NetBanker

Launches: Kwedit Allows Gamers to Pay for Virtual Goods with Real Credit

2010-02-05T02:24:44Z

From a financial innovations standpoint, 2010 is off to a great start. Just 35 days into the year and we've already had two launches of services I don't think anyone saw coming: Blippy to automatically stream your purchases to the world (previous post) and now Kwedit (say it out loud if you don't get it).

Kwedit is designed to be the payments engine for the massive virtual goods market, estimated to be $1.6 billion in 2010 according to InsideVirtualGoods.com, up from $1 billion in 2009 (cited by GamesBeat last week).

Many of the gaming networks, especially the so-called "social gaming" startups such as Zynga's FarmVille, appeal to teenagers and younger kids (note 1) who don't have credit or debit cards available to pay for virtual goods. This has made it difficult for the publishers to monetize the games through direct payments.

How it works:

1. Users of games partnering with Kwedit can purchase in-game virtual goods by promising to pay later through their associated Kwedit account. See the screenshot below to see how Kwedit is positioned in the online game FooPets.

2. Later, users print out a bar-coded coupon from their Kwedit account (see inset right) and take it to a participating 7-11 convenience store and pay via cash, mail payment directly to Kwedit, or "pass the duck" and send the IOU direct to their parents for payment. The site also offers an option to pay directly via credit or debit card.

3. To help drive off deadbeats, the company has created a Kwedit Score that shows which users are paying their IOUs on time (inset left). At FooPets, users will get more virtual goodies as their Kwedit Score increases, creating a game within the game and a way to promote responsible spending.

Analysis
I'm not a gamer myself, but as a parent, I understand the pull of online games and look forward to the day when I don't have to hand over my credit card for use on some site I barely understand. Some will argue that Kwedit needlessly encourages credit use in the pre-teen set (note 1). But as long as parents stay involved, Kwedit can actually be used to teach kids the importance of paying their bills.

So, if users take this option seriously, by paying down their virtual debt with real money, Kwedit could be huge (in which case, PayPal buys it of course). And it's relatively low risk for the gaming companies because the virtual goods have a zero marginal cost. BillMyParents is another company we've covered in the teen-payments space.

There is no doubt in my mind that online gaming needs a better payment system and that the solution is unlikely to resemble anything us parents have ever seen or imagined. Kwedit fits that bill.

Kwedit gets star billing on the main screen at FooPets (4 Feb 2010)

Users create a promise to pay using a popup screen served by Kwedit (link)
Note: Users first must log in to their Kwedit account from this popup

Notes:
1. Kwedit users must be 13 or older to sign up for an account.

Out of the Inbox: Citibank Offers to Help Users Restart their Online Banking

2010-02-04T00:15:25Z

My Citibank checking account dates back to when iPods were novel and 1GB was enough to satisfy your iTunes cravings (see Jan. 2005 post). For several years, Citibank gave iPods away to anyone who'd open up a checking account online and do a few bill payments.

I haven't accessed my Citi checking account in at least a year, because last time I tried, I locked myself out with too many password attempts (note 1). And I've been too lazy to go through the often tedious reset process (see below).

So I was pleased to receive an email this morning offering to help me get restarted (see screenshot below). I figured the bank had noted my previously futile attempts to login and was sending along a bit of digital assistance. Sure, it was a year or two after the fact, but I believe in better late than never.

But the main call to action in the activation email is:

Enter the User ID and Password you created when you opened your account online.

So evidently, the bank thinks I'm smarter than I really am and actually can remember the username/password from my two-years dormant account.

Had I not been blogging about the email, I would have deleted it. But as I re-read it more closely, I did see the small light-gray link in the corner for resetting my password. Unfortunately, Citi requires your ATM card and PIN to reset passwords (see second screenshot). This is precisely why I wasn't able to reset the thing when I was locked out two years ago.

