper, CFO, or even board members/investors to keep tabs on company spending (see @foo above).
• Ability to annotate expense streams. Users can add short descriptions to expense items so their followers can see the specifics.
• Ability to discuss/comment on expense items. For example, CFO can ask "why did our Google AdWords expense spike yesterday?" and anyone in the group can comment back with an answer or speculation. We use Yammer in our company for this type of back and forth. 

Product research/social networking:

• Ability to find other customers of the same store
• Ability to discuss product or media purchases with friends or strangers
• Ability to post positive/negative info about purchases (yours or others)
• Ability to find previous purchasers of a product you are considering (currently not supported through search)
• Ability to compare how much people paid for a certain item (not currently supported through search)

Personal financial management:

• Ability to annotate expenses for future reporting (e.g., marking taxable items)
• Store transactions free for as long as Blippy keeps the servers running
• Ability to search own transactions

Financial institution opportunities
1. Card companies and banks should create similar sharing functionality for alerts; especially for small business clients. While public posting of purchase data may never have mass appeal, there are many private uses for real-time transaction data.

2. PFM's should be building this functionality now to get out in front of Mint/Intuit who could simply acquire Blippy and incorporate real-time data flow within weeks. 

3. Once the Blippy API becomes available, banks should tap it to allow their customers to use it directly from within online banking.

Analysis
Whether Blippy lives on as a standalone service is difficult to predict. It depends on whether these capabilities are incorporated into other social networks, particularly, Facebook (note 2) and Twitter. And how fast card issuers move to make real-time transaction info easily available to their own customers.

But regardless of where the company nets out, Blippy should be credited with pioneering real-time financial transaction flow, something every financial institution and ecommerce company will support in the coming years. As a result, we are awarding Blippy an OBR Best of the Web award, our first of 2010 and just the third in the past 14 months (note 3, previous winners).   

Blippy Homepage (14 Jan. 2010 7 PM Pacific)

 Optional sign-in to Gmail, Yahoo or AOL to locate friends on Blippy 

Purchases/activity at these merchants can be automatically tracked
Note: 13 ecommerce merchants currently participate (Amazon, Apple iTunes, Audible, Blockbuster, GoDaddy, GroupOn, Netflix, SeamlessWeb, Stubhub, Threadless, Wine Library, Woot, Zappos)

The Blippy real-time transaction stream
Note: You can choose to watch all activity or just that of the people you are following

Notes:
1. If she hadn't given Blippy her Amazon login info and linked only her credit card, there would be no product detail. It would just show as $80.95 spent at Amazon.
2. Blippy is similar to Facebook's ill-fated Beacon service launched in Nov. 2007. The service was quickly toned down, then eventually dismantled, due to the privacy brouhaha that ensued. Blippy is very different because its users are signing up specifically to share purchase info. 
3. OBR Best of the Web awards, from Online Banking Report, are given periodically to companies that pioneer new online and mobile banking features. It is not an endorsement of the company or product, just recognition for what we believe is an important development. Blippy is the 76th recipient since we began awarding it in 1997. There were just two winners in 2009.

I love startups. Just when you think you've seen everything, along comes someone doing something that no one would have ever thought of five years ago, or in this case one year ago.

The latest inspiration: Blippy. The service allows you to automatically broadcast your credit or debit card purchases using the Twitter/Facebook model (see screenshot below; note 1).

The first question everyone asks is why? (see comments at TechCrunch) But really, it's not much different than broadcasting personal details via Twitter or your whereabouts via Foursquare, especially if you limit viewing to friends. The founder, serial entrepreneur, Philip Kaplan explains in the TechCrunch interview, that he has one credit card for "social purchases" broadcast on Blippy and another for purchases he prefers to keep private.

Blippy will contain privacy controls that allow users to share everything or keep it within a closed loop of friends. The company also envisions many other privacy controls to turn the service off and on, allow users to approve transactions before publishing, suppress certain merchants, or merchant categories, and so on.

The use cases shown so far are centered around media purchases, for example using it to automatically tweet (blip?) what song or movie you bought on iTunes or social "check ins" where the service lets people know you just bought coffee at Starbucks. But I can see where it would be helpful for spouses to "broadcast" purchases only to each other. Or for a salesperson to broadcast their purchases to their assistant to build expense reports on the fly. 

The service is in closed alpha (only in use by a handful of friends and family, note 2) as the three-person company gears up for a launch. You can follow Kaplan on Twitter (@pud) for more info.

My take: I like the idea of easily sharing purchases with joint-account holders or a bookkeeper. But many (most?) online banking systems and PFMs already allow this through the alerts system. You may want to boost education efforts on this capability.

As for Tweeting about songs downloaded via iTunes, wouldn't most users prefer to maintain more control over that by simply using Twitter or Facebook to directly type a short note? But we know from experience, if there's a way to do something with less effort, it stands a good chance of succeeding.  

I'm not expecting widespread adoption any time soon, but I think there is a market for sharing spending transactions.

Here's something for innovative FIs to consider: Add a "share this" button next to credit/debit card transaction and let users send the info via email, Twitter or Facebook with a couple keystrokes (see inset from FiLife).

I know it sounds far-fetched, but it might be just the thing to make your card stand out with heavy users of social media.

Blippy homepage showing spending stream (16 Dec. 2009)

Note:
1. For more info in Twitter, see our Online Banking Report on the technology published in May.
2. Twitter's Evan Williams is using Blippy as shown in screenshot taken by CNET's Rafe Needleman in his article earlier this week.

If you are like me, you put off filing the dreaded 1040 as long as possible, and may often have no clue that the final due date (for extended returns) has snuck up on you once again. Then there are those quarterly filing dates that aren't spaced three months apart (see screenshot; note 1). 

That's why every financial institution that serves small businesses and the self-employed should do three things:

• Post the IRS due dates on its website (see screenshot)
• Provide email/text reminders (opt-in naturally)
• Blog/Twitter them

Small biz accounting startup Outright.com (a Finovate 2009 presenter) is ahead of the curve with its handy Self-Employment Tax Calendar:

Note:
1. I've been paying quarterly estimated taxes for 15 years, and thanks to the Outright.com calendar, this is the first time I realized they were spaced 3-2-3-4 months apart. No wonder, I can't remember. 

There was an interesting piece by Jessica Vascellaro in the Technology supplement of today's Wall Street Journal. The title says it all, "Why Email No Longer Rules....and what that means for the way we communicate."

