Ron Lee @ Sundog

Consumers to Big Banks: We “Like” You Again

ron.lee@sundog.net (Ron Lee) — 2013-04-29T18:16:06+00:00

Survey says: Thumbs up! J.D. Power and Associates recently released its 8th annual U.S. Retail Banking Satisfaction Study,SM and the results show significant improvements in customer satisfaction. That has to be welcome news for banks, which last year got hammered on satisfaction scores, particularly over the rollout of monthly maintenance fees.

After several years of fairly minor increases in overall scores, customer satisfaction this year increased by 10 index points in the most recent survey, compared to last year (from 753 in 2012 to 763 this year on a 1,000-point scale).

Somewhat surprisingly, the largest increase in satisfaction scores was seen in the “big bank” segment (think Citi, Chase, Bank of America), which improved 16 points in 2013. Typically, the big bank segment has lagged behind smaller banks in customer satisfaction by a decent margin. This year that gap closed. Why?

According to Jim Miller – Sr. Director of Banking Services at J.D. Power and Associates, that gap closed due to two primary reasons: Big banks not only ramped up their phone and branch customer service efforts and problem resolution, but they offered customers easier ways of doing their banking thanks to mobile and online banking, including remote check deposit, which customers are flocking to.

Moreover, consumer attitudes towards big banks appear to be shifting. Consumers generally used to regard big banks as offering better convenience, while smaller banks offered better service.

Now, research trends tracked by J.D. Power suggest service at big banks is getting better thanks to extended branch hours, more locations, more services and broader technology offerings.

Yet, according to Miller, there still is a consumer segment which values services provided at smaller, “in my community” banks. To stay competitive, Miller says smaller banks will have to leverage technology so big banks won’t be the only ones offering the latest in tech advantages for online and mobile banking, and far-reaching ATM networks.

The ongoing banking research measures satisfaction among banks in 11 regions, focusing on six dimensions: account information; channel activities; facility; fees; problem resolution; and product offerings.

The 2013 study (fielded in January and February) is based on responses from close to 52,000 retail banking customers from more than 120 of the largest U.S. banks.

Given the turmoil seen in our banking arena during the past couple of years, this upward trend in overall satisfaction must be very welcome news to bank executives and front-line staff.

Advice to Banks: Don’t “Park” your LinkedIn Page

ron.lee@sundog.net (Ron Lee) — 2013-03-28T16:21:12+00:00

In its annual survey of financial marketers, the team at The Financial Brand found this disparity: While close to half of banks and credit unions claim they are “using” LinkedIn, very few in practice are actually updating their pages or taking advantage of basic features available to them. Advice to bankers from Financial Brand: “Setting up a page on LinkedIn and customizing profile information does not constitute utilization. It’s called ‘parking your page.’”

In response, The Financial Brand offers key recommendations for bankers to improve their LinkedIn company page and boost followers. Here’s a quick summary:

Add a “Hero” photo or graphic to your page – this could be a banner or text-based message. A majority (66.0%) of the financial institutions studied by The Financial Brand did not include a hero image.
Add content and video to your “Products and Services” tab. Financial Brand’s research indicated 71.5% of LinkedIn pages reviewed had zero information in the “Products” tab that’s built into every company page. Also, you can add YouTube video by pasting the video’s URL into a box in the LinkedIn admin dashboard.
Ask for Product and Service reviews. Granted, this may make bankers nervous, but LinkedIn allows its users to recommend a financial institution’s products and services.
Publish updates regularly. Out of 200 banks and credit unions on LinkedIn studied by The Financial Brand, only 43 have ever published at least one update. The other 78.5% “have never said a peep.”
Use “Featured Updates” to highlight your best content. This allows you to tack or “pin” a key post at the top of your stream so it’s the first thing people see.
Utilize the Career tab. Financial Brand reports only 12% of all banks and credit unions utilize LinkedIn’s “Career” tab on their company page. For a fee, bankers can obtain a full suite of features for promoting careers.
Promote your page. Out of 200 financial institutions studied by The Financial Brand, 18 were active on LinkedIn but didn’t bother promoting their company page on their website. Advice? Use your website, contact page, blog, email signatures, newsletters, etc. to build followers.
Finally, take LinkedIn seriously. The Financial Brand says if you adopt a “set-it-and-forget-it” parking-lot strategy, you won’t find success with LinkedIn, or any other social media channel for that matter.

