Tuesday, February 23, 2010

New York Times Attacks Chase Bank's First Reg E Communication

Chase Bank has already begun communication around Regulation E, and the New York Times (and more than 50 additional media outlets) are reacting quickly with a review of their direct marketing testing in an article titled, "Banks Apply Pressure to Keep Fees Rolling In". The article made special note of the part of the Chase mailing that stated, “Your debit card may not work the same way anymore, even if you just made a deposit. Unless we hear from you.” According to the NYT, the mailing continues to warn (in big red type), “If you don’t contact us, your everyday debit card transactions that overdraw your account will not be authorized after August 15, 2010 — even in an emergency,” with 'even in an emergency' underlined. Additional toned down versions of communication are also being tested by Chase, including a postcard that simply asks customers to be ready for future ways to say yes to debit card overdraft coverage.

Saturday, February 20, 2010

Segment Your Customer Base For Reg E Communications

The recent changes to Reg. E, impacting how financial institutions can levy fees for overdrafts caused by one time debit card or ATM transaction, have created a period of both challenge and opportunity for financial institutions. Due to the almost certain negative impact on a bank’s fee revenue and potential customer confusion about this new regulation, it is important to be able to effectively and efficiently implement these new requirements, maximizing account holder opt-in responses while providing a positive customer experience.

In this month's ABA Bank Marketing Magazine, Robert Giltner from Velocity Solutions suggests that financial institutions should start their communications process with a mass mail and email campaign to all customers explaining the new regulation. While I agree that all customers should be provided a clear understanding of their options, I don't agree that an all encompassing direct mailing should be done from a cost perspective.

Wednesday, February 17, 2010

Capital One Continues to Innovate

Historically an aggressive marketer and innovator in the credit card industry, Captital One has expanded its reach in recent years, using their growing banking franchise as the foundation for introducing innovative banking products. In addition to having a relatively rich debit rewards program and expanding into online and small business banking, they have recently introduced a new savings product called "InterestPlus Online Savings".

The saving program offers an above market interest rate on balances over $2,500 in addition to a 10% quarterly interest bonus payment paid if the customer uses their Capital One credit card once a month.

Saturday, February 13, 2010

Mobile Banking Popular Among Smart Phone Users

According to the "Mobile Money Study" published last month by Data Innovation Network almost 70% of US smartphone users had used at least one mobile banking and/or payment service on their phone in the previous three months.

As has been found in previous studies and reinforced by Doug Brown from Bank of America at last year's BAI Retail Delivery Conference in Boston, the Mobile Money Study found that checking account balances was the most popular banking application (82%) followed by looking for posted transactions (62%). Account alert features were also popular (46%), with roughly 40% of those surveyed transferring money between accounts.

Wednesday, February 10, 2010

Targeting New Movers for Enhanced Growth

According to the U.S. Census Bureau, the national mover rate declined from 13.2% in 2007 to 11.9% in 2008 - the lowest rate of moves on record. Still, over 30 million people changed residences during this one year period, representing a powerful opportunity for new customer growth. In fact, even though the demographics of movers has skewed younger, with a higher percentage of renters moving, this segment continues to outperform all other prospect universes from a new customer acquisition perspective.

While many of my clients continue to focus on checking offers for the new mover segment, more banks are realizing the benefits of promoting products such as money market accounts and even equity credit and investment services.

Friday, February 5, 2010

Consumer Trust in Banks Continues to Challenge Bank Marketers

While not approaching the high levels experienced before the financial crisis, Americans are slowly starting to show trust in their financial institutions and believe they have their best interests in mind, according to Forrester Research, Inc. But the positive sentiment is not evenly distributed.

Perennial customer experience leaders like USAA and American Family Insurance continued to top the list and bounced back higher than banks and investment firms. Customer experience ratings for super-regional banks like PNC Bank, U.S. Bank, and BB&T also improved significantly from last year

Wednesday, February 3, 2010

Building Long-Term Deposits and Relationships Automatically

Over the past several years there have been a number of financial institutions that have built automatic savings programs where customers can set goals, establish recurring transfers between accounts to fund the goal(s), and track their savings progress.

One of the first programs developed was the Orange Savings Account from ING Direct which greatly simplified the process of opening new accounts for various savings goals. Following the success of the Orange Saving Account, SmartyPig was another program with that same goal in mind, making it easy for a customer to setup savings goals.

A customer can name their accounts, set the deadline for reaching their goals and even use an interactive calculator to determine the amount they will need to set aside each month. What makes Smartypig unique is that they added a social element to the mix . . . allowing other people such as friends and family members to contribute to the customer's goals as well.