The primary thesis:

• Old-school email is a passive way to communicate, more like a letter, and has been overrun by more information than the technology can manage.
• It will be replaced by more active services (e.g., Twitter, Facebook) that are akin to a conversation with filtering technology to keep noise levels down.

But Techcrunch's MG Siegler's take on the matter is even more profound. He argues that the winning technology will be something that combines both active and passive communication, such as Google Wave (see inset; short video explanation here). Users will be able to choose between active or passive, or anything in between, depending on the situation.

Relevance for Netbankers
The passive vs. active communication metaphor is a good one for banking too. Passive banking is the old way of doing things. We waited for our monthly statement, balanced the account, and walked in to the branch or called customer service if there was a problem, usually many weeks after the fact.

Passive banking is not a bad thing. As long as there are no problems or financial shortfalls, it's the desired state for most customers. 

Telephone banking, then online banking, made it much easier to keep closer tabs on your account. Instead of reviewing transaction activity once per month, most users log in at least once per week to review activity. This helps ease anxiety during the intervals between looking at your data.  

But it's still passive in the sense that a user deals with banking only when the choice is made to log in. And that passive nature limits the usefulness of online banking in situations where a user needs to pay attention NOW! For example, security issues, low-balance alerts, over-budget warnings, and so on.

Enter mobile banking. With text messages or direct-to-the-phone alerts, users can have an always-on, or active, connection to their accounts. This is great for those infrequent, yet urgent, events such as authorizing an unusual card transaction.

But most users will want to be in active banking mode as little as possible. So the challenge for financial institutions will be to make it easy for mobile users to balance "active banking" (alerts, warnings) with "passive banking" (logging in, requesting more data, changing settings and preferences).

Ultimately, companies that well manage this communication challenge will have customers for life.

Notes: For more info on mobile banking, see our Online Banking Report: Mobile Banking via iPhone (March 2009) as well as our earlier reports on Mobile Banking (Feb 2007) and Mobile Payments (April 2007).

In 2006, we predicted that every major bank and credit union would someday have a blog (note 1). That prediction was looking downright awful until Twitter came along. The popular, and much-hyped service, is part blog, part social network, and part text-messaging.

Financial institutions have embraced Twitter much faster than blogging because it's low cost, drop-dead simple to implement, and relatively cost-effective to staff and manage. Our good friend, Christophe Langlois, who has been tracking social media implementations at Visible-Banking for several years, has identified 120 financial institution blogs worldwide. In comparison, Christophe is tracking more than 700 Twitter accounts. Similarly, Jeffry Pilcher's exhaustive Twitter directory at The Financial Brand lists about 600 Twitter accounts in use by financial institutions.

Vantage CU takes the Twitter plunge
Although Twitter can successfully be used as a simple one-way broadcast medium (i.e., microblog), it's also a powerful two-way and group communication service (note 2). Wesabe, in 2008, and Xpenser, earlier this year, were the first online PFMs to leverage Twitter for posting transaction info to user accounts. But St. Louis, Missouri-based Vantage Credit Union took that one step further by allowing users not only to query their accounts, but also to move money between them.

At the core, Vantage CU's Twitter service is little different than hundreds of SMS/text-message mobile-banking services already in use around the world. But for Twitter users, it allows account queries from anywhere a Twitter client is loaded: smartphone, laptop, or desktop (note 3).   

How it works
Vantage CU posted videos showing how it works. But if you are a Twitter user, you can skip the tutorial. You'll understand right away: After signing up for the service at Vantage (inset), simply follow the CU on Twitter (@myvcu) and send them a direct message whenever you want to see your balance, recent transactions, or to initiate a funds transfer.

While the process is relatively intuitive for Twitter users, the command-code language limits the usefulness. The results look like a throwback to the DOS command line circa 1985 (see first screenshot below). It would be much simpler if the CU offered plain English commands and account nicknames, e.g., "transfer $500 from wifechecking to mychecking" instead of "#trans f9 t0". Ideally, the CU would support short codes for its power users and plain English commands for everyone else.

That said, it's pretty simple to remember how to make a checking account balance inquiry, "#bal 9" (9 is the code for checking), which is the primary way the service will be used.

Website implementation
Few members will actually use Twitter banking, at least initially. The main reason to embrace Twitter is for the publicity and brand value, especially when you are first.  Vantage takes full advantage of its first-mover position, placing a headline on its homepage, along with a Twitter feed directly below.

Other things Vantage CU does right:

• Posted four how-to videos (although, the CU needs to choose a faster host for the videos because the Screencast-based videos run way too slow)
• Posted FAQs, instructions, and screenshots
• Wrote a blog post about the new service
• Proactively reached out to bloggers resulting in great initial coverage (Financial Brand, Everything CU, and Currency Marketing) which can help bring mainstream press coverage later
• Allows users to subscribe to the Twitter feed via RSS (directly from the CU's homepage)

Analysis
The PR value alone should more than justify the expense of Vantage CU's Twitter service. And if Twitter continues to work its way into the fabric of consumers' daily lives, the service could attract a decent following.

In keeping with our 10-year tradition of recognizing new online "firsts," we are awarding Vantage a 2009 Best of the Web award (note 4) for being the first in the world with full-service Twitter banking.

Vantage Credit Union homepage featuring new Twitter service (5 Oct 2009)

Notes:
1. See our Online Banking Report: Bank 2.0 (Nov. 2006).
2. For more info, see our Online Banking Report: Leveraging Twitter (May 2009)
3. However, text-messaging users would likely prefer to make balance inquiries directly from their phone's SMS function, rather than taking the time to open the Twitter app or website. The most likely user is someone already using Twitter who decides to do a quick banking inquiry while Tweeting. 
4. OBR Best of the Web awards are given periodically to companies that pioneer new online and mobile banking features. It is not an endorsement of the company or product, just recognition for what we believe is an important development. Vantage Credit Union is the 75th recipient since we began awarding it in 1997.

This is the first time we've seen a financial services company reach out and congratulate users for a job well done. In this case, ING Direct's U.S. retail investments unit, ShareBuilder, sent a congratulatory email message to me after two months of investing through its Automatic Investment Program, which pulls money from outside checking accounts.  