My take:
1. An activation to stalled online banking customers is a great idea. But in this case, Citibank did not deliver on its promise to "help" me restart online banking (note 2). As a matter of fact, I am now even more frustrated. If you are going to send a message offering help, make sure there is actual help available for the various ways customers will respond.
2. For infrequent users, consider simpler password-reset procedures based on email address or mobile phone number on file plus Social Security Number and/or shared secrets.
3. Finally, don't offer a dead-end password reset page. In Citibank's case, if the user doesn't have both their ATM card number and PIN, there is no place to turn. There's not even a phone number listed on the page to seek live help (you have to use Contact Us in the upper right).

Citibank email (sent 3 Feb. 2010, 9:30 AM Pacific)

Citibank password-reset page

Note:
1. I have two Citi accounts with different usernames and passwords, so it always makes for an interesting memory test at login.
2. I should add that I have enough money in the non-interest account to provide Citi with a bit of profit every year.

Thanks to Yodlee, a long-term NetBanker.com sponsor

2010-02-03T21:33:12Z

Happy February! We hope your 2010 is off to a strong start.

As we ramp up our blogging for the new year, we wanted to take a moment to thank Yodlee for their continued support of NetBanker. They sponsored the blog for several months in 2009 and recently made a long-term commitment to support it in 2010.

Yodlee is, in their own words, a "provider of online and mobile personal financial management (PFM) and payments solutions". They're one of the leaders in the space with "more than 100 leading financial institutions and portals today offer Yodlee-powered solutions to millions of customers worldwide."

On February 9th (next Tuesday), Yodlee is offering a free webinar on their AccountVerification tools and how they can help financial institutions increase deposits and decrease abandonment. Register now if you're interested in learning more!

Thanks for your time! Now, back to our usual blogging.

Eric Mattson is CEO of Online Financial Innovations, the parent company of NetBanker, Online Banking Report and the Finovate Conference Series. He can be reached at eric@netbanker.com.

Trusteer Quantifies the Biggest Online Banking Security Weakness: The End User

2010-02-03T01:42:53Z

I've often wondered how many people use the same username/passwords at their bank as they do at other random websites. I figured it was a substantial number, but never expected it to be as high as the 73% Trusteer cited in a recent white paper (note 1). That's why most financial institutions have used "multi-factor authentication" for years.

One of the most common multi-factor techniques is to ask additional questions if the bank detects a login from an unknown computer. However, it's possible that these same people are also using the same "secret question" answers at non-secure websites, defeating this multi-factor approach.

Luckily, it's still relatively difficult to remove money from most U.S. consumer accounts because online interbank transfers are more tightly controlled, or simply not offered. However, if crooks are able to log in to online/mobile banking and determine the user's account numbers (debit, credit, or checking), a number of more lucrative frauds can be engineered.

What's a bank to do:

Use secret questions that are not commonly used across the Web. Or allow users to create their own, but caution them not to use ones they see at other non-banking websites.
Create an additional out-of-band authentication process (e.g., text message an approval code) for moving funds out of an account.
Do not allow online banking users to see their own account numbers online
(note 3)
Educate/encourage customers to use different username/password for online banking than for other non-financial sites
Financial institutions using Trusteer's Rapport service can identify which customers are sharing username/passwords at less-secure sites and ratchet up internal fraud control settings for these customers

And the most effective method, which we don't recommend because it's just too painful for the user experience:

Force users to make more challenging usernames and/or password such as those with a capital letter, number and/or special character

Silicon Valley Bank (SVB) offers Trusteer's Rapport (link, 2 Feb. 2010)

Notes:
1. While 73% shared banking passwords with other sites, less than half the total, 47%, shared BOTH username and password. Two other data points:
- 65% of user-selected banking usernames were used elsewhere
- 42% of bank-selected banking usernames were used elsewhere
2. Trusteer's data was compiled over 12 months using its plugin software running on more than 4 million computers (see previous post).
3. There's still the issue of the easy-to-read account number on check images; it would be nice to mask it, but that's probably not worth the expense)
4. For more info on Trusteer and other security topics, see our previous reports such as, Online Banking Report: New Security Techniques (Sep. 2008)

Citibank, Microsoft Join Forces with Bundle, a Personal Finance Site with a Data Bent

2010-01-30T01:21:10Z

I had been intrigued about rumors that Microsoft and Citibank were partnering on a joint personal-finance venture called Bundle. I was hoping for the financial services version of an Apple launch.

