Name Your Own Account

In an effort to give its customers a "fun and easy" way to save money, Americana Community Bank (Sleepy Eye, MN) announced the introduction of its Name Your Own Account this week. The account encourages customers to set a specific purchase goal - like a new TV, boat or vacation - and use the account to save specifically for that purchase.

After opening the account, the Bank also plans to send account holders email updates as their savings grow - and they get closer to having enough money to make their big purchase.

The account is the latest in efforts we've seen relative to institutions allowing customers to customize an account - or features of that account. And, while this will certainly allow ACB to engage its customers, I'd like to see how the value of the account will be communicated to both customers and non-customers.

I was disappointed in not being able to find any information about the account on the Bank's website - I read about the account in a press release, but found no additional information online. Nonetheless, I wonder what kind of long-term success the name your own account will have for ACB. Will customers begin saving again for something else (and re-name their account) after their initial purchase is made?

Unlike initiatives like ING's Your Number - where long-term retirement savings goals are the focus, Americana Community Bank's account focuses on relatively short-term goals. And while these short-term goals are certainly important for the customer, especially given the focus on saving the money before purchasing - rather than using credit, the account structure puts those deposits at risk once the savings goals are reached. What will the Bank's follow-up efforts look like with those customers to continue saving?

The account looks to be part of a series of changes at Americana Community Bank - as noted on the Bank's website, it looks like a new site, new products and new look are in the works.

What kind of financial guidance are you offering Gen Y?

Yesterday’s Marketing Daily featured the article “Gen Y is Going to Need Financial Guidance More Than Most.” Citing outstanding student loans, credit card debt and lack of savings, it’s easy to see why Generation Y may need some guidance to navigate these challenges.

So, what kind of financial guidance are you offering Gen Y?

The article makes a good point about life-stage goals – with Susan Menke, senior financial services analyst at Mintel giving the example that “Many Gen Y consumers have a picture of where they’d like to be financially by the time they’re 35. Often, that picture includes owning a house, having children and being free of student loan debt.” She goes on to say “They key is to build your model so that you’re targeting both short-term profit and log-term profit potential.”

Looking at Generation Y’s current life-stage (many are high school or college students, or recent graduates starting careers), and the challenges many are currently facing – like the student loans, credit card debt and lack of savings, as mentioned in the article – gives us some direction as to what kind of financial guidance Gen Y needs now, in the short-term. Gen Y needs a plan to pay off their debts; and many need a reason to start saving their money. This is where life-stage goals like buying a car or home, or saving for a vacation or retirement can become part of the financial guidance your institution offers.

And, depending on your market, offering financial guidance to Gen Y may also require that you think beyond the traditional in-branch meeting with a personal banker. As an example, how will your institution offer financial guidance to Gen Y through your website or other venues?

If you aren’t currently offering any overt financial guidance, education or planning tools for Generation Y, it may be time to start thinking about doing so. With Gen Y expected to become more lucrative in the coming years, the relationships established with them now – especially during important life-stage events, like buying a first home, should be looked at relative to both short-term and long-term opportunities.

The Impact of Mobile Banking on Your Brand

Jeff Stephens at Creative Brand Communications recently posted a question on Banktastic about the impact of mobile banking on branding for banks and credit unions. With projections of 100 million US consumers using mobile banking by 2012 (cited by Javelin Research in a Business Week article last month) it is no wonder that the industry is scrambling to take advantage of the latest technology. Today mobile banking is an emerging technology…tomorrow, can we say “me-too”?! What do you think? Will the offer of (or failure to offer) mobile banking impact your brand in the mind's of your customer?

Online Banking On Its Way Out?

In a conversation with a banker last week, I asked about his intentions to add online account opening capabilities for his customers. And, this sparked an interesting conversation about the limitations placed on his institution's online banking platform by its core processor (the company also hosts his online banking service).

You see, this banker had been considering adding this feature to his online banking for some time – and he really saw the value in making online account opening available to his customers. But he told us he couldn't add it because his core processing company had no plans to offer online account opening as part of its services to its bank customers. I understand that it takes time to develop these technologies, but it was the rationale behind this specific company’s choice not to offer online account opening capabilities to its bank clients that was pretty shocking.

They told the bank's management that online banking was on its way out. That’s right, they told them that the regulators would certainly kill online banking in the near future, and as a result, there was no reason to make the investment in developing the technology which would allow online account opening.

Online banking on its way out? Seriously? I don't think so.

Consumer behaviors are changing rapidly - especially relative to the Internet. And, today's successful institutions are those that embrace the changes and partner with outside companies who do so as well.

BarCampBank San Francisco

On Saturday, I had the opportunity to attend the BarCampBank San Francisco conference. I had never attended a BarCampBank conference, so I was excited – and didn’t know what to expect. I must say, I was not disappointed. The conversations and group discussions were very intriguing, and the relaxed atmosphere of the whole event had everyone participating without hesitation. It was a lot of fun to join such a diverse group of people to talk trends that are taking place right now in the financial service industry.

Now when I say the group was diverse, here is what I mean. The list of attendees ran the gamut from credit union CEO’s, to college students (a total of around 60 people overall). There were people representing startup ventures, corporate marketing departments, consulting firms, and there were also some programmers in attendance. This is why there is a buzz around these BarCamp events, I think. People contribute to discussions and bring a very wide range of background and perspectives with them. I learned as much in one day (if not more) at this conference than in attending an entire weekend at a traditional conference.