The message has several purposes:

• To reinforce the investment decision
• To encourage customers to use ShareBuilder Research
• To incent users to move other brokerage accounts to ShareBuilder with the $100 bonus offer (see landing page, second screenshot)

Analysis
What's not to like here? It's timely, relevant, to-the-point (only 75 words in the main body copy) and makes users feel good about themselves. The same thing could be done with loan payments, debt reduction, savings account balance growth, and so on.

Email: ShareBuilder automated savings congratulations
(3 July 2009, 6:41 AM Pacific Time)

Landing page for $100-bonus offer
Note: The offer is co-branded with Wells Fargo, which is where I originally set up the ShareBuilder account eight or nine years ago.

Side note: Online account opening warning box
When looking at the new account application, we encountered this popup when attempting to leave the unfinished app and navigate to the ShareBuilder homepage (see note 1).  

Note:
1. For more info on the subject of online apps, see our Online Banking Report: Online Account Opening, published two weeks ago. 

I love personal financial management websites. Not so much for the reality, actually I hate tracking expenses, but for the promise. The illusion of having everything under control, never overdrafting, never missing a payment, and with perfectly-shaded multi-color pie charts just a click away (inset from Mint). 

But I've always thought that once banks and credit unions added basic PFM functions to their online banking services (see note 1), it's game-over for most independent PFM sites. They would have to either license their platform to financial institutions, sell out, or close their doors.

Now I'm not so sure.

Mint did something recently that made me reconsider. It was really pretty simple when you think about it. Yet as far as I know, no bank, card issuer, or even credit union has ever taken this on. 

The Mountain View, CA-based startup scanned their members' credit card statements to identify bogus charges from a known scam. And the company plans to make the resulting fraud alert service a standard part of its offering.  

From American Banker (23 Jan 2009):

Mint Software Inc. is planning to roll out a tool that will automatically scan its 800,000 users' accounts for potentially bogus charges....Aaron Patzer, Mint's founder and chief executive, said the idea for the new product came after his company heard of a scam involving Adele Services of Melville, N.Y., a bogus merchant that was making 25-cent charges to millions of consumer accounts. The news was widely reported, and Mint decided to check its users' accounts its to see if any had been affected; it found 800 that were.

Score 1 for the upstarts.

Bottom line: If the online PFM purveyors harness technology to take better care of banking customers than the banks themselves, especially with practical, money-saving ways such as Wesabe's Cutback Tool (below), the newcomers have a bright future indeed.

Note: For more info, see our Online Banking Report on Personal Finance Features for Online Banking.

Visa today put a stake in the ground to be viewed as the innovation leader, a position that American Express has claimed for some time with its chip cards, social media efforts, and even an online lab site. At today's "innovation briefing" in NYC, Visa announced several pilots and upcoming initiatives.

Mobile person-to-person transfers
The most far-reaching announcement was the ability for Visa cardholders to transfer funds from one card to another via mobile device. So far, just one bank is participating in the pilot. US Bank says it will make the service available to a few thousand cardholders as a test later this year. PaymentsNews has more details here.

It sounds good, but as always the devil is in the details. For instance:

• Through what hoops will cardholders have to jump to enable their card and phone for the service?
• Will the transfers be treated as cash advances triggering fees and finance charges?
• Will it be available to all cardholders using any mobile phones? 

Visa jumps on the android bandwagon
A more immediate innovation is a location-and-alert-based service built for Google's android platform, a new mobile system launching in late October. Visa's new service, to be rolled out initially by Chase Bank (no time frame given), promises some important new developments:

• "Near real-time" purchase alerts (see note 1) so you can see immediately whether your server added an extra digit in front of your tip on that bar tab. The real-time alert pilot was announced a month ago (here) involving several thousand accounts at PNC Bank, SunTrust Bank, US Bank, Wachovia, Wells Fargo, Royal Bank of Canada, TD Bank, and Vancity.
• Visa merchant finder based on your location-based/GPS technology  (nice!) with targeted marketing offers (hmmm??). The merchant locations will be integrated with Google Maps.

Again, PaymentsNews has the entire press release here.

Notes:
1. Visa says that the alerts will arrive "typically before (the consumer) leaves the store."

2. For more information, see our Online Banking Report on Mobile Money & Payments.

I heard from a new company last week that has created a service to help life insurance and bank-account holders to notify beneficiaries periodically that they are named on the account. According to FindYourPolicy.com (see screenshot below), $1 billion in insurance policies go unclaimed each year due to unknown or lost beneficiaries. Although it sounds simple, tracking down beneficiaries can be a timely and expensive process. Outsourcing some or all of that is an appealing idea.

However, as a consumer-direct service, I don't think FindYourPolicy.com will get a lot of traction. The list price of $29.95 plus $3.95 per month is a lot for twice-yearly postcards (see note 1) to your beneficiaries. But the company is likely more interested in setting a high retail "value" on the service so they can wholesale it to financial institutions for pennies on the dollar.

Using the same concept for safe deposit boxes
While the beneficiary notification is an idea deserving of a second look, I was more intrigued with another of its features, safe deposit documentation and notification service. I just spent 30 minutes last Friday making a trip to the bank to look in my safe deposit to see if my son's social security card was there (note 2). Of course, it wasn't. I could have saved the trip if I'd had good records on its contents. I'm sure I wrote it down somewhere, but it would likely take much longer than 30 minutes to find it.

Ideas to help memory-challenged customers like myself:

• Simplest: It would be great if my bank had a simple email-like software app available near the safe-deposit area where I could list the contents of the box and then email the info to myself AND store a record of that communication within online banking so I could access it years from now when the email is long lost.
• Harder: In addition to manually entering info, have a scanner available so that I can scan copies of the documents in the safe deposit box for a digital record.
• Hardest: Extend the service to the home/office and allow me either to store items virtually, using my home/office scanner, or by uploading/emailing documents into the virtual safe-deposit box. This is the core idea behind vSafe from Wells Fargo.

However, as Tripp Johnson at Gonzobanker so eloquently laid out in this article, there are  serious questions regarding overall demand for virtual safe-deposit services, not to mention pesky compliance issues that cannot be ignored.  

FindYourPolicy.com homepage (29 May 2008; see note 3)

Note:

1. Why TWICE yearly? Once per year seems like plenty. Or how about one postcard and one email message each year? (Update 1 June: The reason for mailing 2x per year is that the U.S. Postal Service forwards mail only for six months, so with this frequency the company ensures it gets the forwarding address. (See comment #2 from Michael Hartmann of FindYourPolicy.com) 

2. My bank is requiring a faxed copy of my 18-year-old son's social security card in order to add him to my account. I'm all for good authentication (who isn't?), but that seems extreme. More on that in a future post. 