OK, that's a little too high of a bar to set. I was really just hoping for the next Mint or at least something we hadn't seen before. To some extent, Bundle delivered, with Mint-like attention to design and deeper data than we've seen previously. But in other ways it's just a me-too personal finance site, FiLife 2.0. Bottom line, Bundle has been open only a week so it's way too early to predict where it's going or how it makes money.

Bundle is a personal finance startup backed by Citibank, Microsoft, and Morningstar. Two of the key execs, including CEO Jaidev Shergill, are from Citi Growth Ventures, the group charged with commercializing products and ideas that have bubbled up within the banking giant. The startup also enlisted professional journalists, including Janet Paskin who's written for Dow Jones's SmartMoney Magazine among others.

Given that pedigree, the new site is kind of a SmartMoney Magazine meets your credit card statement with some social networking thrown in the mix.

What distinguishes it from most personal finance content providers is that Bundle showcases proprietary data, sourced from Citibank's massive card-spending warehouse. The site gives center stage to data and shows household spending personalized to your specific location.

There's also professional personal finance advice mixed with stories and comment from the community. Even the articles use the database to illustrate points (screenshot 3).

Naturally, it's well-integrated to Facebook. You cannot even comment unless you log in via Facebook Connect. You can follow Bundle on Twitter, of course, but surprisingly there is no blog or RSS feed.

And Bundle already has its own iPhone app called Vice Tracker (iTunes link) that makes shopping for non-essentials into a tongue-in-cheek game. The unique app was added to the store two weeks ago in the Lifestyle category.

According to the FAQs, Bundle's business model is advertising, but there are no ads on the site yet, other than the logos of the backers (Microsoft is using its MSN Money brand). Presumably, they are looking for financial advertisers, but the Citibank connection might make that a harder sell.

Analysis
I like what Bundle is doing, creating a consumer-facing company around Citibank's cardholder data. But I can't figure out who they are targeting. Maybe they haven't decided yet.

If they want to attract data junkies like myself, the data needs to be more transparent and they need more robust tools to play with it. I enjoyed being able to compare the spending of my Seattle neighbors against that of my home town in Iowa (it's surprisingly similar). But I was left with a number of questions:

Where does the spending data come from? The FAQs are vague on saying that it comes from Citibank card data, government sources and "other third parties."
If it's primarily Citibank card data, is it really representative of the entire town or just the people that hold Citibank cards? For example, Bundle tells me (screenshot #3) that the average dining out expense in Seattle is $115 and the most common spot is Starbucks followed by McDonalds. Something seems wrong with that.
And furthermore, are these estimates of all spending or just that on Citibank cards? And which Citi portfolios are included? What about business cards?
The graphical bubbles are nice, but I like to view data in tables, especially when trying to drill down and do meaningful analysis. Is there some way to see the underlying numbers?

On the other hand, if Bundle is trying to attract readers looking for personal finance advice and discussion, the data is kind of in the way, more window dressing than anything else.

Final thoughts
The graphics are great and the spending data is interesting. But why would I come back? There's only so many times in one's life that you want to compare the shopping habits of your city vs. somewhere else.

Presumably, future versions will allow you to compare your actual spending to the Bundle averages using account-aggregation technology. This is a popular feature of Wesabe, and is one of the major tenets of what we've called "social personal finance" (note 1, 2).

I also expect they'll integrate Bundle into the Citibank cardholder site so its customers can do online comparisons while they are checking their statement online. If Citi can document a spending lift from bundled Bundle, then the startup has proven its value. Armed with that success, it could be licensed to other big card issuers, increasing the value of the Bundle data for all users, attracting more users and more advertisers. The network effect. Perhaps that's the end game here.