For more information and examples, review the full list of LinkedIn recommendations posted at The Financial Brand.

Banks Warming to Google Apps for Business

ron.lee@sundog.net (Ron Lee) — 2013-02-28T20:20:46+00:00

Citing cost savings and productivity gains, bank IT execs finally appear to be warming up to cloud-based productivity suites such as Google Apps for Business.

American Banker (registration required) recently reported on one such example, showing how the IT team at Georgia’s $1.2 billion Colony Bank ditched in-house servers and desktop email clients in favor of Google Apps for Business.

As reported by American Banker, Colony converted more than 330 employees to Google Apps last year. Now its bankers handle daily tasks like email, calendar, chat and more.

Since moving to Google Apps, Colony bankers interviewed for the article cited benefits of the migration to include such items as:

Eliminating the need to maintain and manage email servers
Productivity gains using Google App’s for daily workflow and tasks
Collaboration tools to increase knowledge sharing
Mobile-device friendly, for use in meetings to cut down on paper printouts
Strong search capabilities
Disaster recovery and storage of email
Familiar user-interface for those already using Gmail for personal accounts

As reviewed in the article, part of Colony’s success with the migration came as a result of a strong training and communication plan. For example, Colony bankers, with the help of a third-party training firm, helped coach and train “Google Guides” at each of the 28 branch locations and corporate offices, to ensure a smooth transition to Google Apps.

As this case study shows, there appears to be a slow but growing trend of banks going to the cloud for email service and other productivity tools as a way to offset, among other things, costs.

To that end, Colony’s IT staff, as quoted in the article, estimated they used to spend around $80,000 a year for hardware and software for the existing in-house system. With a move to the cloud, Google Apps’ basic pricing is $50 per user (times 330 employees) per year – a savings, no doubt, making their CFO to smile all the way to the bank.

GoBank: At the Intersection of Smartphone and Banking

ron.lee@sundog.net (Ron Lee) — 2013-01-31T19:29:00+00:00

Green Dot, the nation’s largest provider of prepaid debit cards, wants to be to the banking industry what the iPod was to the music industry – disruptive. In a report by Mashable’s business reporter Seth Fiegerman, Green Dot is launching GoBank, a new bank account specifically designed from start to finish for smartphone-savvy customers.

With GoBank, one won’t find a branch or a teller. Instead, users will find a rich mobile user-experience, a partnership with WalMart for making deposits, and access to 40,000 fee-free ATMS around the country (“…more than twice the size of Chase or Bank of America”, according to Green Dot press release). And, from a “how safe is my money” standpoint, GoBank is also FDIC insured.

The genesis for GoBank was tapping into consumer dislike of banks and fees.

According to Green Dot executive Sam Altman, who was quoted in the Mashable post, “We have tried to bring everything we always wanted in a bank and take out all the things we hate about a bank.”

As summarized in parent company Green Dot’s press release, GoBank intends to eliminate some those major banking irritants: no overdraft fees, no penalty fees, no minimum balance requirements, and no required monthly fees.

In its place, GoBank only has four fees: using of out-of-network ATMs, using debit cards abroad, customizing a debit card and upfront membership fees.

To that end (and taking a lesson from the Radiohead model of asking users to determine how much they are willing to pay for a monthly fee, says Mashable’s Fiegerman), GoBank customers decide up front how much they want to pay for the membership fee, from nothing up to $9.

As stated in Green Dot’s press release, “Allowing the customer to voluntarily pay what they think is fair gives the customer the power to punish or reward GoBank based on how they feel about the product. This provides an emotional benefit for the member because it puts them in control of their bank.”

Other features of GoBank:

Mobile first: customers can easily set up accounts from their phones using GoBank’s mobile website or iOS and Android apps.
Payments: They can send money to friends via email, text and Facebook.
Customization: GoBank lets people customize their debit cards with a photo, even one taken from a user’s Facebook account.
Guide: users can turn to the Fortune Teller feature in the app to determine whether to make a purchase based on current budget.