If you don’t know the scoop on BarCamps, here it is right from the source:”BarCamp is an ad-hoc gathering born from the desire for people to share and learn in an open environment. It is an intense event with discussions, demos and interaction from participants.”

The beauty is that anyone can organize a BarCamp, and as long as some interest is generated and there are people who want to attend. There are no rules and no pre-decided outline of content - the topics of discussion are decided upon by the attendees the day of the conference.

Anyway, enough about what they are. The BarCampBank San Francisco was very successful overall, and we should all definitely thank Matt Iverson for organizing the event (and all others that helped make it success). There is already talk about BarCampBankSF2 happening in another six months or so, and is generating discussion by attendees.

One of the biggest points made during the day was made during various discussions - if you are going to create a successful online service for customers in today’s Web 2.0 world, it must have three components: community, trust/transparency and stickiness. In today’s generation of internet users, these are the things they are looking for in any site or service they use online.

This is important for banks and credit unions because it translates into knowing what your customers are looking for in service offerings. An institution can’t just throw a website together for the sake of having a website; it must connect with, and be meaningful to the user. An example that came about during the conference centered on providing financial advice or financial planning tools online, and why there are so many that aren’t successful. The reasons included the fact that people don’t just want a tool to spit numbers at them, they want to feel connected and have a more meaningful overall experience. They want a community of users to interact with, they want real world advice about what the tool is telling them, and they want feedback from the community about whether that advice is good or not.

A lot of what was discussed at BarCampBank San Francisco dealt with technology and trends that are happening in the financial world right now. While not all of it was presented as having a direct relationship with banks and credit unions, it is certainly reshaping the industry in some way. If you want to learn more about all of the various topics discussed at this BarCampBankSF you can visit the wiki site and check out discussion notes from participants. Also, here are some photos from the event taken by participants and posted on the flickr.

If you haven’t had a chance to participate in a BarCampBank conference, think about doing it - it is a very engaging and rewarding experience.

Direct Marketing

According to a recent Direct Marketing Association report, American financial services institutions are increasing their use of direct marketing. The $13.4 billion that U.S. banks and credit institutions spent last year on direct marketing advertising generated $178.8 billion in sales. How's that for ROI? These sales are forecast to hit $286.2 billion in 2012, according to the report.

Have an idea for us?

After reading about the latest Starbucks training sessions where each of its stores were closed for a three hour training session a few weeks back, and hearing about some of the initiatives it will be launching to get back in touch with its customers, I've been looking for examples of these initiatives coming to life in my trips since to Starbucks stores.

The one idea I particularly like, called My Starbucks Idea (Netbanker has a great write-up of how this can tie into banking) is a website that allows customers to submit ideas and feedback about all things Starbucks. And while the initiative is web-based, I was interested to see an in-store display this morning on the table with the coffee creamers.

The display is a small (8.5X11) table top with a stack of tear-off, business-card sized pieces of paper attached to it. These pieces of paper simply read "Have an idea for us?" - and, I have to admit, it intrigued me. I tore it off, and turned it over, the back simply directs you to mystarbucksidea.com.

It's not a survey. There are no questions. It simply directs you to submit your ideas to the bank's microsite.

I can definitely see the opportunity for financial institutions to offer this kind of feedback loop to their customers - and could easily be placed at teller stations or on check-write tables. In Starbucks' case, because it's such a large company, having the comments directed to one central point is a great way to keep them organized.

It's such a simple way to keep the feedback loop open for customer dialogue.

Will This Year Be the Tipping Point for Mobile Banking?

I guess that depends on who you ask, and how you define “tipping point”.

I read a report today suggesting that 2008 May Be the Tipping Point for Mobile Banking. The article focuses on research conducted by the Tower Group and brings up some interesting points about mobile banking, those likely to use it, and the technology that supports it.

But I’m not convinced that mobile banking will “move into the mainstream” this year as the article suggests. And even if it does enter the mainstream spotlight and increase awareness, I doubt that will translate into mainstream adoption by both institutions and customers.

Sure, I agree with Virginia Garcia, Research Director at Tower Group when she says “the downloads are faster, and the devices are better”, referring to cell phone technology that supports mobile banking. But what about preparation on the bank side? I’d be willing to bet that, while some institutions are planning to introduce mobile banking this year (these being the national and regional players that don’t currently offer it), many more haven’t taken that first step.

The article also quotes Garcia as saying "It's not necessarily for the mainstream customer base, but its going to grow as a factor in retaining and attracting new customers.” And, “As these bigger banks move into the regional markets, the smaller banks will have to develop technological platforms, such as mobile banking, to maintain parity and keep their customers…the competition is on a level playing field, forcing the smaller institutions to respond.”

I agree that mobile banking isn’t for the mainstream customer base. And, I also agree that smaller banks will need to take steps to stay competitive in terms of technology. But, I have a hard time thinking that mobile banking will play a significant factor in today’s institutions’ customer retention and acquisition strategies – or that banks and credit unions need to be worried about adding mobile banking to “keep their customers.”

And, even if the regional and national competition is on a level playing field offering mobile banking, the response by smaller institutions shouldn’t automatically be the addition of mobile banking just because the guy up the street is offering it.

Will mobile banking be offered by more institutions and used by more customers by the end of the year? Without a doubt.

Will 2008 be the tipping point for mobile banking? What do you think?