3. Sometime during the past 10 days, FindYourPolicy.com added the "member of American Bankers Association" seal. It's a reasonable touch, but it only means they've paid at least $1,250 for a service membership to the ABA.

It was online banking week in Walt Mossberg's popular Wall Street Journal technology columns. Yesterday in The Mossberg Solution, authored by 20-something Katherine Boehret and edited by Mossberg, Mint's personal finance service received a half-page article so complimentary I had to look twice to make sure it wasn't an advertisement. Boehret couldn't find a single thing wrong with the service, although she did wish for bill payment capability so she could do all her banking with Mint. I'm sure she'll have her wish granted relatively soon.

In today's Personal Technology column entitled, How to Avoid Cons that Can Lead to Identify Theft, Mossberg himself dropped a bomb which will impact bank-marketing efforts for years to come. His first of seven tips for safe computing:

Never, ever click on a link embedded in an email (from your) financial institution....

That's harsh, but it's also understandable why he'd take that stand. Mossberg strives to make technology issues understandable to non-techie readers. However, it would have been better to add, "unless your bank adds account-specific personalization to the messages so you know for sure where they originated." 

Action items
Many financial institutions, including Citibank and Bank of America, have long used personalization to distinguish legitimate messages from phishing attempts. Financial institutions with good personalized messaging should consider a public outreach program to counter the negative perception from the Mossberg column. It also might be a good time to remind front-line employees how to respond to customer concerns about phishing emails.

For more information, see our Online Banking Report on Marketing Security. 

Last week, I may have jumped the gun when I thought I'd found a bank using Twitter (post here). It's pretty apparent that E*Trade is not officially involved with that Twitter account.

But the ever diligent Ann-Marie Murphy was quick to add to the comments that her company, Quicken Loans, is *really* using Twitter to support its Quizzle personal finance site (see Quizzle coverage here). Beginning Feb. 22, the mortgage lender has posted 52 updates through last week (those would be called "tweets" if you are a real geek). That's about one per day, a good steady flow, without inundating the follower. 

Here's Murphy's rationale for using Twitter:

We've found it to be a great way to chat with our site visitors, get honest and helpful feedback to make the site better and give interesting home-related tips to followers. I especially like the instantaneous feedback. Ask a question, get a bunch of answers from folks who enjoy helping others.

Now this is what a real Twitter update stream looks like, complete with custom design. Nice.

I was searching Twitter today to see if any major brokerages were using it to reach out to customers. The only hit was E*Trade which is using Twitter to update its Complete Savings Account rates. It seems to be coming from the bank, but it's possible someone else, perhaps an employee or fan, is responsible for the two entries: the first on March 12 announcing a 3.45% yield and then on April 1 when the rate dropped to 3.01% (note 1).

Regardless of who's responsible, it makes sense to use the new channel for outbound communications. If nothing else, the 90 seconds spent creating those two entries have already generated a favorable mention in this blog. 

For those of you not familiar with Twitter, it's a communications tool that allows users to post short (140 characters max) updates about what they are doing, what they are thinking, or anything else. Unless the user chooses to make their updates private, anyone can read them, just like a blog post. That's why Twittering is sometimes called micro-blogging. But it's more like "broadcast instant messaging" for most people who's musing will be seen by just a handful of friends, family and/or colleagues.

For more info from an actual Twitter user, read Ron Shevlin's recent post.

Note:

1. I suspect it's an "unofficial" Twitter page because they didn't put APY behind the percentage, although that is spelled out in the short bio section in the upper right, and they are not using the company logo.

Today I received my first alert (see screenshot below) since subscribing to Experian's credit-monitoring service about 4 weeks ago. While I appreciate the heads up, the user experience is not at all what I want.

Here are the problems: 

1. Cries wolf. All the alert tells me is that there was a "key change" posted to my file. Is it a routine credit inquiry (which I was expecting) or did someone just open an account at Best Buy in my name? The only way to find out is to log in to my FreeCreditReport account, which took three minutes since I couldn't remember the username/password. Please provide more info in the alert so I can better gauge the severity of the situation.

2. Not phish proof: While Experian does use my first and last name in the salutation, thereby improving believability, additional personalization is needed to help users know it's genuine, especially when the company's log-in process requires input of a social security number confirmation after login. 

3. Not enough trust: I've worked with Experian for more than a decade so I know and trust them. However, the average Joe/Jo doesn't really know whether FreeCreditReport is a trustworthy company or not. Credit monitoring alerts are too easy to miss if they don't come from a recognizable and trusted name. It would be much better if they came from the user's financial institution or card issuer, someone with whom they do business on a monthly basis, so the emails don't end up in some spam filter.

4. Not integrated with online banking: I really don't want to remember yet another username and password, nor do I want to spend five minutes of my day logging into another website to verify there are no criminals using my credit files. Credit monitoring and credit scores should be integrated into online banking so I can keep track while doing my normal banking.

5. Doesn't tell me what to do: In this particular case, I knew about the inquiry, but what if I didn't recognize it. The website doesn't provide any info on what to do if I did not authorize the inquiry, which could be the first sign of serious identity takeover (see screenshot below).

For more information, see our recent Online Banking Report on Credit Monitoring Services here.

Email alert from Experian's FreeCreditReport service (24 Oct. 2007)

I received an email from American Express late last night after resetting my password earlier in the day (see screenshot below). I can never remember my AmEx password, because I can't use my usual one due to the company's surprisingly short field of just 8 characters that also doesn't support special characters. I have it written down somewhere, but I can never find that either.

I went online late Friday afternoon to pay my overdue bill at AmericanExpress.com. I was pretty sure it was one of three possibilities, but after two unsuccessful attempts, and with the website warning me the third attempt would cause a lockout (note 1), I decided to go through the online reset process instead. 

That was easy. I just needed the card number, the code on the front of the card, and the answer to a security question. At that point, AmEx displayed my username and let me reset the password. It's one of the easier reset processes I've tested. That's a benefit to customers and helps cut customer service costs for AmEx. 

But the thing I liked most was the email message sent later that night informing me of the password reset (screenshot below). But I don't understand why it was sent more than six hours later. Why not send it right away? That would be way more impressive to customers, and would help reduce any potential fraud or privacy violations. Better yet, send a text message right to the customer's mobile, so they have real-time knowledge of the account changes.