GoBank joins other online-only bank players Simple (formerly BankSimple) and Bluebird (a joint venture from American Express and Walmart).

With GoBank, Green Dot is betting consumers are frustrated enough with existing big banks and fees to consider switching. The hope for Green Dot, which had 4.4 million active prepaid accounts as of last quarter, is that adding GoBank to the mix will expand its customer base.

GoBank is currently available in beta and will accept around 20,000 users in the next couple months before launching publicly.

As Green Dot’s Altman points out in the Mashable post, the new bank account isn’t for those who prefer bricks and mortar. Instead, Altman suggests, “If you live on Facebook and your phone all the time, then we’re probably a great choice.”

Or, if you look at GoBank’s tagline, “It’s about time.”

Regulators Weigh In on How Banks Use Social Media

ron.lee@sundog.net (Ron Lee) — 2013-01-30T21:29:30+00:00

For bank-marketing executives who thought their social media programs were running smoothly, a virtual speed bump could now stand in their way: Regulators (specifically, the Federal Financial Institutions Examination Council or FFIEC) recently released proposed guidelines governing how financial institutions use social media.

The guidelines state banks will need formal written social media strategies, plus buttoned-down governance, monitoring and measurement protocols to ensure social-media compliance with all applicable consumer protection laws.

As stated in the FFIEC press release, “… financial institutions are using social media as a tool to generate new business and provide a dynamic environment to interact with consumers. As with any product channel, financial institutions must manage potential risks to the financial institution and consumers by ensuring that their risk management programs provide appropriate oversight and control to address the risk areas discussed within this guidance.”
FFIEC says its guidance is meant to help financial institutions identify potential risks to ensure institutions are aware of their responsibilities to address risks within their overall risk management program when it comes to social media strategies, even if a bank does not have a social media presence.

As reported in The FinancialBrand.com, “The FFIEC considers social media to include interactive online communication in which users generate and share content through text, images, audio and/or video — including, but not limited to, micro-blogging sites (e.g., Facebook, Google Plus, MySpace, and Twitter); forums, blogs, customer review web sites and bulletin boards (e.g., Yelp); photo and video sites (e.g., Flickr and YouTube); sites that enable professional networking (e.g., LinkedIn); virtual worlds (e.g., Second Life); and social games (e.g., FarmVille).”

So just how could banks manage the social media risk that would pass muster with the Regulators? FFIEC has proposed a risk management program to include:

Strategic Management: A governance structure with clear roles and responsibilities: the board of directors or senior management will need to direct how using social media contributes to the strategic goals of the institution; and establishes controls and ongoing assessment of risk in social media activities.

Guidelines: Policies and procedures for the use and monitoring of social media and compliance with all applicable consumer protection laws, regulations, and guidance.

Vendor Management: A due diligence process for selecting and managing third-party service provider relationships in connection with social media.

Training: An employee training program that incorporates the institution’s policies and procedures for official, work-related use of social media.

Monitoring: An oversight process for monitoring information posted to proprietary social media sites administered by the financial institution or a contracted third party.

Compliance: Audit and compliance functions to ensure ongoing compliance with internal policies and all applicable laws, regulations, and guidance; and

ROI: Parameters for providing appropriate reporting to the financial institution’s board of directors or senior management to evaluate the effectiveness of the social media program and whether the program is achieving its stated objectives.

A posting on The FinancialBrand.com probably best sums up how bankers could be feeling after wading through the 31-page document: “Regulatory Shocker on Social Media in Banking Coming Soon.”

Once they get over the shock and awe, bankers will have until mid-March to offer feedback. Let the comments begin.

New Year’s Resolution: Get “Creative” with LinkedIn Profiles

ron.lee@sundog.net (Ron Lee) — 2012-12-31T17:08:45+00:00

The LinkedIn team recently completed its annual ranking of “popular” (also known as overused) buzzwords from among its 187 million user profiles across the world.

Globally, top buzzwords making this year’s list included: Analytical, Creative, Effective, Experimental, Motivated, Multinational, Responsible and Specialized.

Last year, the top three buzzwords included Creative, Effective and Effective Experience.

Comparing 2011 to 2012 results, LinkedIn researchers noted the number-one buzzword globally remains “Creative.”