#1: Main Bundle page after selecting "Seattle" as location to show spending (29 Jan. 2010)

#2: Main page after drilling down through the "Food & Drink" bubble (link)
Note: Top five restaurants for dining out in Seattle are Starbucks, McDonalds, Subway, Red Robin and Cheesecake Factory. That sounds possible, but then the average purchase size is listed at $115. That's a lot of lattes or Big Macs.

#3: The ever-present "spending balls" hover above an article by Bundle Managing Editor Janet Paskin's short post. The balls compare the spending in Brooklyn with her hometown Seattle
Note: Brooklyn comes out cheaper, see the solid circles (Brooklyn) in front of the cross-hatched ones (Seattle).

Notes:
1. See our previous reports on Social Personal Finance (2007) and Online Investment Communities (2008).
2. Wesabe would seem to be a great acquisition if Bundle wants to add the aggregation technology piece and jump-start its user base. Blippy-like features would also make the site more sticky.
3. For more background on the software tools being used, see the article on Bundle in Microsoft's Financial Services publication published 22 Nov. 2009.

FinovateSpring's Lowest Ticket Prices Expire in 3 Days!

2010-01-28T01:47:27Z

Just a quick reminder that the lowest early-bird ticket prices for FinovateSpring 2010 (May 11 in San Francisco) will expire at the end of January (a mere 3 days from now). If you register this week, you'll save $300 on your ticket and lock in your spot to see debuts and demos of dozens of new financial and banking technological innovations.

Tickets are selling strongly with attendees from great organizations like Visa, Wells Fargo, USAA, AARP, Filene, Google, Capitol One, Experian and many others registering in the last few hours alone.

FinovateSpring 2010, in case you're not familiar with it, is one of our twice-yearly showcases of the best new ideas in banking and financial technology. The show is built around a unique blend of fast-paced demos of actual technology (no slides!) and high-quality networking with an audience of senior FI executives, fintech entrepreneurs, VCs, press, industry analysts and bloggers. It's an awesome environment to find your next competitive edge.

Don't miss out on the best prices on tickets to this great show. Register now!

P.S. Online Banking Report subscribers are entitled to an extra discount to our Finovate conferences. Email me to get it.

Eric Mattson is CEO of Online Financial Innovations, the parent company of NetBanker, Online Banking Report and the Finovate Conference Series. He can be reached at eric@netbanker.com.

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What Does the New Apple iPad Mean for Banking?

2010-01-27T23:08:32Z

Apple today introduced its latest invention, a gigantic $499 iPod Touch called the iPad (inset shows iPad, Kindle, vs. iPhone; note 1).

It's a gorgeous piece of technology that will soon be the movie-watching, ebook-reading device of choice for the rich and famous. But what does it mean for the average financial institution?

Tactically, it should have almost zero impact. Your iPhone/iTouch app should work pretty much the same on the iPad. There may be some design tweaks your programmers will need to understand, but the basic functionality is the same.

It would make a wonderful giveaway item, either as part of a high-end business/private banking package (note 2), or as a sweepstakes prize.

So those of you who already have an iPhone app launched, or in the pipeline, can stop reading now. But read on if you haven't yet hopped on the app bandwagon.

___________________________________________________________________________

The movement to apps, and away from old-school "browsing," is unstoppable. The iPad joins a growing list of new devices (Android, Kindle, etc.) that are app-primary, browser-secondary (note 3).

It's a massive shift that's happened in less than two years, beginning in July 2008 when Apple opened the iPhone platform.

The popularity of apps is changing how users tap online info. Even power laptop/desktop users are making dramatic changes in their information consumption. For example, within a few months of the Apple app store launch, I had already moved 12 of my routine info-gathering tasks to the iPhone. The speed/convenience of pressing a single button vs. navigating to a website via the browser is a significant improvement in user experience. More than a year later, my habits have changed little.

The change from serving customers who were "online browsers" and are now "mobile app users" has profound implications for banking. Instead of talking to your customers in batch- mode with built-in time delays, you are now real-time, feeding data to customer on the go, where they need up-to-the-minute status on their cash situation.

In many ways, the ROI for real-time banking (and here) is more dramatic than online-batch banking. The ability to stamp out POS fraud, to nip budding customer service nightmares, and just plain get closer to the customer, all bring nice returns on the mobile investment (note 3).