Email Critique
Personalization: The company uses two pieces of personalization, cardmember name and the last five digits of the account number, to differentiate this message from the average phish. Excellent.  

Subject line: Your American Express Forgotten User ID is good and right to the point

From: "American Express" using an American Express email address. Good.  

Headline: Verify Your Account Transaction is a little confusing. All I did was reset my password. I'm not sure that average person views that as a "transaction."

Copy: The copy is short and to the point, but it could use a little editing for clarity. The third sentence, "If you did contact us...." seems unnecessary. And "If you did not complete the retrieval...." is not very user friendly language.

Design & Layout: Excellent.

Overall Grade: A- for the message, B- for timeliness

Note:

1. We recommend allowing more than three attempts before lockout. It's pretty easy to forget a digit or make a typing mistake. See our Online Banking Report on Security (#119) for more information.  

This week, I took a two-day break from writing the next issue of Online Banking Report, an update to our popular report on Credit Bureau Monitoring and Identity Fraud Protection (2002 report here), to attend the Mobile Commerce Summit. 

Much to my surprise, an email received today nicely integrates those two topics. The offer sent was sent with the subject, "Mobile Identity Theft Protection," and it came from WireFly an online wireless reseller where I'd previously purchased a Blackberry.   

Very interested to see the mobile connection, I looked at the full message (below), a well-crafted offer for Identity Guard services from Intersections. The seemingly to-good-to-be-true offer: a full year of credit monitoring, with SMS alerts, free of charge.

Apparently, Intersections, like PayPal and SunTrust, is using free credit report monitoring as an introduction to its full-service credit report and ID theft protection services. It's an aggressive move that has repercussions for the industry. We'll look at its strategy in detail in the new report to be published in July.

I've been an Expedia regular for 10 years, so I only check Orbitz on occasion. But I was there today and was impressed with what they are doing in mobile alerts. You'll have to read the next Online Banking Report for all the details (note 1), but I wanted to pass on one idea that could be used by banks and credit unions today.

I call it an alert ticker. What it does it track the number of OrbitzTLC alerts sent to customers (see it in action here). The odometer-like counter rolls over about once per second and currently reads 87,794,309 (see inset). ING Direct has done the same thing for many years with the total interest earned by its savings customers. 

Below the ticker is another feature that financial institutions supporting voice-mail alerts should consider, a quick trial entry form. Users can type in any phone number, landline or mobile, to receive a sample voice message alert (note 2). Those entering a mobile number can also receive a sample text message by checking the lower box (note 3).

Notes:

1. Online Banking Report #140 will be available in early April.

2. They didn't ask for mobile phone carrier, so Orbitz must send a message to all the major carriers, e.g., yourphone#@cingular.com, yourphone#@verizon.net, and so on figuring the right one will get through eventually.

3. It's been three hours and I've received neither a voice message or text message. 

4. Banks should also take a page from Southwest Airline's Ding service (see coverage here and here).

There is no doubt consumers love debit cards. Despite cloudier fraud protections, no free float, and the confusion of "signature vs. PIN," growth continues at a 20% annual clip, with total U.S. transactions surpassing credit 15 to 18 months ago (see numbers here).

But continued negative press coverage could slow the growth. For instance, today's lead article in the Wall Street Journal's Personal Journal section, How to Protect Your Plastic, focused on recent debit card skimming incidents. 

What can a financial institution do to counteract the negative press?

1. Educate customers on their limited liability

2. Provide clear and understandable zero-liability fraud protection guarantees

3. Provide tools for monitoring checking accounts, such as transaction and security alerts

But once you have those "best practices" in place, you can still boost usage, and differentiate your debit card and checking accounts by integrating actionable text-message alerts (see ClairMail example above). 

While the industry-standard email alerts are helpful, the phishing epidemic, spam filling up the in-box, and  the time lag for reading and responding to bank emails, make them less and less effective for time-sensitive communications such as fraud alerts.

Enter the mobile phone. Most banking customers now keep a mobile device with "three rings" of their person much of the day, and almost always when out of the house. Therefore, a real-time text message each and every time a debit cards is used, will go a long way towards making users comfortable that their card has not been comprised. And in the event their is a fraudulent transaction, a quick text message back to the issuer can lock the debit card down, avoiding any additional unauthorized transactions.

This is about as win-win as you can get in banking. The user is happier with his debit card leading to increased loyalty and more debit transactions, boosting both short- and long-term revenues for the bank, credit union, or card issuer.

For more information see our latest Online Banking Report, Mobile Banking & Payments 2.0 (OBR 138/139).

Once again (previous post here), Chase used a three-quarter page color ad in the front section of the New York Times (p. 17, National Edition) to showcase its alert services (see partial screenshot right). The ad shows a man relaxing in the stands at some type of sporting event, Yankee Stadium perhaps.

The camera looks over his shoulder, focusing in on the image displayed on his Treo smartphone, which says "SECURITY ALERT" in large white letters on a light-blue background.

You had to feel for this poor guy, jarred from his leisure time with an urgent missive from the bank. Within a few seconds, three things likely crossed his mind: 

1. What the (expletive deleted)? Pretty poor timing to be interrupted at a baseball game with a security alert from the bank (which, these days is 99.9% likely to be a false positive, or a phishing attempt, see number 2).

2. Is this even from Chase? How do I know it's not a new kind of mobile phishing attach (mishing?). Should I ignore it? Does my liability go up if I don't respond immediately?

3. Now what? Can I click the message and find out if this was just a notification that I'd used my debit card to buy beer at a Yankees game, something I'd never done before, or has someone just transferred my 401k to a numbered account in the Jersey Islands? Or will I have to excuse myself and make a voice call, spending the 6th and even part of the 7th inning, talking to a Chase CSR, who may not even have enough info to explain why I got the alert? 

Analysis 
The ad demonstrates the pitfalls of using a very negative attribute, security breaches, in marketing your brand. But despite the uncomfortable thoughts that come to mind, we think it's an effective ad because it grabs attention and positions Chase as caring for the financial security of its customers. However, given that Chase's actual alerts look nothing like this, it's a bit of a stretch. I suppose they're allowed a bit of creative license; it's advertising after all. 

We'll give it an A-

In an American Banker article today (here), Wachovia says it is developing security controls that will put users in charge of some of their own security settings such as the size of a funds transfer allowed. According to John Watkins, Wachovia's Director of Online Services, the new capabilities will be available "sometime this year."