In the United States, the top ten buzzword list for 2012 included these descriptors:

Creative
Organizational
Effective
Motivated
Extensive Experience
Track Record
Innovative
Responsible
Analytical
Problem Solving

Researchers noted more members in 2012 described themselves as “responsible” and “analytical,” which made an appearance on LinkedIn rankings for the first time, knocking out “dynamic” and “communication skills” from the list. “Motivated” now appears to be ranked higher than “extensive experience,” which had been an earlier top buzzword.

Advice from LinkedIn researchers: “Your LinkedIn Profile is an opportunity to define your professional identity. Set yourself apart in the new year by wiping your profile clean of buzzwords!”

With that, resolve in 2013 to be more “creative” with your profile. Otherwise, your LinkedIn listing might be compared to the famous Yogi Berra quote, “It’s déjà vu all over again.”

Farewell to “Free” Checking Accounts?

ron.lee@sundog.net (Ron Lee) — 2012-09-30T22:04:18+00:00

A three-year slide in the number of banks offering free checking is putting this classic account on the path to potential extinction. Will the “free” in checking soon be on an endangered list? Research suggests it could happen.

Once a core “have-to-have” bank offering to new customers and their deposits, free checking now is only offered at 39% of banks in the U.S., down from a peak in 2009 when 76% of banks offered free checking or DDA accounts, according to studies by BankRate.com. That fact garnered a recent headline in The Financial Brand, “Free Checking Steps Closer To The Graveyard.”

Free checking is so named because such an account has no minimum balance and no monthly fee. However, as the BankRate.com research painfully shows, even when one can find a free checking account, it has, in many cases, transformed into a “fee” checking account.

In turn, when it comes to fees, almost every checking account fee is showing steep increases. The Bankrate.com research cites the average monthly maintenance fee for a noninterest-bearing checking account rose to a record high $5.48, an increase of 25% over last year.

In addition, The Financial Brand also cites these other checking-account changes: minimum account balances required to avoid fees are going up; minimum amounts to open a checking account are on the rise; and overdraft fees continue to creep up as banks make up ground for regulatory changes, which have eaten into previously lucrative fee-income streams.

It may come as no surprise that 72% of Americans said they would consider switching banks if their financial institution raised its fees on checking accounts, up from 64% in March 2011, according to a MoneyRates.com study.

To be sure, banks still offering free checking no doubt will ratchet up the marketing volume and font size on the word “free” in their checking services to capture fee-weary consumers.

However, as the trending suggests, free checking may not be dead yet, but this classic offering could soon be placed on an endangered list, right up there with writing checks and giving away free toasters.

Mint.com boasts ten million users

ron.lee@sundog.net (Ron Lee) — 2012-08-31T19:49:00+00:00

The team at Mint.com must be reveling in the sweet taste of success. TechCrunch just profiled Mint.com’s rapid rise with these statistics: From its launch five years ago with half a million accounts in its first year, Mint.com now reports ten million registered users, $1 trillion in loans and assets and $80 billion in credit and debit transactions.

Granted, much of the growth can be linked to its acquisition by Intuit in 2009, when Mint.com only had 1.7 million users. How quickly things changed.

Bolstered by Intuit’s brand power, customer base of Turbo Tax, Quicken and QuickenBooks users, and key alliances with thousands of banks and credit unions, Mint.com’s unique personal financial management (PFM) service has struck a virtual chord with users.

As reported in TechCrunch, one of those chords is mobile.

Mint.com launched in Sept. of 2007, right about the time of the first iPhones. Today, as reported in the article, 70% of Mint.com users use iPhone and iPad as their main Mint portal alongside the main website. Plus, with iOS and Android apps, users can do pretty much anything from their mobile devices, like add new banks and modify budgets on the fly. That kind of mobile use is even driving user-experience design decisions for the web interface.

Ahead, the TechCrunch report hints at a future Near Field Communication (NFC) offering from Mint.com, considering that an NFC-enabled iPhone could be a very real offering in the distant future. That topic received a predictable “no comment” from Mint.com execs.

Meanwhile, rumors aside, Mint.com continues to march on with its mission to help people understand and do more with their money. One press report called it: “Your financial situation in the palm of your hand.”

Ten million users would seem to agree.