Notes:
1. Photo credit: TechCrunch post today.
2. For more info on using a dedicated device for small business customers, see our October Online Banking Report.
3. Groundswell author and Forrester analyst Josh Bernoff calls this the "splinternet."
4. For more info on financial services opportunities on the iPhone, see our March Online Banking Report.
5. Initial response online was mixed, 2,700 readers of CrunchGear, voted "thumbs sideways" today (link, results at 4PM Pacific below)

Blippy Demonstrates the Power of Real-Time Streaming of Financial Transaction Data

2010-01-26T01:59:05Z

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.

New Online Banking Report Available: Ten-Year Online & Mobile Banking Forecast and 2009 Recap

2010-01-23T01:31:25Z

The latest Online Banking Report: 2010 to 2019 Online & Mobile Banking Forecast is now available. It will mail next week to OBR subscribers. It's also available online here. There's no charge for current subscribers; others may download it immediately for US$495.

The report includes our latest 10-year online banking and bill pay forecast. For the third year in a row, the forecast was bumped up a few percentage points to reflect a more robust outlook for adoption, thanks primarily to mobile banking. For example, we now project 73 million U.S. households banking and/or paying bills by online or via mobile in 2013 (note 1).

The report also includes a revised 10-year forecast for U.S. peer-to-peer lending. After experiencing a 30% decline in 2009, we expect healthy growth next year with a record amount of loan originations.

Top ten innovations & trends of 2009 and of the decade
The report includes a summary of the top ten innovations of the past year, including the surge in mobile banking usage, the amazing tools coming out of the iTunes App Store, and of course, the surprising adoption of Twitter, with nearly 1000 financial institutions worldwide tapping the real-time info stream (note 4).

We also listed the top 25 innovations of the decade topped by the invention of simple online payments by PayPal ten years ago (note 2) and the advent of modern mobile banking (note 3) which appeared in the United States just three years ago at Citibank (powered by mFoundry) and BancorpSouth (powered by Firethorn).

Notes:
1. Mobile banking access is included in the overall online banking numbers, but it's also shown as a separate line item.
2. Technically, this launched in mid-Nov. 1999, but that seems close enough to 2000 to make the all-decade list.
3. There were a number of earlier mobile efforts, including from Citibank, in the 1999 to 2001 period, but they were ahead of their time and shuttered in 2001/2002 for lack of interest. The "modern era" began in 2007 in the United States.
4. Follow them all on Twitter via The Financial Brand's financial institution lists.

Syphr Launches Credit and Loan Info Site, MoreThanACreditReport.com

2010-01-21T15:55:30Z

Syphr LLC is a technology and marketing CUSO (Credit Union Service Organization) that develops online tools to connect community banks and credit unions with prospective members. The company is owned by Eastern New York FCU and several other credit unions. Syphr's primary product is the RateMatch system, which allows banks and credit unions to position loan offers in front of consumers as they check their credit reports online (FinovateStartup 2009 demo here.)

Syphr's RateMatch system was designed to help credit unions find new members and loan customers. Syphr generates revenue by charging financial institutions when prospective clients click on a link to contact the institution. According to Syphr, the RateMatch engine has processed more than 5,000 reports, with an average loan payment savings of $239 per month.

Syphr's newest innovation is MoreThanACreditReport.com, a credit reporting website with targeted loan information. It's designed to help consumers save by comparing their current loans to those offered by Syphr's affiliated banks and credit unions. Instead of offering just the credit report, the company provides money-saving loan deals. The site launched January 14, 2010 (press release here).

Although the site emphasizes a free credit report, MoreThanACreditReport charges users $14.95/month after a seven-day free trial (see screenshot below; highlighting has been added).

As part of that membership fee, the site's customers get access to other Syphr products including monthly credit monitoring, a credit report every six months, and Syphr's Payment Patrol system, which allows customers to receive notifications of better loan options as interest rates change.

