Intuit's TurboTax unit has long pushed the envelope in promoting its brand through social networks. Its Vanilla Ice YouTube promotion two years ago (previous post) is still one of my favorite financial user-generated-content (UGC) promotions.

But UGC promotions take a lot of planning and support, and unless they go viral, they may generate just a few thousand views and little new business (see note 1).

Intuit's use of a real-time (note 2) Twitter feed in a banner ad (see at VentureBeat, screenshot below) is so much better than a YouTube promo in a number of ways:

• Much more cost effective: It costs Intuit virtually nothing to post its Twitter stream to VentureBeat (other than the advertising expense). Intuit is already broadcasting on its Twitter channel for other reasons. This is just a repositioning of that content.
• When Intuit answers a question within its stream (@ replies), it creates moderated "user-generated micro-content." The newness of the content creates more interest and attention than a static banner ad.
• The company jumps on the Twitter-bandwagon, a good way to generate press mentions.

Bottom line: This approach works only if you are creating an interesting stream of Tweets. TurboTax, during the early-April tax return mania, is a great example. Other financial companies can mimic the approach, and you'll probably want to run a contest or do something innovative to keep your Tweets lively. 

VentureBeat home page (9 April 2009)

Landing page at Intuit's TurboTax Twitter page @turbotax
(link, 9 April 2009)

Notes:
1. But if you have a huge budget, the payoff can be great. According to Jeffry Pilcher's Financial Brand post today, Barclaycard's Waterslide promo, referenced on the UK homepage, generated more than a million views on YouTube. Barclay's TV ad is here, the YouTube page is here and the Web-based game, here.

2. It's a "speeded-up" real-time feed. The banner ad cycles through the five most-recent Tweets (all of which were posted yesterday). Each one is on-screen for several seconds, making it look like there is much activity. 

Yesterday, I looked at a list of free services likely to come under pressure as banks work on the Herculean task of returning to normal profitability. One area that's likely to remain free for the foreseeable future is online and mobile banking, at least the core account-access portion of it.

But we continue to believe that financial institutions are missing a revenue opportunity to provide premium fee-based services to certain segments.

If American Express can command $2500 per year for its black Centurion Card and Barclays $495 per year (see note 1) for its slightly more pedestrian Black Card launched in December (see note 2), why can't banks get $10/mo for a similar premium version of online and mobile banking? The short answer: They haven't tried.

Just for the sake of discussion, here's a "gold online banking" service for which I'd pay $15 per month without a moment's hesitation:

• High-end website and iPhone app
• Long-term (7+ years) online storage of images, transactions, statements
• On-demand credit score like Credit Karma 
• Credit bureau alerts when negative items hit
• Account aggregation with weekly summaries like Mint
• Email customer service with 30-minute or less turnaround time
• VIP phone and tech support with no phone tree
• No overdraft/NSF charges (within limits of course)
• Travel rewards/sweepstakes on electronic transactions
• Pre-filled one-click credit application
• Extra security options
• SMS balance inquiry
• Iron-clad, no-fine-print security guarantee with 100% immediate reimbursement and emergency credit line

For more elaboration on these benefits, see our Online Banking Report on Pricing Online Services.

Visa Black Card homepage (15 Feb. 2009)
Includes one-page online application

Note:
1. The benefits of the Visa Black Card are similar to those from many gold/platinum cards. One of the biggest differentiators is free limited membership to Priority Pass which gets cardholders into 500 airport lounges in 250 cities. However, according to the FAQs, Black Card holders are limited to two complimentary visits per year, so this would cost $154 annually if purchased directly from Priority Pass. In fact, for $349 annually, you could get unlimited access to airport lounges. 
2. The Visa Black Card has been advertised with full-page ads in the New York Times, the latest on 10 Feb. 2009 on p. A5 (national edition).

Innovators in small business online delivery

Today much has changed. Everywhere you look, banks are innovating to serve the small business market more effectively. According to Watchfire’s GomezPro unit the best small business banking sites are Bank of America and National City, tied for first place in its year-end 2003 scorecard (see Table 55, right). 