This is not a new concept. The first full-service online-only bank in the world, Security First Network Bank, offered user-set bill payment limits more than ten years ago. Other international banks, such as ABSA Bank in South Africa, have long allowed users some control over security matters.

However, in the United States user-controlled security has been slow to catch on, other than via triggered email alerts, which remain the first line of defense. For several months, Bank of America has been reminding online banking users that alerts can help them prevent fraud in their accounts. 

While it's too early to speculate on what Wachovia will or won't do, the concept is a good one, and will eventually be used to some extent by all financial institutions. It's a win-win, providing users a better sense of control while reducing actual fraud losses within the bank.  

For more information:

See Online Banking Report #119, "Marketing Security" for more ideas on how to turn security concerns into a marketing advantage.

How do you convince already-registered users to sign up for your latest email newsletter? One way is to offer an incentive. Earlier this week, the Seattle Supersonics offered users the chance to win a $500 shopping spree if they logged into their account and opted-in for the latest email newsletter.

An even more effective method was demonstrated by the New York Times today in the online version of its Business Section. In the upper-right corner, the user's existing email address is shown, along with a sign-up button (see screenshot below). All it takes is a single click to begin receiving the daily DealBook email.

The newspaper also provides a link to view a sample of the newsletter, a proven strategy for increasing response, and links to its Privacy Policy and back to account preferences to change the email address.

Once users click on the sign-up button, the text is changed to a thank-you message along with a link to change email preferences (see inset above).

Startup Pinger <pinger.com> launched a service last month that makes it easy to send voice messages to mobile phones or computers along with an email or SMS alert.

It combines the immediacy of instant messaging, the functionality of email, and the more personal nature of a voice message. And it's free.

To use the service, which is currently in public beta, users upload recipient email addresses to the Pinger server where communication preferences are stored. Voice messages are created using any phone or a PC microphone.

The San Jose, CA-based firm received $3 million in funding from A-list VC Kleiner Perkins in Nov. 2005.

How it Works
To send a message from a phone, you simply call the service, say the name of the recipient, record the message, and hang up.

To send a message from a PC, you select the recipient from your address book, record the message on your PC microphone, and send. 

Either way, the recipient is notified via SMS and/or email. If on a mobile phone, they dial the number in the SMS message and listen. If at a PC, they can click on the link and listen to the message on their PC speakers.

The recipient can sort, replay, forward, store, and even reply via voice to the messages, which makes them as functional as email.

Pinger demonstrated the service last week at Demo's fall conference (see the demo here).

Financial institution opportunities
With believability of financial emails at an all-time low, short voice messages could be more effective for complex information, such as explaining options to someone late with a loan payment, or who has just been given a credit line increase.

And since many banks have stopped using links in their emails due to phishing concerns, voice messages could be used to say, "See us on the Web at www.yourbank.com/loans" or "Log in to your account and go to the Your Loans tab."

The novelty of the voice message will also provide a boost to marketing efforts, at least temporarily. The first few messages are likely to generate quite a bit of interest, until users learn to ignore them like other marketing messages.

Voice messaging isn't for everything. Routine information, such as balance alerts and deposit confirmation, should continue to be sent via text only.   

It's yet to be seen whether Pinger takes off. But it's a safe bet that something similar will soon enter the lexicon along with Googling, IMing, and texting. With dozens of voice-over-Internet-protocol (VOIP) startups challenging the bigger players, such as Vonage and eBay's Skype, we are sure to see interesting, cost-effective new ways to reach customers.

For more information:

• TechCrunch article on new VOIP providers here
• Coverage at Under the Radar blog here
• Short article in New York Times Sep. 27 here

Hoping to download a movie to watch on the long Seattle-NYC flight, I sent Amazon an email with a question about its new Unbox video service. Not only did they answer within the hour, they also included a link to indicate whether the answer solved my question or not. 

Choosing the "yes" option, I was delivered to a "Thanks for your feedback!" message, which not coincidently put me back onto the Amazon site. The thank-you also contained a link to provide additional feedback.

Following that link leads you to a page to provide detailed comments:

If you responded "no" to the original question, you are taken to a similar page to rephrase the question (see below).

Analysis
This simple feedback mechanism provides five important benefits:

1. Demonstrates you actually care whether the user's problem is resolved satisfactorily
2. Allows customer to easily submit another question if not satisfactorily resolved
3. Allows you to quantify the performance of the service department
4. Identifies areas where better answers are needed
5. Helps identify tricky problems that can be corrected

All financial institutions should consider similar techniques for improving electronic customer service.

Now, if only the Amazon video-download service were as efficient as its service reps. First, it took two tries to get the player downloaded. Then the 90-minute, 1.7 GB movie took nearly eight hours to download via my Wi-Fi connection to our Comcast cable modem, never going much faster than 80k per second. Bottom line: For $2.99, it's still worth doing, provided you plan far enough in advance.

Friday, US Bank <usbank.com> began using a new design for its email alerts. It has a softer, more modern look to it (see before and after screenshots below). The layout and copy are identical to the previous version.

The new look arrived about the time we intended to post a rant about the lack of creativity in bank messaging. One of our examples was US Bank, which had sent us the same basic confirmation message more than 1,000 times over the past three years.

While it's good to see an improved design, it's still pertinent to note that there is more to the lack-of-creativity argument than just the font and background colors. The problem with email alerts is that after receiving them two or three times per week for several years, many users may ignore them. To keep that from happening, financial institutions need to upgrade their messaging system; let's call it Alerts 2.0.

Here are some important features of Alerts 2.0 (for a detailed look at bank messaging, see Online Banking Report #91/92) :

• Educate about preference changes: Once or twice per year, perhaps more frequently for those receiving a large number of alerts, remind customers about the types of alerts available and how to change them.
• Provide periodic summaries: Someone getting six alerts each week would likely appreciate a weekly summary of all changes.
• Change the "look & feel" periodically: Don't wait three years to change the design. Create a template so that the alert design can easily be changed to fit the season or holiday.
• Gently cross-sell: Alerts should be kept primarily factual. But every once in a while, most of your customers would appreciate a low-key "reminder" of relevant services, such as overdraft protection, credit report monitoring, and so on.
• Give thanks: As trite as it sounds, don't forget to thank the customer, at least every once in a while. For example, you might add a thank-you when receiving a large deposit (or ANY deposit for that matter). Also, a periodic "thanks for participating in online banking" and/or email alerts would be appropriate. This would also be a good time to ask for feedback on the service.