How MoreThanACreditReport.com Works:

1. Consumers register at the MoreThanACreditReport.com site to get their credit report.

2. The site uses the consumer's Zip code to display average loan rates for the local area.

3. Next, using the consumer's credit card information, the site pulls an Experion credit report using a soft pull that does not show as an inquiry on the borrower's credit file.

4. Syphr's RateMatch technology analyzes the user's existing loans and searches for better deals available from affiliated financial institutions in their local area. RateMatch is powered by DataTrac, one of the largest interest rate databases in the United States.

5. The site shows the comparison to the consumer, highlighting where they can save money by refinancing or switching loans. In the example below, Eastern New York FCU is identified as a place that could save the user $60 per month.

If there are no participating financial institutions in the consumer's local area, they are given a RateTrac report, which compares the consumer's loans against the average payment plans offered by loan providers in the area. If the report shows that the consumer is paying more than the local average, the consumer can use the data to help negotiate lower rates.

6. If there are participating lenders available, the website allows consumers to contact the lenders directly simply by clicking on the "exchange it" button. Lenders automatically receive the customer's contact details and credit info.

7. Clicking on an offer on the MoreThanACreditReport site does not constitute a firm offer of credit. The bank or credit union follows up to arrange the actual loan. Because the loan information presented by the website is based on the consumer's credit report, it is likely to be representative of what the participating bank will offer.

My take: Saving money on loans is one of the key reasons people check their credit reports. Syphr says that more than 175,000 people check their credit reports online each month. As a lead-generation system for financial institutions, MoreThanACreditReport.com has the advantage of putting loan offers in front of consumers at the precise time they are thinking about a new loan.

The MoreThanACreditReport.com site

RateMatch Offers Loan Savings

A Thank You to our January 2010 NetBanker Sponsors

2010-01-21T14:58:43Z

As we start 2010, we're very excited about the level of innovation in fintech specifically and the financial industry in general. We're excited not only to research the next wave of innovations for Online Banking Report, but also to cover them here on NetBanker for all of our blog readers. And we really appreciate the sponsors that help us keep NetBanker as a free and high-quality industry resource.

Please support our sponsors (listed below in alphabetical order) so that they continue to support NetBanker:

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

Wesabe -- Promoting their new Springboard product -- a white-label version of their personal finance capabilities and community for financial institutions. Take a look!

Worklight -- Check out this new demo of how Worklight helps businesses securely engage their customers via widgets, social networks, iPhone apps and other consumer tools.

Yodlee -- Download a new free whitepaper from Yodlee on "The Fast-Changing Market of PFM: What Consumers Really Want, And Why Banks Can't Afford to Wait."

Now, back to the regularly scheduled blogging.

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

Eric Mattson is CEO of Online Financial Innovations, the parent company of NetBanker, Online Banking Report and the Finovate Conference Series. He can be reached at eric@netbanker.com.

Chase Bank Invites Business Customers to Join Business Advisory Board

2010-01-20T04:30:38Z

I received an email this morning (see below) from Chase Bank inviting me to participate in a new Business Advisory Board, powered by Lightspeed Research. My colleague also received the same invite for his separate account, so it doesn't appear to have been a particularly selective emailing. Both accounts were acquired by Chase in the 2008 WaMu debacle.

To sign up, users simply complete a 10-question one-page online form (first part shown below in screenshot 2) which took just under six minutes (note 1).

After completing the registration, I expected to be ushered into some type of special club, but all I received was a 15-word paragraph telling me to confirm my email address (screenshot #3). That's a bit of a letdown after giving the bank nearly 10 minutes of my day. I surmised the big payoff would come after confirming and logging back in.

I was wrong. After logging in, I was greeted with a short thank-you statement and an invitation to take the "welcome survey," which turned out to be three questions about the 2010 economic outlook (screenshot #4). And that was it. Nothing more to see or do. No blog. No "online community" (promised in email). No special offers (note 2). They didn't even have the courtesy to share the results from the survey I just took (note 3). I began to wonder if I'd been scammed.