Other online innovators in the small business market:

•          Barclays Bank (London; $800 billion) uses its website to target startup businesses with a broad array of support services that many startups would find essential, including a free business checking account for the first year. It’s so impressive, we’ve given it our second Best of the Web award this year
  (see next page).
•          PNC Bank (Pittsburgh, PA; $70 billion) and NetBank have both announced plans to offer remote check deposits, something most U.S. banks will support within a few years. One of the last reasons to visit the branch will be eliminated when clients can feed paper checks into a scanner instantly depositing the cash into their account and storing the image into their online banking archive
  This service is a shoo-in for an OBR Best of the Web once it goes live.
•          NetBank (Alpharetta, GA; $4.1 billion) which launched a new small business initiative a year ago, has attracted 1,600 businesses with $38 million in deposits ($24,000 average deposit). If it keeps to the announced third-quarter launch, NetBank may be the first bank to offer remote paper check scanning

Barclays provides valuable services for startups

Why do the U.K. banks do a better job serving small businesses online compared to their U.S. counterparts?¹ Perhaps U.S. banks are underestimating the value of services targeted directly to small business owners. Or maybe they’ve found it too difficult because business owners won’t bother switching bank accounts to save a few bucks a month. That’s why it makes so much sense for Barclays Bank to focus on startups at its business website <business.barclays.co.uk>. After all, if you succeed in being a startup’s first bank, you have the inside track to retain its business over time.

Barclays business homepage (see below) is dominated by a shaded area asking the important question, Starting a business? Even though the vast majority of visitors already have a business and a banking relationship with Barclays, those most likely shopping for services are startups. The bank also offers Pain relief in a box, a proprietary business management and accounting program targeted for tiny businesses or startups that haven’t settled on an accounting software system.

¹Two out of three of our Best of Web winners for small businesses are headquartered in the U.K.

Barclays’ small business Starter Accounts consist of the following features and benefits:

•          Current account (checking) with an overdraft facility; free for the first 12 months, 18 if you also maintain personal accounts at Barclays
•          Savings account
•          Loans, subject to credit approval of course
•          Insurance
•          45-minute free consultation with a business/marketing consultant
•          45-minute free consultation with an accountant
•          30-minute free consultation with an attorney

NetBank and PNC to offer remote deposits

According to recent press reports, both NetBank (American Banker, May 20) with 1,600 small business clients and PNC Bank (Wall Street Journal, June 8) with 200,000, will launch remote deposit service for their business customers. Although details of the yet-to-be-launched services are sketchy, it is expected that business customers will be able to scan paper checks into a remote device that transmits images to the bank for immediate deposit. PNC estimates the scanners will rent for $15 to $25 per month. No word on pricing from NetBank. The NetBank service is expected in late third quarter and PNC expects to roll-out by yearend. Alogent http://www.alogent.com/  is the technology provider for NetBank.

Benefits for small business owners:

1.   Saves time/money: Frees business owners from the daily/weekly trek to the branch, something 80% of online self-employed households reported doing during the past 30 days according to Javelin Strategy

2.   Improves cash flow: Checks can be deposited immediately rather than collecting dust waiting for the owner’s next trip to the branch

3.   Streamlines record keeping:

i.    the original check can be filed as a paper receipt if desired

ii.   a back-up electronic image is stored at the bank if questions arrive

4.   Improves customer service: Check images can be quickly retrieved and emailed if
a dispute arises

5.   Saves storage space/cost: Paper checks can be destroyed much sooner, eliminating storage and security issues

6.   Improves management control: Owners can spot-check deposit activity by looking at actual check images, rather than staff-entered accounting entries

Speaking as both as a small business owner and an industry analyst, this is a great service and a strong candidate for a Best of the Web award once it becomes operational.

Q. When is a business most likely to open a new bank account?
A. When they are first starting out.

Recognizing that the best time to get their foot in the door at a business is before the doors even open, Barclays Bank (UK), addresses the issue front and center on its small business banking home page Barclays Small Business Banking : Small Business.

The company offers a number of startup service including complimentary consultations with business advisors and fee-free checking accounts (18 months if you also bank personally at Barclays, 12 months otherwise).

Far more involved than the other ideas, statement consolidation involves strategic partnerships, systems integration with other companies, moderate-to-heavy programming, and extensive user education. But the payoffs are much higher as well, potentially offering a long-term source of service differentiation.