US Bank email alerts redesign (click on images to enlarge):
New  Old

--JB

While most banks in the world charge fees for at least some aspect of online banking, the service has been almost entirely fee free in the United States, at least ever since Bank of America rolled out free bill payment in 2002.

At first glance, it seems like a great deal for consumers; however, the lack of direct revenue has hampered investment in the channel and deprived U.S. customers from the more sophisticated services common throughout the world, such as SMS alerts, multi-factor log-in controls, and so on.

We're always on the lookout for fee-based opportunities (see Online Banking Report 122/123 for a laundry list of online fee opportunities), and we are encouraged by eBay's latest innovation, SMS auction alerts with a fee of $0.25 per auction. This is the first time eBay has attempted to charge fees to bidders. The site has offered free email alerts since the beginning.   

Here's how SMS alerts work (see screenshot below):

1. Select "Get SMS alert" (see red circle in screenshot at above, click to enlarge).
2. Select mobile phone provider from drop-down list and enter mobile phone number; currently Cingular, Verizon, Nextel, Alltel, Sprint, and TCRcom participate
3. Check "Watched item ending alert" or "Outbid alert"
4. Click "Continue" which initiates a confirmation message to the user's mobile phone
5. Send a text-message reply from the mobile back to eBay to agree to the charges

SMS-alert users pay $0.25 for each auction entitling them to up to 10 alerts. Each 10 thereafter cost another $0.25. It would be unusual for the number of alerts to exceed 10. After receiving an alert, users can submit a new bid via text message by responding to the text message with their new bid amount. Bidding can be protected with an optional PIN.

Instant messaging alerts work in a similar manner (click on screenshot for closeup):

1. Select "Get IM alert" 
2. Select IM provider; eBay supports the big three: Yahoo, AOL, MSN
3. Check "Watched item-ending alert" or "Outbid alert"

There are no fees for IM alerts. After receiving an IM alert, users can submit a new bid via the provided link.

In addition to SMS-alert links in the main auction listings, successful bidders are also prompted to set up an alert on the bidder's confirmation screen (see below).

What it means for financial institutions
There is no reason why banks cannot charge for triggered alerts. Unlike account access, alerts are a value-added service with no similar "free counterpart" in the offline world. You don't see telecom giants giving away any of their specialized services such as caller-id, custom ringing, call forwarding and so on. Banks should work on developing premium service bundles. For inspiration, take a look at your local phone provider's website (see Qwest screenshot right).

Resources:

• Online Banking Report #109, "Pricing Online Banking Services"
• Online Banking Report #122/123, "2006/2007 Planning Guide"

ING Direct <ingdirect.com> is the latest bank to move to greater personalization in order to distinguish its messages from phony phishing attempts. The bank has added the customer's first name and masked all but the last three digits of the customer's number (click on inset for a closer look).

The message at left was sent to customers to market ING's latest deposit promotion: 4.75 percent APR for new money.

The same technique is also used for routine account alerts (see inset right).

Note: The high-impact sales pitch for its 4.75 percent deposit promotion.

Analysis
While it doesn't prevent phishers from attempting to recreate the same look (see footnote), it's an effective first line of defense. Besides, the personalized greeting is a friendler way to communicate with customers. Citibank has been using a similar approach for more than a year (NetBanker, May 30, 2005).

Footnote: Yesterday, we received a fake email that recreated the Citibank personalized area in the upper-right corner. The crooks just left blank the Email Security Zone in the upper-right corner, figuring many users won't look that closely at the box (click on inset for a closer look).

--JB

Whenever online banking users make changes to their account preferences, you should confirm with an email. It not only shows you are paying attention, but also provides customers the peace of mind that they accomplished the intended task.

Today we changed one of our account alerts at Bank of America <bankamerica.com>. Within a few minutes, we received this attractive email (see inset). However, you can tell that this particular message was crafted in the pre-phishing days, as evidenced by the old 2004 copyright date (lower left corner), the old 2000-2004 Olympic sponsor logo in the lower right, and hyperlinks back to the log-in page.

Action Items

1. For better authenticity, include a personalized greeting, shared secret, or truncated account info in your message.
2. Do not include hyperlinks back to the bank on routine, non-personalized messages.
3. Update all messages at least annually so they don't carry outdated corporate branding and/or copyright dates.

--JB

The first widespread use of online features for overall corporate branding was the now-famous fall of 2002 Bank of America television advertising campaign touting it’s recently-set-free bill payment program. At the time the bank said that these advertisements were some of its most effective TV spots of all-time with recall percentages through the roof.

Three years later you see online features used in all sorts of media campaigns. Two print advertisements caught our eye this month.

1. Chase Bank ran a three-quarter page color ad in The New York Times on Oct. 9 focusing on its free email alerts using the following headline:
   
        The morning news.
        The morning weather.
        Maybe even your morning balance.
   
   The ad was mostly white space with a smaller picture of a 30-something guy lounging in his Adirondack chair on his deck in the woods with laptop and coffee (evidently enjoying a wireless connection).
   
   Our take: Good, but too subtle; unlikely to increase awareness of alerts to any great extent.
   -
2. Much more interesting, though unrelated to banking, was the full-pager from General Motors introducing its OnStar service running in the A-section of the Oct. 13 Wall Street Journal. The title read:
   
        Introducing
        OnStar Vehicle Diagnostics.
        A monthly email from your vehicle.
   
   The picture featured a woman peering at her laptop on the patio with her car in the background. On the laptop screen was a message, blown up in the lower part of the ad (click on inset for similar message), summarizing the mechanical condition of her 2006 Chevrolet Impala.
   
   Our take: Extremely well done, demonstrating an almost unbelievably valuable service that most wouldn't otherwise have known about; should increase awareness dramatically.

Analysis

You can only talk about great service and free checking so many times. Online features that help improve perceived security and/or financial control are becoming interesting to a wider cross-section of customers.

For example, Wells Fargo took an essentially plain feature, a combined online statement, and turned it into My Spending Report (see previous NetBanker article, Feb. 17, 2005), a point of differentiation for its online services, and by extension, the bank as a whole.

-

We don’t work at an ad agency, so we won’t begin to try to tell you how to cost justify large print ad in the local paper. But most financial institutions devote at least some of their advertising budget to so-called “image” spots and if you serve a tech-savvy market such as NYC, 2006 would be a good time to test online-oriented spots to see if they bump up your brand and ad recall numbers.