Analysis: On the surface I love this idea: inviting customers to participate in an online advisory board. Customers like to be noticed and heard, and a chance to win $100 is icing on the cake. But if you intend to ask business customers to take 15 minutes out of their day, it better be for something real. So far, I just feel stupid for signing up and thinking that I was actually going to make a difference at the bank.

Hopefully, they'll make up for the bad start with interesting opportunities down the road. But the bank will have to work doubly hard to get my attention after this wasted effort.

Email from Chase Business Banking (received 19 Jan. 2010, 1:55 PM Pacific)
Note: Highlighting mine

1. Landing page from email (link, 19 Jan. 2010)

2. Registration page (click to enlarge; link)
Note: Registrants are entered into a sweepstakes to win one of ten $100 prizes.

3. Registration thank-you screen

4. Three-question welcome survey is available after confirming your email address

Notes:
1. Although the site says it's for business-banking customers of Chase and WaMu, it appears that anyone that finds the website can join.
2. Under the "Rewards" tab, information tantalizes regarding earning "cash, prizes, sweepstakes entries" for survey-respondents. But there are no examples or surveys available, so it's one more small letdown.
3. Business owners that read through the online FAQs will find out that they may be contacted one or two times per month with "research opportunities," but Chase shouldn't bury this key info in the FAQs where only a small percentage of users will find it.
4. See our recent Online Banking Report for more ideas on how to serve small- and micro-businesses through the online and mobile channels.

Banks Help Fundraising Efforts for Haiti Relief

2010-01-18T21:47:22Z

One of the lasting benefits of the Internet is it's ability to quickly rally resources. The latest proof point: raising funds for Haitian earthquake relief. The big Internet companies, such as Amazon, Google, Bing, Craigslist and PayPal, post links almost immediately to provide site visitors with a trusted path to donate funds (see screenshots below).

Consumers trust those companies and visit frequently, so it's a great way to raise awareness and funds. But there's another group of Internet powerhouses that historically have not participated in Web-based fundraising: financial institutions.

Even during the New Orleans flooding in 2005, we found only three top-50 banks linking to the Red Cross. It's not a whole lot better this time. But one major bank, Citibank, has a homepage link to earthquake relief (screenshots below). Also, we found two other top-50 banks with homepage links: Astoria Federal and Webster Bank (see screenshots below). None of the largest 10 credit unions had links up on Saturday.

Several major banks, such as Wells Fargo and Chase, have homepage references to their own donations, but no way for their customers to participate directly.

Online bill-pay fundraising
Another welcome addition to bank-enabled fundraising was launched by Online Resources just two days after the earthquake hit. The bill-pay provider created banners and splash pages for its clients to use in publicizing the availability of bank bill pay for use in donating to the Red Cross (see inset right and top of the page; link to ORCC page with examples).

As of Friday, ORCC had commitments from about 10 clients to participate in the effort.

Mobile fundraising
It was also interesting to see the role mobile is taking in the current crisis. Websites and television networks have done a great job publicizing a simple way to donate $10 to the Red Cross: text "Haiti" to the shortcode 90999. Once you authorize the transaction via a return text message, $10 is automatically added to your mobile phone bill. The service is powered by mGive, a nonprofit based in Colorado. In a Friday blog post, the organization said $8.5 million had been raised so far, a number likely exceeding $10 million by now.

Banks with links: Citibank, Astoria, and Webster Bank (18 Jan. 2010)

Links for Haitian relief at Google, PayPal, Amazon, Craigslist, and Microsoft Bing (18 Jan. 2010, 11 AM PDT)

Home-Account Launches New Service at Refinance.com

2010-01-15T18:16:41Z

Online mortgage startup Home-Account has licensed the refinance.com domain name and today launched a new, free service for people seeking to refinance their homes (press release).

The domain name was formerly that of Homebridge Mortgage Bankers Corporation, which had acquired the name for more than $700,000 in 2005. But in the 2008 mortgage meltdown, Homebridge went out of business and the valuable domain name went unused throughout 2009.