The new world of bank marketing

ron.lee@sundog.net (Ron Lee) — 2012-07-31T16:10:09+00:00

Terence Roche, bank consultant with Cornerstone Advisors, has some advice for bank marketing teams: It’s time to reinvent. The “new and improved” marketing function of tomorrow will need to lead and support the huge “behavior migrations” customers are undergoing.

From changes in channels, payments, sales culture and product profitability, bank marketing teams have the opportunity to be more relevant and plugged in than ever. And that means, goodbye free toasters, hello leading the sales-and-service charge.

In a recent post at GonzoBanker.com titled, “The New, Wired, Deal-Makin’, Name-Takin’, Game-Changin’ World of Marketing,” Roche outlines five key attributes nimble marketing teams will need, paraphrased below:

They will be payments data and wisdom junkies: Marketing must add the wisdom and focus that translates data into campaigns. The detail available from loan apps, debit card and credit card transaction reports is the new marketing “gold” that can lead to specific and targeted offers and promotions.
They will turn data into deals and alliances: Using the data, Marketing can become deal-making artists. Banks could take buying information for customers to other businesses and work with them to increase customer foot or click traffic through deals and offers.
They will be experts at cross-channel marketing: Customer movement among channels is regular and unpredictable. So, financial institutions need to plan for the next offer to be presented through any one of these channels—branch, call center, web, and mobile.
They will put meat on the bone when creating call lists and opportunities for front-line staff: Marketing must be viewed in the future as the expert in providing intelligent, actionable leads, not just a sender of another useless cold-calling list.
They will walk the talk of social media and communities: You can’t deal with online communities, blogging, tweeting and other forms of social media while standing on the sidelines. How many Marketing employees are active in online communities daily? How many regularly tweet? How many regularly blog? How many look at and contribute to YouTube? Marketing will have to live in this world, not just track it.

Roche concludes his post by noting the challenges are enormous, but there has never been a better time to be in marketing. “The bank never needed you more,” he says. “The opportunity to increase marketing value and relevance is right there, and it’s big. The risk of not doing this, or not doing it well, is equally big. What marketing manager could ask for better than that?”

Billions in Bank Deposits at Risk as Consumers Consider Switching

ron.lee@sundog.net (Ron Lee) — 2012-06-27T18:21:21+00:00

A report published this week by Javelin Strategy & Research suggests 11% of consumers are likely to switch primary financial institutions this year. Big banks – the likes of Citibank and Bank of America – could see defection figures double that. And this means banks, in an ongoing quest to grow deposits, will be gearing up even more to retain and acquire customers.

As reported in its press release, Javelin’s Financial Institutions Vulnerability Index shows potential for huge losses for banks because switchers manage $675 billion in deposits.

Moreover, those likely to switch actually manage deposit balances that are one-third higher than customers who are likely to remain at their current banks.

Even more surprising, the report found those likely to move deposits are actually willing to pay fees for a handful of value-added services: money orders, cashier’s checks, safe-deposit box rentals and mobile deposit.

A senior analyst at Javelin says their research shows banks are still very much in danger of losing customers to other financial institutions that can better respond to customer needs, especially with mobile banking and self-service technology. To that end, mobile banking has emerged as a key factor for those switching banks. The report shows more than half of recent switchers are under 35 years of age and use mobile technologies (smartphones and tablets) frequently.

Given this turmoil, should bank marketers hide their heads in the sand, develop retention strategies, or launch customer acquisition campaigns?

Javelin’s president Jim Van Dyke has this advice: “Giant banks will need to drive home their messaging around convenience, mobile banking, and other services that smaller banks don’t – or can’t – offer. Smaller banks can play to their strengths of lower fees, convenience, and customer service, but they will need to beef up their mobile banking and mobile deposit offerings.”

What this research really signals is big opportunity. With billions in deposits and millions in fee revenue up for grabs, banks and credit unions, large and small, have the opportunity to both acquire new customers and retain those already in the deposit fold.

For bankers, this situation may be akin to the Yogi Berra quote, “It’s déjà vu all over again.”

In other words, while certainly not a new bank-marketing rallying cry, let the battle for bank deposits – and with it, the hearts and minds of disaffected bank customers – begin yet again.