--JB

Now that consumers are beginning to receive multiple alerts and other email messages from their financial providers, you risk the problem of "alert fatigue." It happens with any warning system. If you get too many warnings or status messages, you start to ignore them, rendering the system ineffective.

One way to make your message standout is to add a "high importance" flag to your outgoing message. In Outlook and Outlook Express, a small red exclamation point will show on the subject line in the message list (click on the inset for a larger image). In this example, the Washington State Department of Revenue added the flag when it sent password-changed alert. But it didn't add the flag when sending a routine payment confirmation.

The key to making the flag effective is to not overuse it. Don't ever put it on an advertising or marketing message. And use great restraint when attaching it to balance or confirmation messages. It's best use, might be for security-related notices such as password resets and other sporadic and relatively unusual activity.

--JB

American Express, long one of the savviest financial marketers, recently updated the look of its routine "payment received" email confirmation.

It's a nice change from the typical text-only message. Key features include:
- last 5 digits of card number for verification
- account login
- balance transfer offer
- Blue Cash offer

But the "Dear Cardmember" salutation is a mistake.

With all the hysteria about phishing and email fraud, the opening should be personalized, both to differentiate itself from SPAM and to insulate cardmembers (and itself) from phishing attacks. This is especially important in a communication which includes a built-in login button, an inviting target for phishers.

American Express does provide several unique identifiers: the last 5 digits of the card number, the payment date, and payment amount. But those aren't instantly recognizable to all cardmembers. The combination of account name and the last few digits is much more effective (see Citibank article).

Grades
A  for look & feel
A- for cross sales (two offers might be a bit much)
A for self-service with five links to popular online card management functions
B- for security (last 5 digits included, but no cardholder name, no mention of how to verify the authenticity)
--------------------------
A- overall

--JB

If you'd like to learn more about the bank and financial services email trends, check out Email Marketing in Financial Services: Leveraging the Inbox from our sister publication, the Online Banking Report.

It's fitting that the financial company most targeted in phishing attacks, Citibank, would be the first to introduce a new email format that goes a long way towards helping users identify legitimate email messages.

The personalized emails (click on inset to enlarge) include not only the name of the recipient, but also the last 4 digits of the user's ATM card. While simple personalization with the customer name would help many users identify legitimate emails, it's far from fool-proof.

First, there's the relatively common practice of including first name and/or last names in email addresses. Also, some phishers are using direct marketing tactics and first running email addresses through various databases to append actual names and other info to the email record in order to develop a personalized pitch (see ZD-Net article).

Citibank's new email format was announced to customers through a short message on the top of the online banking screen in early May. It is also now mentioned in the bank's main FAQ page.

Analysis
This is a great first step in winning back the confidence of users. Eventually email standards will evolve so that the email client will be able to readily identify legitimate emails, but that could be years in the future.

If you are considering a similar approach, you might want to let users choose the name and identifying information that appears in the personalization box. In February, we reported on a UK security initiative that took that approach.

For more information:

• Previous NetBanker post on eBay's personalized email strategy
• Security & Privacy from Online Banking Report (#93/94)

-- JB

Editor's Note: Citibank received an OBR Best of the Web award for this and other security features in Online Banking Report #119, "Marketing Security."

One way around the rapidly declining effectiveness of email communications is to prominently post new messages within the secure online banking area. Not only is it useful to create an archive of bank communications, it also provides reassurance that no message(s) have been missed.

Ebay recently added this capability to its the My eBay platform, where users can login to track account activity. Ebay keeps messages for 60 days. Financial institutions should allow storage for far longer, one year at least.

Because bank messages are often time sensitive, you should also send the message, or a message notification to the user's standard email account. Better yet, allow users to receive message notifications at multiple email accounts, therefore increasing the chances that one will go through.

Action Item
Many banks already have this capability, but it may be overlooked by customers, as they have become accustomed to receiving messages over the Internet.

Now would be a good time to remind customers to look in their message folder periodically. You might run a sweepstakes or treasure hunt that requires looking into message folders to win.

If you'd like to learn more about the future of online bank messaging, check out the Online Banking & Bill Pay Forecast: Current, future and historical usage: 1994 to 2016 from our sister publication, The Online Banking Report.

Usually we discuss innovations, this is an exception. We'll call this a non-innovation, non-ovation for short.

In a time where all the huge Web-based email providers, led by Google's free 1 GB of storage, U.S. Bank decides to delete emails sitting in customer in-boxes (within their online banking platform) after just 30 days. This includes estatement notifications.

Assuming the average customer gets one message per month, and each message is 2k in length, that saves about 20k in storage costs per customer, compared to keeping the messages for one year. Assuming the marginal cost for disk space is $10 per GB, that policy change will save an awesome 2 one-hundredths of a cent per customer per year, or $200 per 1 million customers.

Extensive online archive space is one of the biggest benefits of banking online. Don't be pinch pennies on one of the lowest-cost aspects of your online Usually we discuss innovations, this is an exception. We'll call this a non-innovation, nonovation for short.

In a time where all the huge Web-based email providers, led by Google's free 1 GB of storage, U.S. Bank decides to delete emails sitting in customer in-boxes (within their online banking platform) after just 30 days. This includes estatement notifications.

Assuming the average customer gets one message per month, and each message is 2k in length, that saves about 20k in storage costs per customer. Assuming the marginal cost for disk space is $10 per GB, that policy change will save an awesome 2 one-hundredths of a cent per customer per year, or $2,000 per 1 million customers.

Extensive online archive space is one of the biggest benefits of banking online. Don't be pinch pennies on one of the lowest-cost aspects of your online presence.

-- JB

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The full text of the message is repeated below:
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Date: 09/14/04
To: Jim Bruene
From: U.S. Bank

Subject: Messages now refreshed after 30 days

In an effort to populate the message center with current information, all messages, including ones related to online statements, will be deleted after 30 days. However, online statements will continue to be available for up to 90 days and can be accessed in the Recent Statement area at the top and bottom of each account Transaction History page. Online statement customers will continue to receive a message in the Message Center when a new statement is available.

Salem Five (Salem, MA; $800 million) added a fax center to its Web. They offer product info, loan applications, and PR-type material such as a favorable write-up in American Banker. The fax-back feature is good for users without convenient access to a printer.