Barclays (London, UK; $325 billion USD) is the first bank we’ve seen use this approach. Six merchants in its BarclaySquare online shopping area participate in the SmartStatement program which combines purchases made at all participating merchants onto one convenient online record of past purchases, status of pending orders, and account informatioin.

Barclays is pioneering integrated online statements at its UK Web site www.barclaysquare.co.uk

Barclay’s effort is just the tip of the iceberg. Financial institutions could create a statement consolidation “engine” that integrates all types of non-financial statements with bank and credit card account info. For example, a user checking on a bank balance could also click on a utility statement or frequent flyer mileage statement. Below are some of the statements that could be integrated into a personalized statement area running on your server, e.g. <mystatements.yourbank.com>:

The logistics of a fully electronic integrated statement is beyond the scope of this Report, but you could start with something simple and local. Using the Quicken approach, users could do their own data entry on your Web site. ð

For example, frequent fliers would enter their account balances manually each month. You could make the task simpler by prompting users for input each month through Web-based and/or email-based reminders. Emails could have a hyperlink to the Web-based input form, or the email could serve as the input form allowing users to update their database by replying back to the email with new numbers.

Of course, any program requiring users to enter data month after month will have limited appeal. Many of the users wishing to track matters so closely are already doing so with Quicken or a spreadsheet.

The more exciting possibilities are hosting statements published on the Internet. For the large national merchants, you will probably need to wait for the solutions being rolled out late this year by MSFDC, Checkfree, Princeton Telecom and others. But statements from smaller billers in your market could be published on your Web.

For example, your business clients may have an account at a local printer. The printer might be interested in publishing billing statements on your Web provided it fit within the parameters of their existing billing procedures and it promised faster payments. For larger billers, you could work with an Internet billing solutions provider to develop a data feed directly from the biller’s accounting software or print stream to your Web.

Smaller merchants could simply input the billing data directly into a password-protected form running on your Web. The printer’s bookkeeper would log in and update customer records with the amount due, transaction detail, etc. Upon hitting “Send Bill,” the bill summary would automatically be loaded and archived on your Web, and an email or fax would be sent to the biller’s client inviting them to your Web to make payment. Billers could even send second notices by logging into your Web, accessing the unpaid bill, and clicking “Send Second Notice.”

We see real benefits to statement hosting, especially for community banks and credit unions:

•  Simplifies billing and collection for small companies.
•  Provides an opportunity for you to be the first in your market to offer “bill presentment.”
•  Adds value to your home banking services.

Several banks have created online malls including First Union, www.firstunion.com Wells Fargo www.wellsfargo.com Norwest www.norwest.com and Barclays in the UK www.barclaysquare.co.uk Online malls in general, and especially those run by banks, have been a bust. There just hasn’t been enough value-added to hook users or merchants on the malls. Barclays may be the exception with a consolidated shopping statement, security checkpoints, and BarclayCoin payment options, though only six merchants are currently participating in the full program.

But perhaps these efforts by superregional banks haven’t focused on the right thing — local targeted info. We think a well written, guided-link shopping area, kept localized and up-to-date, could be a valuable and well-frequented community resource. This would be an ideal project for a summer intern or Webmaster-in-Residence. Finally, don’t call it a mall, make it sound more useful and less commercial as in Community Shopping Resources.

Warning: Be careful not to push online stores at the expense of local competitors. For example, if you link to Amazon.com, you should provide equal time for local booksellers, even going so far as to provide tools to help them compete online.

Barclays (London, United Kingdom; US$254 billion) opened its PC banking service to the general public following a year-long pilot involving 4,500 customers. Barclays will offer PC Banking via Microsoft Money 97, the first UK bank to do so, and a stand-alone dial-up service. A Web-based program is in the works for later this year. PC banking via Microsoft Money costs UKP29.99 for the software plus UKP25 for the first year’s subscription. Subsequent years will cost UKP15 per year. The dial-up service will cost UKP30 for the first year then UKP15/year.

Contact: Richard Reay-Smith is Managing Director Personal Banking, Daryl Booth is Head of Delivery Channel Development, +44.203.532.152.