Home-Account is a 2009 Finovate alum (video here and here) specializing in helping consumers navigate the confusing mortgage marketplace. The startup uses an online system to assess a home loan applicant's suitability before they apply. It then provides advice and assistance in finding the best mortgage. The company contracts with mortgage lenders to provide firm price quotes at the end of the process. Lenders pay Home-Account a fixed fee for each mortgage.

The startup has enlisted noted mortgage finance expert Jack Guttenberg, also known as the Mortgage Professor (link) to endorse the service.

How it works:

1. To begin the process, simply enter a Zip code.

2. Complete a three-part online application detailing personal financial info (including social security number), info on existing mortgages, and a short "mortgage personality" quiz to help match buyer needs with mortgage options (e.g., fixed vs. variable rate).

3. Confirm identity using info from credit files.

4. Home-Account then pulls a credit report using a soft pull that does not show as an inquiry on the borrower's credit file.

5. The site provides a loan-eligibility score, a few quick tips on improving credit qualifications, and firm loan offers including rates and all fees from qualified lenders. The borrower reviews the various offers side-by-side, a feature that should provoke healthy competition among the lenders.

6. If the borrower decides to move forward, they click on their desired loan to lock in the offered rate.

7. The selected lender then closes the loan directly with the borrower.

At launch, several lenders are offering loans through the system including: GoodMortgage.com, RoundPoint Mortgage Company, Eagle National Bank and First Choice Funding.

Analysis: The mortgage shopping and refinance process is still a mystery to a large percentage of consumers. It is difficult to compare prices while shopping, and the myriad of fees tacked on during the process can leave a bad taste with the borrower. Consumers rarely know if they truly received a fair deal when all is said and done. The Home-Account/Refinance.com solution promises to add more transparency during the entire mortgage process. That's welcome news to scandal-weary American consumers.

However, convincing skeptical consumers to trust its mortgage-recommendation engine will be a major challenge for Home-Account. Third-party endorsements, and possible integration with financial institutions or personal finance tool providers, will be vitally important.

Refinance.com #1 - The site grades loan eligibility ...

Refinance.com #2 - ... and suggest ways to improve it.

Cardlytics Launches Innovative Debit Card Incentives Program

2010-01-13T21:39:28Z

Would you like your bank statement to be more interactive? Cardlytics is betting you would. The company's patent-pending technology allows merchants to present their customers with rewards and incentives for shopping with existing bankcards, without needing extra coupons or promotional codes.

But the clever part is that the incentives are placed directly in the customer's online bank statement. The consumer can activate an offer by clicking on it and then using their card at the merchant. No coupons necessary.

Here's how it works:

(1) Bank clients log into online banking. The bank statement includes special offers based on the client's previous spending. As shown below, offers are presented next to the transaction record:

(2) To get more information, users click the expand link.

(3) After seeing the full offer, users can choose to accept it or get more information. Accepting the offer activates the promotional deal.

(4) Once the promotion has been activated, the cardholder simply uses the associated debit or credit card at the merchant. The reward dollars are then automatically credited to the account. Nothing needs to be printed or carried to the store.

(5) Qualifying transactions are instantly confirmed in the consumers' online banking statement.

Analysis:The Cardlytics system is a useful tool for banks seeking to develop incentive programs. According to Cardlytics CEO Scott Grimes, consumers in the current economy are no longer buying into the "pay for it later" mentality fostered by credit cards, making this the perfect time for banks to provide debit card incentives. Merchants fund the rewards in exchange for the highly targeted advertising.

The appeal for the merchants is obvious. They are able to make highly targeted offers directly to customers of their competitors. In the example above, McDonald's places its famous Golden Arches in front of a Burger King customer. That's a definite score.

As a result, more than 50 national retailers have signed up for the platform.

One cautionary note: Will Burger King customers feel they've been sold off to McDonalds by their banks? It's a real concern. Customer education will be important so that consumers understand that no personally identifiable information is being released to advertisers.

The ultimate test for Cardlytics will come from the consumer. Will the Cardlytics program increase bankcard use? It might if the deals are attractive enough to change behavior. So far, the company reports positive results, with an average response rate of 15% and some going as high as 40%.

I'll be watching my bank statement.